Privatization of the Odesa Port-Side Plant
Dmytro Natalukha, head of Ukraine’s State Property Fund (SPFU), has disclosed details about previous attempts to sell the Odesa Port-Side Plant (OPZ). He noted that one prospective buyer—a major agricultural firm—viewed OPZ not primarily as a producer of ammonia and urea, but rather as a logistics asset. The company planned to turn the facility into a platform for transshipping agricultural goods, rather than for chemical manufacturing.
'One of the bidders was a large, highly capable, and resource-rich agricultural company. It saw this asset less as an ammonia and urea production site and more as a potential hub for agricultural transshipment,' Dmytro Natalukha said.
According to him, the agricultural firm openly considered demolishing part of the existing structures to build conveyor sleeves, cranes, and storage facilities, effectively converting OPZ into a private port for loading agricultural products onto ships.
The State Property Fund opposes selling assets without first assessing their future use. Currently, the SPFU is compiling a list of roughly ten strategic assets for large-scale privatization, with starting prices ranging from 10 to 13 billion hryvnias.
Fertilizer Market Situation
Natalukha also highlighted that the global fertilizer market has shifted due to escalating tensions around Iran. '30% of the world’s ammonia supply used to pass through the Strait of Hormuz from Persian Gulf countries. As a result, ammonia prices have skyrocketed, and everyone is now looking at OPZ in a completely different light,' he stated.
Natalukha explained why privatizing Centrenergo is currently not feasible, though he did not provide further details on that matter. Meanwhile, arguments for keeping OPZ’s production operational include:
- creating new jobs;
- developing related industries;
- increasing tax revenues.
A key consideration is the plant’s reconfiguration, which could involve expanding port infrastructure and building conveyor sleeves, cranes, and warehouses to enable efficient cargo transshipment.
The privatization of OPZ could have a significant impact on Ukraine’s agricultural sector, as using the plant as a logistics hub might boost the efficiency of agricultural product transshipment. However, given the surge in global ammonia prices, it is crucial to strike a balance between potential privatization profits and the need to develop domestic fertilizer production. The plant’s importance to the national economy and planned modernization investments could be decisive factors in the future of this asset.
As the State Property Fund prepares for this significant sale, it is also eyeing the privatization of other key assets. For instance, the upcoming auction of several major factories could reshape Ukraine's industrial landscape. To learn more about the strategic assets slated for privatization by the end of the year, including their potential impact on the market, visit the latest updates on major factory privatizations.