In December 2002 IBE Kereskedelmi es Szolgaltato Kft. ("IBE Kft.") commenced operations in Budapest, Hungary. IBE Kft. is a fully owned subsidiary of IBE Trade Corp. IBE Kft. compliments the trading operations in New York and Chicago and functions to optimize sourcing, marketing and distribution channels for all fertilizer products. PricewaterhouseCoopers will audit IBE Kft. For all IBE Kft. marketing and trading related questions please contact Imre Gercsak at tel. + 36 1 299 20 90, fax. + 36 1 299 20 99 or e-mail: office@alfa2000.hu, gimre@alfa2000.hu

In 2002 IBE TRADE COPR. annual sales exceeded 3.9 Million Metric Tons, including 1.3 million metric tons of Anhydrous Ammonia, 544,000 Metric Tons of Bulk Prilled Urea, 725,000 Metric Tons of NPK fertilizers, 19,000 Metric Tons of UAN Solution (Urea Ammonium Nitrate), 317,000 Metric Tons of Ammonium Nitrate and the balance of tonnage consists of other various products, such as Potash and Low Density Ammonium Nitrate.
In 2003 IBE projects sales in excess of 4.0 Million Metric Tons.

For the six months ending June 30 2003 IBE Kft. total sales were 67 million US dollars.

In 2003, combined annual sales for IBE Trade Corp. and IBE Kft. exceeded 3.5 million metric tons ("MT"), including 1.67 million MT of anhydrous ammonia; 425,395 MT of Ammonium Nitrate; 720,383 MT of NPK; 141,164 MT of UAN; 516,129 MT of Urea in bulk and the balance of tonnage consists of other various products such as Ammonium Sulphate, Potash, CAN, industrial AN etc.

The Tender commission responsible for investor selection declared Worldwide Chemical LLC, a limited liability company controlled by IBE TRADE CORP, as the winner of the bid for participation in the formation of the CJSC "Severodonetskoye Obyedineniye Azot" on the basis of Severodonetsk State-owned Enterprise "Obyedineniye Azot".
In November 2004 the State Property Fund and Worldwide Chemical LLC obtained a permission of the Ukrainian Antimonopoly Committee to establish CJSC "Severodonetskoye Obyedineniye Azot" on the basis of Severodonetsk State-owned Enterprise "Obyedineniye Azot".
On December 24, 2004 the closed joint stock company "Severodonetskoye Obyedineniye Azot" was registered.
The amount of charter capital of CJSC "Severodonetskoye Obyedineniye Azot" is 200 ml USD. Worldwide Chemical LLC holds a 60% interest in the newly born company, and the other 40% is held by the State Property Fund.
The State Property Fund has already contributed the aggregate production assets of Severodonetsk State-owned Enterprise "Obyedineniye Azot" to the charter capital of CJSC "Severodonetskoye Obyedineniye Azot". Worldwide Chemical LLC has contributed 60 ml USD, and another 60 ml. USD will be contributed within one year.

This report you can find here (373 Kb).

In 2004, combined sales for IBE Trade Corp. and IBE Kft. exceeded 3 million metric tons ("MT"), including 1.5 million MT of anhydrous ammonia; 269,195 MT of Ammonium Nitrate; 631,995 MT of NPK; 48,500 MT of UAN; 579,070 MT of Urea; 3,978 MT of Adipic Acid and 41 MT of Low Dicarboxylic Acid.

The Best Employer of 2004 contest among the biggest Lugansk Region companies was won by Severodoneckoye Obyedinenye Azot Closed Joint-Stock Company owned by WORLDWIDE CHEMICAL LLC, subsidiary of IBE Trade Corp., USA. The results of the contest were summed up among three nominations in six groups depending on the number of people employed by a company.

(Based on information of the East Ukranian Information Agency)

The results of Golden Buttress federal contest held by RAO UES of Russia with the support of the Ministry of Industry and Power Engineering have been summed up. Minudobrenya Open Joint-Stock Company, Rossosh, the majority stockholder of which is IBE Trade Corp.. USA, was named the best enterprise in the Voronezh Region for careful energy consumption characterized by clear-cut planning and dispatcher operations. Impeccable adherence to the energy consumption schedules and modes, steady and regular resource payment have stipulated the economic progress of the enterprise and strict fulfillment of all obligations to the energy providers.

