Gas Chief Unveils Plan To Upgrade Titanium Plant

KIEV, Ukraine -- Dmytro Firtash, the Ukrainian tycoon who last month revealed his ownership of RosUkrEnergo, the natural gas trader, has taken a further step out of the shadows by revealing his other holdings, including a titanium plant in Ukraine.

Crimean Titanium

Robert Shetler Jones, Mr Firtash’s British partner, told the Financial Times in an interview that he was working on a plan to consolidate Mr Firtash’s holdings in the chemicals sector, which include Crimean Titan, Crimean Soda and the Rivneazot, Nitrofert and Tajikazot fertiliser plants in Ukraine, Estonia and Tajikistan, respectively.

Both Crimean plants are currently owned by RSJ Erste, a German company in which Mr Shetler Jones is the sole shareholder. But he said RSJ was an “interim structure” and after the consolidation Mr Firtash would emerge as main owner.

Mr Shetler Jones said the consolidation of Mr Firtash’s chemicals companies was aimed primarily at attracting financing for an upgrade of Crimean Titan to enable it to produce a broader range of titanium and titanium alloy products for the aviation, space and defence industries. He said it would take up to five years at a cost of $500m-$800m (€392m-€628m) to upgrade the plant, which produces titanium dioxide for paint production.

“One of the options we look at very strongly is the introduction of strategic partners from the west,” Mr Shetler Jones said.

By revealing his ownership of the plants and his ambitions for Crimean Titan, Mr Firtash is raising the stakes in his effort to gain acceptance both in the west and in Ukraine.

Whether his efforts succeed will depend partly on the outcome of negotiations in Ukraine on a new government. The leading candidate to take over as prime minister, former prime minister Yulia Tymoshenko, has been an outspoken critic of RosUkrEnergo and has vowed to cancel a deal with Russia in January that made RosUkrEnergo Ukraine’s sole supplier of imported gas.

Mr Firtash’s plans for Crimean Titan come as Russia’s government is moving to rein in VSMPO-Avisma, a Russian titanium producer. Russia’s powerful state arms-export company, Rosoboronexport, wants to secure supplies of titanium for Russia’s defence industry and has pressed the plant’s owners to cede control.

“What we would like to do is create additional product to fill the supply gap but one that is also not Russian-based,” Mr Shetler Jones said.

Mr Shetler Jones said Mr Firtash also owned other companies in the gas industry including Russia’s Zangas, a pipelines builder, and an Austrian sister company also called Zangas, which recently built a stretch of pipeline for Turkmenistan in exchange for gas.

Separately, officials in Russia’s southern Astrakhan region announced last week that Mr Firtash had taken control of an undeveloped gas field by acquiring control of the Astrakhan Oil and Gas Company.

Source: Financial Times