U.S. company becomes new distributor

  • 1999-08-05
VILNIUS (BNS) - The U.S. fertilizer producer Cargill became a shareholder and the official distributor of the Lithuanian phosphate fertilizer producer Lifosa, after the two companies signed an agreement July 28.

According to the agreement, Cargill will hold 15 percent of Lifosa's shares and will distribute the Lithu-anian company's products for eight years.

The U.S. company made its first investment in the Baltics buying Lifosa's shares for 57.2 million litas ($14.3 million).

Henricus M. Mathot, director of Cargill's global fertilizer operations, said the company will oversee the production quality and distribution of the Lithuanian company's products but will not interfere in its management.

He said fertilizers will be exported to Latin America and Europe via Klaipeda's port.

Lifosa is capable of producing 280,000 tons of phosphoric acid and 600,000 tons of ammonium phosphate per year. The production of ammonium phosphate is to be enlarged to 800,000 tons by the year 2001.

The new shareholder is not planning to enlarge its stake so far. Lifosa's director controls about 40 percent of the company's shares, Lifosa itself owns about 10 percent, other shareholders hold 18 percent and the remaining shares are held by the Italian company Indutech SPA.

Since 1996, Cargill has sold about 50 percent of Lifosa's phosphate production.

Lifosa's turnover in the first half of this year was 231.1 million litas, 34.3 percent more than during the same period last year. Over the six months the company earned a 23.76 million litas net profit. Lifosa plans on a turnover of 500 million litas this year.