Healthy business relationships and partnerships are critical not only for the success of individual businesses but also for a viable global economy. Louisiana residents who are involved in agribusiness may have heard about the recent collapse of the business partnership between the Republic of Belarus and potash producer Uralkali. The Russian fertilizer maker Eurochem maintains that the Belarus-Uralkali dispute, and the resulting drop in potash prices, has not affected it potash business and its planned potash mines were still a viable option.
This is good news for Louisiana business, because EuroChem recently announced that it plans on building an ammonia and urea plant in Louisiana. The construction of the plant is expected to cost approximately 1.5 billion dollars, and the company is looking to partner with other U.S. companies on this project.
Eurochem plans to enter into the potash market with an expected output of 8 million metric tons a year within a decade. That amounts to about 60 percent of the current capacity at Uralkali, which is currently the world’s biggest potash manufacturer.
The business dispute between Uralkali and Belarus stems from Uralkali’s abrupt termination of a marketing venture at the end of July. The marketing venture was a substantial one, accounting for about 40 percent of global potash exports. UralKali accused Belarus of making sales outside the agreement. Uralkali responded by increasing production to grab market share, causing prices to drop in the $20 billion global potash market. The effects of the collapse were felt as far as China.
Clearly, business partnerships and relationships can get complex, and can take unexpected turns. In any complex business transaction, companies should ensure that their interests are protected and that they get a fair deal out of their business partnerships. Hence, it is essential for any company regardless of its size, to seek the legal advice from a business law firm familiar with the nuances and complexities of global transactions. And when business agreements break down, it is essential to have an experienced business litigation firm at one’s side.
Source: Bloomberg, “EuroChem Positive on Potash Amid Uralkali-Belarus Dispute,” Ilya Khrennikov, October 23, 2013