May 22 (Bloomberg) -- Potash maker Belaruskali said it seeks to take back its share of the $20 billion market amid record sales volumes for the soil nutrient as it recovers from its split with Russian partner OAO Uralkali.
“We do not want to take market from anybody,” Chief Executive Officer Valery Kirienko said today in a press conference. “We just want to take back what has always been ours.”
Uralkali, the world’s biggest potash producer, broke up the trading alliance in July amid accusations its Belarusian partner had sold cargoes outside their agreement. The split weakened potash prices and sent shares in producers tumbling. A change of ownership at Berezniki, Russia-based Uralkali after billionaire Suleiman Kerimov and his partners sold out in December has prompted speculation of a reconciliation.
“If conditions are profitable for us and for them, why not work together,” Kirienko said. “Currently, such conditions are not in place, but tomorrow the situation may change.”
Belaruskali shipped a record 977,000 metric tons of potash in March and expects similar volumes until at least June, he said at the company’s headquarters in Soligorsk, a mining town 140 kilometers (90 miles) south of Minsk. The company is selling potash at prices higher than rivals in Canada and 2 percent higher than Uralkali, Kirienko said.
The company “renewed” a contract with India to ship 500,000 tons of potash this year, and continued talks with potential clients in China, he said.
While the company’s total exports rose 39.7 percent in the first quarter compared with the same period last year, its export revenue declined 0.7 percent to $603.5 million on lower potash prices. Kirienko sees sales volumes slowing in the second half of this year.
Average potash prices should gradually rise to $350 to $400 a ton, he said.
Belaruskali, which spent as much as $400 million in previous years, shrank its investment program to $250 million this year because of a lack of clarity in the market, he said.
The company has renewed work on its potash plant at the new Petrikov deposit, which contains 1.8 billion tons of raw potash salt, with extraction due to begin in 2019. The company estimates that its total current commercial reserves exceed 3 billion tons, plus off-balance-sheet reserves of about 1 billion tons.
To contact the reporter on this story: Aliaksandr Kudrytski in Minsk, Belarus at firstname.lastname@example.org
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