The Government of Tajikistan has ordered to approve and sign an investment agreement with Osiyo Chemical Company on rehabilitating, modernizing and introducing Open Joint-Stock Company (OJSC) Azot (formerly TojikAzot – fertilizer plant) into operation.
The estimated budget for implementation of this project, designed for five years is not less than 200 million somonis (equivalent to 17.7 million U.S. dollars).
During the implementation of the project, the investor is exempt from paying corporate income tax.
Besides, the investor is exempt from paying customs duties when importing 361 items of goods and materials into the country.
Preparatory work to introduce OJSC Azot into operation is under personal control of the President and the Prime Minister, Qurbon Hakimozda, the Governor of Khatlon Province noted on January 29 while addressing a meeting of regional administrators in Bokhtar.
According to him, the plant, which is located in the southern city of Levakant (Khatlon province), is expected to introduce into operation this year.
We have been unable to obtain information about the founders of Osiyo Chemical Company, which is the new owner of OJSC Azot, from the relevant government agencies for a year now.
According to some sources, it may be an affiliate of one of the country’s largest companies – among them are called Faroz and Avesta Group.
In the meantime, this company will receive unlimited benefits, Radio Liberty’s Tajik Service, known locally as Radio Ozodi, says.
The debt-ridden and loss-making fertilizer plant has 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 has argued that Zayd Saidov was involved in the fraudulent privatization of Guliston and TojikAzot.
On December 14, 2016, the Majlisi Namoyandagon (Tajikistan’s lower house of parliament) voted for ratification of an investment agreement signed between the Government of Tajikistan and China’s Henan Zhongya Holding Group on September 3, 2016.
Under this agreement, the Chinese company owned 50%+1 shares of the enterprise for the first ten years and then it was supposed to transfer this package of shares to Tajikistan.
Henan Zhongya Holding Group had been committed to invest US$360 million in modernization of coal-powered technological equipment and construction of new shops for production of urea and ammonia in Tajikistan within the next three years. However, the construction works have not been begun.
In August 2019, Tajikistan formally revoked a contract with Henan Zhongya Holding Group, accusing it of failing to fulfill the contract and a full package of shares of OJSC Azot was put out to an investment tender.
The State Committee on Investment and State-owned Property Management (GosKomInvest) said in June 2019 that 350 million U.S. dollars are needed for modernization of this plant. The modernization of the enterprise is expected to increase its annual capacity to 1.6 million tons and the enterprise will be able to export up to 1.3 million tons of mineral fertilizers to the neighboring countries per year.
Tajikistan’s current requirements in mineral fertilizers are reportedly 180,000 tons.