(Own inf.)

In 2005 Yara International ASA (Norway) is planning to invest 1 billion Nrwg Krone ($160 mln) in three mineral fertilizer producers, including Minudobrenya Open Joint-Stock Company, Rossosh, Voronezh Region, whose majority stockholder is IBE Trade Corp., USA. The information is reported by Yara. The investment will substantially exceed the amount put up by the company last year. Yara envisages to divide the $160 mln investment among the Rossosh Minudobrenya, Chilean SQM (Sociedad Quimica y Minera de Chile S.A.) and Burrup Fertilisers Pty Ltd (BFPL, Australia)

(Based on "AK&M")

It is a widely known fact that the development of agriculture is greatly affected by the land fertility. To create a solid basis for growing high crops the whole world applies mineral fertilizers. When in the late 1980s in Rossosh, the Voronezh Region, a chemical giant was built, this has solved the problem of supplying the Central Black Earth Zone with fertilizers. Today in our editor’s office we welcome V.N. Ovcharenko, General Director, Minudobrenya Open Joint-Stock Company, Rossosh, the majority stockholder of which is IBE Trade Corp.. USA.

The full text of the interview can be found here

President Victor Yushchenko, acting at the International investment forum in Kiev on June, 16th, has promised to foreign investors to make active privatization.

The president of Ukraine Victor Yushchenko has emphasized serious steps of Ukraine on deep reforming tax and budgetary system, education and communal services, the administrative device and defense. The press-service of the Ukrainian president informs. According to the head of the state, Ukraine is ready to offer the international and domestic business “partnership in carrying out of reforms and formation of modern competitive economy ".

Victor Yushchenko turned down an opportunity of carrying out reprivatization in Ukraine. On the contrary, as he said, " privatization will be continued and made active ". With the purpose of improvement of the general investment climate the authority will soon offer the list of the enterprises which will be opened for investors. Among these enterprises the Head of the state has named "Ukrtelecom", Odessa Port Plant, Kharkov "Turboatom", Nikolaev PO "Zarya", Severodonetsky "Azot" and "Luganskteplovoz".

The company "IBE Trade Corp. ", the shareholder of Severodonetskiy "Azot" on behalf of the affiliated firm " WORLDWIDE CHEMICAL LLC ", welcomes the application of the president of Ukraine Victor Yushchenko that there will be no reprivatization. The company is ready to dialogue with authority. Also it is still measured to invest in the Ukrainian economy.

(Press-service of "IBE Trade Corp.")

The first vice-prime minister of Ukraine Anatoly Kinakh predicts the conclusion of the agreement of lawsuit with the investor of “Azot” Severodonetsk. This was an opinion that he expressed to journalists on June, 25th.

" The good variant of the agreement of lawsuit is planned, - he told.

As the correspondent of UNIAN tells, as Kinakh said, the investor of “Azot” Severodonetsk, most likely, will agree, that the control share holding of the enterprise would be in a state ownership. "The investor voluntary agrees, that the state will have a control share holding ", - A. Kinakh has noted, having added, that now there is a search of possible variants of the agreement of lawsuit.

As UNIAN informed, on May, 12th,2005 the Cabinet has charged to the State Office of Public Prosecutor and the Ministry of Justice to check up legality of creation of closed Joint-Stock Company “Severodonetskoe Obyedinenye “Azot".

Let's remind, that on December, 24th, 2004 FGIU (State Property Fund of Ukraine) and the company Worldwide Chemical LLC (USA) have created Closed Joint-Stock Company "Severodonetskoe Obyedinenye "Azot" with the authorised capital 1 billion 056,7 million hryvnias on the basis of state enterprise "Obyedinenye Azot". The share of State Property Fund in Closed Joint-Stock Company was 40 %, share of Worldwide Chemical LLC which is supervised by the businessman of the Ukrainian origin Alex (Alexander) Rovt, - 60 %.

The information from UNIAN. 16,4 % of total amount of ammonia production in Ukraine and 13 % from the general production of nitrogen fertilizers is hold by on Severodonetsky "Azot" (Lugansk region).

