“China’s Henan Zhongya Holding Group has postponed organization of production of urea at Open Joint-Stock Company (OJSC) Nurihoi Osiyo (Fertilizers of Asia) in Levakand (formerly Sarband), yet again,” Khatlon governor Davlatsho Gulmahmadzoda told reporters in Bokhtar (formerly Qurghon Teppa) on July 18.
“The Chinese company should have organized production of urea by spring this year but they have failed. They then promised to re-launch the enterprise in August. However, judging by what we see reintroduction of the fertilizer plant into operation will be postponed again,” the governor said.
According to him, the Khatlon government does not have the power to influence the investors.
“Prime Minister Qohir Rasoulzoda has ordered the State Committee on Investments and State-owned Property Management to revoke the contract with Henan Zhongya Holding Group if the plant is not relaunched in August and conclude a contract with another investor,” the governor said.
Recall, Open Joint-Stock Company (OJSC) Nurihoi Osiyo (Fertilizers of Asia) with an authorized capital of 720 million USD was established on the basis of TojikAzot in November 2016.
China’s Henan Zhongya Holding Group owns 50%+1 shares of the enterprise for the first ten years and then transfers this package of shares to Tajikistan.
Tajikistan’s current annual requirements in urea are 360,000 tons and Tajikistan is reportedly forced to pay 50 million USD every year to meet its requirements in urea.
The enterprise produces urea, ammonia, carbon dioxide, oxygen and liquid nitrogen.
The plant reportedly also has service shop for power supply and repairing mechanical, electrical and measuring equipment.
The debt-ridden and loss-making fertilizer plant, TojikAzot, had not been in operation since 2008 due to lack of natural gas supplies.
Until 2008, when neighboring Uzbekistan upped the price of natural gas, a key input for the factory, TojikAzot served as a foreign investment-success story for Tajikistan’s economy.
TojikAzot was partly state owned, with the government controlling a 20 percent stake in the troubled enterprise. Ostark Ventures Limited (Ukrainian oligarch Dmitry Firtash is beneficial owner of Ostark Ventures Limited) assumed the 75% ownership interest in the enterprise and Khairullo Saidov, the son of ex-Minister of Industry Zayd Saidov, owned 5 percent of shares in TojikAzot.
On June 24, 2014, the Khatlon Economic Court invalidated the transaction for the sale of TojikAzot.
Tajikistan’s Agency for State Financial Control and Combating Corruption in March 2014 announced an investigation into a 2002 deal between Dmitry Firtash and the Tajik government to create TojikAzot, a plant specializing in the production of urea, an organic compound used in fertilizer. The anticorruption agency accused Firtash of illegal privatization of the company in 2002 and misappropriation of funds.
Firtash was arrested in Vienna on March 12, 2014, and released on a 125 million Euro bail two days later.
Following Firtash’s arrest, Tajikistan’s anticorruption agency charged him on March 15 with the illegal privatization of the clothing factory Guliston in 2002.
The anticorruption agency argued that Zayd Saidov had been involved in the fraudulent privatization of Guliston and TojikAzot.
