Solidarumas, a Lithuanian trade union, has suggested nationalizing a Kedainiai-based phosphate fertilizer manufacturer Lifosa the indirect owner of which is subject to EU sanctions.
Kristina Krupaviciene, the union’s chairwoman, has presented the proposal to the Prime Minister Ingrida Simonyte, saying that the move would help save jobs, government and municipal revenues. Some of the company’s profits could be used to support Ukraine, she added.
“Nationalization would allow the company, which can operate without supplies from Russia and Belarus, to continue to produce phosphate fertilizers, an important product for agriculture, which will be in short supply around the world this year, and would help preserve jobs and state and municipal budget revenue,” the union said in a statement on March 15.
The union is also asking the authorities to allow using Lifosa’s currently frozen bank accounts to pay employees and suppliers so that the company can continue to operate.
Prime Minister Simonyte commented later on March 15 that she doubted whether Lifsa would be able to continue its operations.
“As far as I know, there are not only issues related to the shareholder, who is on the list of sanctioned individuals, but also to raw materials. It is wrong to believe that if the state nationalizes a company, it will somehow have other conditions to operate, especially if the source of its raw materials is in the Russian Federation,” she told reporters. “It is an interesting proposal, but I will certainly not comment on it any further.”
In 2020, Lifosa bought raw materials from the Russian phosphate mining company Kovdorskiy GOK, NAK Azot, a producer of ammonium, nitrogen and mineral fertilizers, chemical product producer Novomoskovskiy Khlor, as well as Switzerland’s EuroChem Trading, another company linked to Lifosa’s shareholder. The total value of procurements from the Russian companies exceeded 45 million euros, and Lifosa paid 6.9 million euros to the Swiss company.
Lifosa’s accounts were frozen last week after Russian oligarch Andrey Melnichenko, its indirect owner, was placed on the EU sanction list.
Lifosa said on March 14 it was unable to it meet its obligations and had turned to state authorities for help.
Rimantas Proscevicius, the company’s CEO, said state support was “vital” for continuing the plant’s operations.
The company in Kedainiai, central Lithuania, employs more than 1,000 people.
Two Lifosa trade unions on March 14 appealed to several ministries and parliamentary committees for help.
The Lithuanian company is 100% owned by the Swiss-registered Eurochem Group, in which AIM Capital, a Cyprus-registered firm of Melnichenko, holds a 90% stake.
EuroChem Group said on March 10 that Melnichenko had resigned from its board of directors as of March 9, and that he was no longer the group’s main beneficiary. (LRT/Business World Magazine)