"Azot" Severodonetsk - the chemical enterprise, the largest in Europe in production of nitrogen fertilizers, methanol, an acetic acid, vinyl acetate and its derivatives, acetylene, formalin, catalysts, the goods of household chemical goods and other chemical production.

(Based on materials of agency UNIAN.)

The appeal court of Kiev has rejected the appeal of the company "Severodonetskoe Obyedinenye "Azot" on decision of Pecherskiy regional court of Kiev from March, 17th according to which the constituent documents and registration of the company have been recognized void.

Representative of State Property Fund has told about it on June, 27th, 2005.

As he said, thus, the decision of Pecherskiy court about invalidity of creation of the closed joint-stock company "Severodonetskoe Obyedinenye "Azot" has entered validity.

However, as the Ukrainian mass-media writes, first vice-prime minister Anatoly Kinakh has admitted an opportunity of the conclusion of the agreement of lawsuit between the Cabinet and company Worldwide Chemical LLC, an affiliated firm of "IBE Trade Corp." which owns 60 % shares of " Severodonetskoe Obyedinenye "Azot" (Lugansk region).

As he said, as one of variants of the agreement of lawsuit can be the reception by the state of a control share holding of Joint-Stock Company "Severodonetsk association "Nitrogen". "Today we have considered a situation on Severodonetsk " Nitrogen ", there a good variant of the agreement of lawsuit is planned when the investor voluntary agrees that the state had control share holding and now the search of variants goes ", - Kinakh has told.

(Press-service of "IBE Trade Corp.")

Kiev, September 6. INTERFAX-UKRAINA - Chairman of the Ukrainian State Property Fund (FGI) Valentina Semenyuk arrived in Severodonetsk to negotiate the settlement of the conflict around SEVERODONETSK Association AZOT CJSC at the instruction by the President of the Ukraine Viktor Yushchenko.

"We hold out the hope that the negotiations will help settle the situation", said Yevgeny Stepanov, IBE Trade Corp. (USA) press secretary speaking to the Interfax-Ukraina.

According to him, minister of the industrial policy Vladimir Shandra, Chairman of the CJSC Supervisory Committee Alexei Kunchenko arrived at the AZOT enterprise together with the FGI head, and have already started talks with the CJSC investor and co-founder Alex Rovt, an American businessman and President of the IBE Trade Corp.

Vladimir Lyakhov, appointed by the Ministry of Industrial Policy order General Director of Association AZOT Severodonetsk State Manufacturing Enterprise (SSME), the second CJSC co-founder, also participates in the negotiations.

Valentina Semenyuk addressed the rally participants gathered in the area adjacent to the AZOT plant and reassured them that the conflict will be resolved in a legal manner.

The rally participants welcomed the FGI head and reminded her about their demands, support of the CJSC management, which could not work in the CJSC office building that had been taken over by the AZOT SSME representatives.

As is known, in October 2004 the US-based Worldwide Chemical LLC Company won the competition to select the investor and co-founder of the CJSC established as part of the SSME reorganization, and has already transferred $60 mln to pay for 60% of its shares.

In accordance with the decision by the Pechora District Court of the City of Kiev of March 17, 2005, CJSC SEVERODONETSK Association AZOT must return the entire property to SSME as a contribution to the CJSC authorized capital. Worldwide Chemical LLC disputes this court ruling.

The first Vice Prime Minister Anatoly Kinah said back in July that the most likely solution to the conflict is an amicable settlement with the investor who agreed to concede the controlling interest in CJSC to the government authorities. Mr. Kinah praised the investor’s work as effective.

Meanwhile, on the 9th of August the Cabinet of Ministers instructed the Ministry of Justice and the Ministry of the Industrial Policy to comply with the court ruling without delay. The SSME announced the return of its capacities under the government control and its transition under Vladimir Lyakhov’s management.

In its turn, the CJSC press service said that the Stakhanovo Municipal Court acknowledged on July 8 the legitimacy of the establishment and registration with the government authorities of the SEVERODONETSK Association AZOT adding that the Ukrainian Supreme Court has all the reasons to cancel the ruling by the Kiev Pechora District Court and decision by the appellation court, which say that the CJSC establishment was illegal.

