RUSSIA- Russia’s only feed methionine producer, Volzhsky Orgsintez, faces potential operational disruption following the government’s seizure of the asset.
Methionine is an important supplement in feed production, especially poultry feed, not only serves as a constituent of body protein but also is involved in the development of the digestive tract and growth performance.
Alexander Sobolevsky, the former owner of the plant, has issued a lawsuit to the Volgograd regional court in an attempt to reverse this decision, warning of the potential fallout and ramifications.
The takeover occurred in August 2023 when the Russian government agency, Rosimushestvo, assumed operational control over Volzhsky Orgsintez after a regional court declared the asset’s privatization in the 1990s as illegal.
A significant concern raised by Sobolevsky is the potential imposition of Western sanctions on Volzhsky Orgsintez due to its historical production of aniline, a raw material essential in the chemical industry for various applications, including explosives.
Sobolevsky highlighted the Russian Prosecution Office’s explicit intent to utilize the facility’s capacities to bolster the production of military products, a move that could invite sanctions. Although Volzhsky Orgsintez halted aniline production in 2020 due to poor profitability, the threat of sanctions looms large over its operations.
Volzhsky Orgsintez, with a production capacity of 25,000 tonnes of feed methionine per year, historically catered to a significant portion of the domestic market’s demand.
In the lawsuit, Sobolevsky demands interim measures concerning the company’s shares, underscoring the grave consequences that any unwarranted transfer of ownership to the Russian Federation might incur. He stressed that these repercussions would be challenging to rectify even after returning shares to his ownership.
One of the concerns raised by Sobolevsky is the potential detrimental impact of Western sanctions on the plant. Numerous foreign companies are suppliers and buyers of raw materials from Volzhsky Orgsintez, and sanctions could severely disrupt trade ties.
However, regional officials argue that the government takeover should not adversely affect Volzhsky Orgsintez. They believe the enterprise is highly efficient and its products are in demand, indicating that the court case is unlikely to impact production volume or its future operations.
The situation surrounding Volzhsky Orgsintez remains a matter of critical interest, as it raises questions about government intervention in private industry and the potential global implications of such actions.
