Uralkali, BPC chiefs meet but no reconciliation on the cards yet

04 February 2014 13:57 Source:ICIS News

LONDON (ICIS) - The chiefs of Russia-based potash producer Uralkali and Belarus’ Belarusian Potash Company (BPC) met last week in Moscow, but there was no discussion about reconciliation between the former partners, a spokesperson at BPC confirmed today.

The meeting is understood to have been held between Uralkali CEO Dmitry Osipov and BPC CEO Elena Kudryavets on 31 January.

The move is widely being viewed by the market as the first step towards renewal of ties between the former partners. However both sides only discussed pending administrative issues, according to sources at Uralkali and BPC.

"Current issues of cooperation not related to the market" were discussed at the meeting, Irina Savchenko, spokesperson at BPC said.

The meeting comes over six months after Urakali announced on 30 July 2013 it was exiting BPC, alleging joint venture partner Belaruskali was selling potash cargoes outside their trading agreement.

BPC was established in April 2005 as a sales company for Belaruskali and Uralkali, with each shareholder controlling 50% of the company’s share capital.

Since the change in Uralkali's management, there has been speculation that the former partners may renew their partnership. Over the last few months, Russian fertilizer producer Uralchem has bought a 20% share in Uralkali, while Michail Prochorov's Onexim Group is acquiring a 21.75% share from billionaire Suleiman Kerimov.

Following the change in shareholding, Dmitry Osipov was appointed Uralkali CEO, effective from 24 December 2013.

Osipov replaced Vladislav Baumgertner, who was jailed for a month and kept under house arrest for two months in Minsk by authorities in Belarus following Uralkali’s decision to exit BPC. Baumgertner was extradited to Moscow on 21 November but remains under house arrest, a condition of his extradition, on charges of abuse of power.

However, any reconciliation between Uralkali and Belaruskali is expected to be a protracted process given that both sides have many differences to iron out, including the share of sales volumes between the two companies and where the trading company would be based.

By Deepika Thapliyal