The AZOT SSME is the third largest chemical plant in the Ukraine, with a product line exceeding 30 items, namely, ammonia, methanol, formalin, ammonium saltpeter, carbamide, nitric and acetic acids. Worldwide Chemical LLC owns 60% of CJSC, whereas FGI owns 40%. In its turn, IBÅ Trade Corp owns 85% of the Worldwide Chemical LLC, and the Russian MINUDOBRENIYA OJSC operating under the control of the IBÅ Trade Corp owns 15% of it.

Interfax, 09/06/05

Kiev. September 6. INTERFAX-UKRAINA –SEVERODONETSK ASSOCIATION AZOT CJSC and AZOT Severodonetsk State Manufacturing Enterprise (SSME) will continue to operate as separate legal entities.

This understanding was achieved in the course of the negotiations started on Tuesday between the management of FGI, Ministry of the Industrial Policy and Alex Rovt, President of IBE Trade Corp. (USA) and CJSC investor and co-founder.

“We are satisfied with the current situation and hope to finally settle the issue”, said Evgeny Stepanov, IBE Trade Corp. press secretary speaking to Interfax- Ukraina.

According to him, the SSME General Director Vladimir Lyakhov left the office previously held by the CJSC senior executives, and will have some other official premises rented for him.

The FGI Chairperson Valentina Semeniuk, who arrived in Severodonetsk at the request of the President of the Ukraine Viktor Yuschenko, said that the Supreme Court would solve all debatable legal issues, added Mr. Stepanov.

According to him, the minister of the industrial policy Vladimir Shandra and the Chairman of the CJSC Supervisory Council Alexei Kunchenko joined the FGI head on this visit to AZOT. Vladimir Lyakhov also takes part in these negotiations.

Ms. Semeniuk addressed the participants in the rally held in an area adjacent to AZOT plant and reassured them that the conflict would be resolved in a legal manner.

The rally participants welcomed the FGI head and reminded her of their demands to support CJSC management that had been denied the opportunity to work in the CJSC office building taken over by the SSME AZOT.

As is known, in October 2004 the US-based Worldwide Chemical LLC Company won the competition to select the investor and co-founder of the CJSC established as part of the SSME reorganization, and has already transferred $60 mln to pay for 60% of its shares.

In accordance with the decision by the Pechora District Court of the City of Kiev of March 17, 2005, SEVERODONETSK Association AZOT CJSC must return the entire property to SSME as a contribution to the CJSC authorized capital. Worldwide Chemical LLC found this court ruling disputable.

The first Vice Prime Minister Anatoly Kinah said back in July that the most likely solution to the conflict was an amicable settlement with the investor who agreed to concede the controlling interest in CJSC to the government authorities. Mr. Kinah praised the investor’s work as effective.

Meanwhile, on the 9th of August the Cabinet of Ministers instructed the Ministry of Justice and the Ministry of the Industrial Policy to comply with the court ruling without delay. The SPME announced the return of its capacities under the government control and its transition under Vladimir Lyakhov’s management.

The CJSC press service said that the Stakhanovo Municipal Court acknowledged on July 8 the legitimacy of the SEVERODONETSK Association AZOT establishment and registration with the government authorities adding that the Ukrainian Supreme Court has all the reasons to cancel the ruling by the Kiev Pechora District Court and the decision by the appellation court, which found the CJSC establishment illegal.

The SSME AZOT is the third largest chemical plant in the Ukraine, with a product line exceeding 30 items, namely, ammonia, methanol, formalin, ammonium sulfate, urea, nitric and acetic acids. Worldwide Chemical LLC owns 60% of CJSC, whereas FGI owns 40%. In its turn, IBÅ Trade Corp owns 85% of the Worldwide Chemical LLC, and the Russian MINUDOBRENIYA OJSC operating under the control of the IBÅ Trade Corp owns 15% of it.

Interfax, 09/06/05

Lugansk, September 6. INTERFAX-UKRAINA – Following the negotiations between the management of Severodonetsk Association AZOT CJSC, head of the State Property Fund Valentina Semenyuk, and minister of the industrial policy Vladimir Shandra, the blockade of the office building was lifted, and the picketers left the premises.

