4 Min Read
* Uralkali's Q3 revenue down 19 pct, sees demand growth
* Says too early to comment on alliance with Belarus
* Says to cancel treasury shares in 2014
* Uralchem to close a deal with Uralkali stake this week
By Polina Devitt
MOSCOW, Dec 19 (Reuters) - Russia's Uralkali, the world's biggest potash producer, would consider new trading joint ventures to replace a partnership it broke off with Belarus, and does not rule out a revival of the venture with Minsk, it said on Thursday.
The comments come after months of speculation that the alliance with Belarus Potash Co. (BPC), which controlled 40 percent of the $20 billion global potash market, might be revived.
Uralkali's key shareholders including billionaire Suleiman Kerimov recently agreed to sell their stakes in Kremlin-blessed deals, seen as paving the way to the creation of a new venture.
"Uralkali is potentially open to consider all the possible potential partnerships which would be beneficial for our shareholders," chief financial officer Viktor Belyakov said.
"As to BPC and Russia in particular, it is too early to comment on any potential partnership and its form," he said.
Uralkali also said it was increasing output and saw signs of demand improving next year thanks to demand from emerging markets and low-income farmers.
Global prices for potash, a crop nutrient, have declined since 2012 due to oversupply. Uralkali triggered a further decline when it quit the sales alliance with Belarus in July, seeking instead to maximise sales volumes.
Since Uralkali left the alliance, falling potash prices have hit Belarus's export earnings and infuriated the former Soviet nation's president, Alexander Lukashenko. Lukashenko has called for a restoration of the venture, but experts say industry overcapacity may make this hard to achieve.
Uralkali plans to boost 2014 potash production by 20 percent, year-on-year, to not less than 12 million tonnes, Belyakov said.
The company also sees 2014 global potash demand growth at around 10 percent thanks to revived demand from price-sensitive farmers, it said.
"As potash became more affordable for lower-income farmers, and inventories are depleting, we see that demand is gradually recovering," Uralkali sales chief Oleg Petrov said.
Uralkali sees global potash demand rising to between 58 million and 60 million tonnes in 2014 thanks to growing consumption in China, India, Brazil and Southeast Asia, up from 53-54 million tonnes in 2013.
Its average third-quarter export price decreased by 27 percent, year-on-year, to $272 per tonne on a free-carrier (FCA) basis, which excludes delivery costs. Revenue fell 19 percent to $856 million, supported by increased sales volumes.
In November the main shareholder in Uralkali, Kerimov, agreed to sell a 21.75 percent stake to Russian tycoon-turned-politician Mikhail Prokhorov, while Belarus-born businessman Dmitry Mazepin's fertiliser firm Uralchem agreed to buy a further 20 percent.
Uralchem plans to close the deal by the end of this week, its spokesman Alan Basiev said on Thursday.
Uralkali holds around 12 percent of its shares in treasury, which are expected to be cancelled in 2014, according to Belyakov, increasing stakes of remaining shareholders.
Uralkali shares were up 1 percent in Moscow on Thursday, outperforming broader market.