Soyuzkali will be registered in Switzerland

The decision to change the name and jurisdiction of the BPC made at senior management level in Belarus and Russia.

Soyuzkali, a new trading arm of the Belarusian and Russian potash giants, Belaruskali and Uralkali, may start operation in February 2013, First Deputy Prime Minister Uladzimir Syamashka told reporters in Minsk on Friday.

“A specific action plan is now being developed, which envisages that the company will begin operation in February next year,” he said.

According to Mr. Syamashka, Soyuzkali will be registered in Switzerland. This will allow the company to enjoy favorable tax treatment and have access to cheap loans, which is needed for the development of both Belaruskali and Uralkali and their trading arm, he said.

“It’s one thing to borrow at a rate of 10 to 12 percent and another to do it at two or three percent,” he said. “This is possible with registration in Switzerland.”

According to him, last year Uralkali’s Swiss-registered Uralkalitrading received a $1-billion loan from an Italian bank, which carried an interest rate of 2.05 percent. “Fifty million dollars will be saved this year alone,” he noted.

As Mr. Syamashka said, Belarusian Potash Company (BPC), the current trading arm of Belaruskali and Uralkali, will continue to exist for “some time” and retain certain functions.

The establishment of Soyuzkali will be a new step in the organization of the company’s marketing and international trading, Uralkali Marketing and Sales Director Oleg Petrov said on June 14. “We will be able to improve management and make it more efficient,” he added.

Belarusian Deputy Foreign Minister Alyaksandr Huryanaw said on the same day that Soyuzkali would be owned on a parity basis by Belaruskali and Uralkali, and that Belarusian Railroads, which holds a 5-percent stake in BPC, was not expected to be a stockholder of the new company.

Transferring the jurisdiction of the trading arm of Belaruskali and Uralkali to Switzerland is expected to allow Belarus to protect itself from possible economic sanctions on the part of the European Union and the United States with regard to potash exports.

Uralkali and Belaruskali are said to together account for almost 42 percent of global potash exports.