According to the INTERFAX-UKRAINA correspondent, right after the negotiations came to an end, Ms. Semenyuk told participants in a multi-day rally to support CJSC that the property transfer from Severodonetsk Association AZOT CJSC to the state-run enterprise was postponed until the investigation by the Supreme Court of the cassation appeal filed by CJSC had been completed.

The office building is taken under the police control, whereas the private guards left the premises. The ZAO management and the state-run enterprise management will occupy the building at the same time.

Interfax. 07.09.05

Last Friday the manager of the Severodonetsk Association AZOT announced the takeover of the enterprise by unknown armed people. It became known later that the Ministry of the Industrial Policy, acting upon the decision by the Kiev Pechora District Court about the illegal nature of the closed joint-stock company establishment, appointed a new head of the enterprise. Later, the new head of the enterprise said that the enterprise had been switched back to the government control.

At the same time RIA Novosty cited Nina Yavorskaya, press secretary of the Ukrainian State Property Fund “complying with the law under the current situation is the main argument used by the FGI in trying to bring a solution to this dispute”.

A day before, Valentina Semenyuk, FGI Chairperson, made an announcement upon the negotiations with the head of Worldwide Chemical LLC held in Severodonetsk Alex Rovt, that “the transfer of the Severodonetsk Association AZOT CJSC back to the state is put off until the Supreme Court had completed processing of the complaint filed by the Worldwide Chemical LLC, owner of 60% of CJSC shares”.

Severodonetsk Association AZOT CJSC was established on December 24, 2004 by the Ukrainian State Property Fund and American Worldwide Chemical LLC, which is owned by IBE Trade Corp, a major trader in fertilizers. FGI brought in the FGI main assets of the Severodonetsk State Manufacturing Enterprise (SSME) AZOT, which was undergoing the reorganization and received 40% of the company’s stock, whereas the Worldwide Chemical LLC undertook to bring in $120 mln and receive 60% of the shares. Sixty million dollars have already been transferred. The other half, according to the reorganization plan, must be transferred by the end of 2005.

The Pechora District Court of the City of Kiev ruled on March 17, 2005 that CJSC had been established illegally and must return the CJSC production capacities to the state-run enterprise AZOT. In June, the Kiev Appellation Court confirmed the decision by the Kiev Pechora District Court.

However the Stakhanovo Municipal Court found the CJSC establishment legal on July 8, 2005.

The General Prosecutor’s Office issued a protest against the decisions made by the Pechora and Appellation Courts.

Acting against these decisions, the Prime Minister Yuliya Timoshenko instructed the Justice minister Roman Zvarych and the Industrial Policy minister Vladimir Shandra to ensure implementation of the Pechora Court ruling “in an urgent manner”.

KIEV, September 7 – RIA NOVOSTI, Taras Burnos.

To ensure uninterrupted production, Severodonetsk Azot is stoking up on substantial quantities ofnatural gas, according to a statement by Valentin Kazakov, CJSC Chairman of the Board.

Mr. Kazakov emphasized that the measure had been prompted by increasingly higher gas prices, natural gas being the prime raw material for Azot's products such as ammonia, chemical fertilizers, methanol.

According to Mr. Chairman, the underground storage facilities have already been filled with 100 mln cubic metres of gas, which will cushion the business for some time against adverse changes in the economic situation. Moreover, talks are in progress to arrange direct supplies of Russian gas to Azot.

Press service of IBE Trade Corp.

On October 12, Executive Vice President of Worldwide Chemical LLC, former Member of the United States Congress James William Grant, lawyers Elizabeth Holzman, Raymond Henigen and Irina Benfeld visited JSC “Severodonetsk Azot Association”. The investor’s representatives reviewed the program for the use of investments in further modernization and improvements of production facilities.

“In the near future", said the chair of the CJSC Supervisory Board Alexei Kunchenko, "with the help of the world's largest maker of chemical fertilizers, Yara International, Azot will start introducing technology to cut the consumption of prime raw material, i.e., natural gas, per unit of ammonia produced".

Press service of IBE Trade Corp.

The Supervisory Board and the Board of Directors of JSC “Severodonetsk Azot Association” presented to the government agencies their report on the use of the investments received at the formation of the closed joint-stock company.

