Agribusiness giant steps out of Lithuania

  • 2004-09-29
  • From wire reports
VILNIUS - U.S. agribusiness giant Cargill has announced that it would withdraw from Lithuania after the termination of its worldwide distribution agreement for Lifosa-produced phosphate fertilizers, the business daily Verslo Zinios.

Lifosa's products will now be distributed through a worldwide sales network of majority shareholder Eolian Trading. The firm, controlled by Russia's mineral fertilizer group Eurochem, holds a 91.2 percent stake in the phosphate fertilizer plant located in Kedainiai, in central Lithuania.

According to the paper, Cargill Crop Nutrition had a worldwide distribution agreement for Lifosa's phosphate products until late 2008. Eolian Trading, however, decided to terminate this agreement on Jul. 1 of this year.

Since fertilizer distribution was Cargill's only Lithuanian business, the American-based group is pulling out of the country. Cargill obtained the six-year worldwide distribution agreement in 2002 after it sold its 30 percent stake in Lifosa to Eolian Trading, which has since increased its stake to 91.2 percent.

Lifosa's executives declined to comment about possible sales effects that the change would have on the company's performance results. Market participants, however, said that this should both help Lifosa cut distribution costs and increase competitiveness.