“We have already used up all of the first $60 million tranche received from the US investor, Worldwide Chemical LLC". The money was used to pay creditors in full, purchase new equipment, and upgrade production facilities. Thus, the first stage of the investment program is complete," said Alexei Kunchenko, chair of the Supervisory Board.

According to Mr. Kunchenko, arrangements are now being made to provide the second tranche in the amount of 60 mln dollars. “The Chair of the State Property Fund Valentina Semenyuk joined Ukraine's President Victor Yushchenko in confirming that the US investments are absolutely safe in this country," said the chair of the Supervisory Board. “That is why they intend to wire the second tranche as planned towards the end of December of the current year.”

Press service of IBE Trade Corp.

“We did not come to Azot for a one-day tour, but we are here for good,” assured the company's executive vice president. “I've seen with my own eyes that our investments are being put to good use. I was very impressed with the ammonia production facilites, carbamide, acetic acid facilities and I see that the modernization efforts are in full swing."

Alex Rovt and the representatives of the world's largest producer of chemical fertilizers, Yara International ASA.visited ammonia production facility 1-A.

The U.S. investor finds the current rate of gas consumption in ammonia production, 1300+ cubic meters per ton, not satisfactory. Utilizing the experience of Yara International ASA, the Azot investor plans to cut down gas consumption to 1100, thus resulting in 15-20% savings on gas, which accounts for 70% of the cost of the end product.

“We are very concerned about the energy resources, their rates are expected to soar shortly. That is why we are trying to deal with this issue on priority basis. The business will keep its profit margins despite a gas rate hike. We shall try to offset the rising gas prices by reducing the rate of gas consumption without a drop in the output,” said Alex Rovt.

In his interview to the newspaper “Izvestia”, Alex Rovt, president of IBE Trade Corp., the parent company of Worldwide Chemical LLC, emphasized that an amicable settlement of all outstanding issues surrounding Severodonetsk Azot is supported by senior officials of Ukraine.

President of Ukraine Victor Yushchenko, secretary of National Security and Defence Council Anatoly Kinakh made statements in support of reaching an amicable agreement with the investors in Severodonetsk Azot. Chair of the State Property Fund Valentina Semenyuk, speaking on 11 October at an extended meeting of the Supervisory Board of the Joint Stock Company “Severodonetsk Azot Association”, said that the state has no claims against the investor. “Executive Vice President of Worldwide Chemical LLC James William Grant, together with our lawyers Elizabeth Holtzman, Raymond Hannigan and Irina Benfeld", said Alex Rovt, "attended the meeting of the Supervisory Board, with the representatives of the State Property Fund, Ministry of Industrial Policy, and the Office of the Prosecutor General. All participants of the meeting acknowledged the need for government agencies to cooperate in their efforts to remove the roadblocks to the successful operations of the joint-stock company. That is why we are hopeful that the Supreme Court will diligently review our case and will issue a fair decision."

Press service of IBE Trade Corp.

Today the Supreme Court of Ukraine dismissed the decisions of the Kiev Pechorskiy District Court and Kiev Appellate Court, and thus terminated the case that challenged the legality of the formation of the Joint Stock Company “Severodonetsk Azot Association.”

As a result of various gross violations committed during the lower court’s proceedings, a separate opinion was issued questioning the validity of actions of the Pecherskiy District Court Judge Umnova and challenging her conformity for a position that she presently occupies.

Thus, the legal proceeding that lasted almost one year is finally over.

Press service of IBE Trade Corp.

JSC “Severodonetsk Azot Association” opened the second vinyl acetate line. To mark the occasion, Severodonetsk Azot held an inauguration ceremony on 16 December 2005, attended by Gennady Moskal, chair of the Lugansk regional state administration, Vladimir Gritsishin, mayor of Severodonetsk, Alex Rovt, president of IBE Trade Corp., James William Grant, executive vice president of Worldwide Chemical LLC, Valentin Kazakov, chairman of the Board of the JSC “Severodonetsk Azot Association”.

The opening of the second line of the vinyl acetate production was made possible by the investments made by Worldwide Chemical. With the investment of 18.8 mln grivnas in the construction of two new vinyl acetate synthesis plants, the output of the product can double(up to 33 000 tons a month).

The investments into the retrofitting program resulted in an increased production capacity for carbamide, from 330 000 to 340 000 tons a year; aminoformaldehyde resin, from 30 000 to 42 000 tons a year; rectified methanol, from 175 000 to 200 000 tons a year; adipinic acid, from 228 000 to 297 000 tons a year.

The work in progress includes a long-term program of technological development of business through the year 2010, covering almost all basic production processes. The program is aimed at increasing the efficiency of power and material consumption, introducing environmentally safe technologies, and boosting output of a number of products.

Press service of IBE Trade Corp.

US company “Worldwide Chemical LLC” (the investor in JSC “Severodonetsk Azot Association”) has fully honored its investment commitments., On December 23, 2005, the Company transferred the second investment installment in Severodonetsk Azot in the amount of over $63 million. Partially, the funds will be used to buygas, the main cost component in the production of chemical fertilizers.

To date, Worldwide Chemical LLC, a subsidiary of IBE Trade Corp., has invested in the Joint Stock Company in excess of $123 million. The first investment installment in the amount of $60 mln was used to pay off creditors of State-owned “Obiedinenie Azot” and to upgrade the production facilities.

Press service of IBE Trade Corp.

On 10 March this year, the Supervisory Board of ZAO Severodonetskoye Ob’yedineniye Azot held a session to review the results of the company's activities in 2005 and its plans for 2006. The session was attended by all the members of the ZAO's Supervisory Board, which comprises representatives of both owners — IBE Trade Corp. and Ukraine's State Property Fund. The press conference following the session covered as one of the central issues the social benefits for the 11-thousand strong team at the facility.

President of IBE Trade Corp. Alex Rovt and chair of the Supervisory Board of ZAO Severodonetskoye Ob’yedineniye Azot Alexei Kunchenko assured the guests and journalists that the company wouldn't cut the social programmes in place. As for wages, starting 1 February this year, the base salaries and wage rates for all company staff have been raised by 25%. This has not been affected either by the gas problem or the complicated situation on the Ukrainian chemicals market .

In 2005, Severodonetsk Azot resolved a number of social issues: —compensation was raised across the board (an average level of 1,291 grivnas); —working conditions were improved for more than 2,000 people employed at the facility; — all benefits and guarantees were provided as specified by the collective agreement; — extra paid leaves of absence were granted for personal reasons (to 600+ persons); — bonuses were introduced for achievements in work or for completing vitally important jobs: up to 50% of the base salary (worth a total of 35.3 mln grivnas); — one-off bonuses were paid (worth a total of 765,000 grivnas); — pecuniary aid was provided for the company's staff and old-age pensioners (worth a total of 1.65 mln grivnas); — monthly child care allowances were paid (worth a total of 414,000 grivnas); — health care and recreation arranged for the staff and their dependents ( 2.9 mln grivnas spent for this purpose).); — comprehensive work safety measures were put in place (worth 414,000 grivnas); — health-improving measures were implemented (worth a total of 4.5 mln grivnas); — financing was provided for municipal facilities (worth 4.8 mln grivnas).

When commenting on the company's contributions to welfare, Alex Rovt said: "Not only will there be no scaling-down of Azot's social programmes, but they are, at the very least, to remain at the same level. Each employee of our company is aware that today they live better than their neighbours. But this is today. Tomorrow (and all are only too well aware of the fact), food, unfortunately, won't become cheaper. That is why the social programmes in place will not be curtailed. We will look into where they can be improved to make the entire team feel comfortable. In the second half of last year, we reached an average wage level of 1,300 grivnas or thereabouts. We believe this to be a very strong performance on a nationwide scale."

Alexei Kunchenko expanded on that: "We plan to establish for Azot two more performance targets: for example, housing loans. The proposals tabled by the workers will be reviewed in detail with due care, and if certain expenditure items are found in need of being beefed up, adequate financing will be made available for that."

Press service of IBE Trade Corp

On 10 March this year, the press conference following a session of the Supervisory Board of ZAO Severodonetskoye Ob’;yedineniye Azot made public the results of the company's activities in 2005. The manufacturer exceeded production targets across the board, with the overall production targets for the year met 103.6%. The production growth compared to 2004 was 7.9% (or 153,000 grivnas in comparable prices). This was achieved with the business using its production capacity 99.1% last year (similar showing for 2004 is 97.9%).

The fast growth of output in commercial grade products throughout 2005 was made possible thanks to an investment made by US-based corporation IBE Trade Corp., which owns a 60% stake in the ZAO. The total amount of investments by IBE Trade into Azot reached $163.5 mln, the investments having been used to honour the commitments to creditors, upgrade the equipment, boost the output capacity and raise wages. The 2006 priories are to introduce energy-saving technologies, continue retrofitting the production facilities, environmental and social programmes.

The President of IBE Trade Corp. Alex Rovt described the ZAO's performance using the following words: "To cut a long story short, we delivered outstanding results last year — just as we planned for our investments. I will highlight the progress made in modernising the facility. The benefits of our successful activities are felt nationwide: in 2005, in taxes alone, we contributed about 300 mln grivnas. Including to the state budget, which received from the ZAO 204 mln 977,000 grivnas, to the local budget 26 mln grivnas. The last figure is very important because the money is to be used to develop the town. The budgets at other levels received 66 mln grivnas; these are the Pension Fund, the Social Insurance Fund, and the Employment Fund. This is money that will make a difference to Severodonetsk residents very soon."

Answering a question about the company's prospects under the conditions of the natural gas price hike, Alex Rovt said: "Dear colleagues, gas won't become cheaper. I have been repeating that on all forums, on television, in debates, at press-conferences. It was only recently that we learned the actual gas price, but we had been squaring up to face a dramatic hike. That is why the ZAO management took steps, which I find to be in the right direction, to prevent a crisis: the cash infusions provided by investments were used to buy gas at the old price, thanks to which the facility is still in the black today. The first six months are going to be all right; an output slump is not considered an option. Neither is downsizing, it’s not on our agenda. We are going to stick to our promise of providing people with jobs: we need each person who is working at his or her job to the benefit of the company.

We have three months to solve the problem of procuring gas for the second half of the year. This involves finding an alternative source of gas supply at lower rates than those currently offered on the Ukrainian market. This can be Russia, Uzbekistan, Turkmenistan, etc. We are now in intensive talks with local traders with licences to distribute gas in Ukraine. We expect to make deals with them in the next month or two so that the targets can be met in the following six months too.

We are aware that as things stand today, even with gas supply negotiations concluded as planned, we will face certain problems. These are production problems — like those faced by other businesses. We want to give such problems as wide a berth as possible. That is why we are actively looking into options for retrofitting the facility, reducing energy consumption, introducing new technologies. All this, naturally enough, is impossible to achieve overnight. But the projects proposed by the technical team headed by the technical director will have their financing."

Press service of IBE Trade Corp

The management of ZAO Severodonetskoye Ob’yedineniye Azot and IBE Trade Corp. (owner of a 60% stake in the ZAO) assign top priority to projects to save energy and implement energy-saving technologies at the company. This was announced by the president of IBE Trade Corp. Alex Rovt 10 March at the press conference following a session of the Supervisory Board of ZAO Severodonetskoye Ob’yedineniye Azot.

The firm Yara International (the world's largest manufacturer of ammonia), together with experts of Severodonetsk Azot, developed a project to upgrade the production to energy-saving technologies. The project's feasibility study is currently in the final stage of the approval process. Azot's energy-saving strategy had been put in place long before the gas price hike. It includes the Programme for Modernisation and Retrofitting of the ZAO Severodonetskoye Ob’yedineniye Azot Facility through 2010. In 2005 alone, the programme saw over 15 mln grivnas invested into energy-saving technologies, which made it possible to save 22 mln cubic metres of natural gas and 1600 kW of electric power.

Mr Rovt described the problem of expensive gas using the following words: "We are aware that as things stand today, even with gas supply negotiations concluded as planned, we will face certain difficulties. These are production difficulties — like those faced by other businesses. We want to give such difficulties as wide a berth as possible. That is why we are actively looking into options for retrofitting the facility, reducing energy consumption, introducing new technologies. All this, naturally enough, is impossible to achieve overnight. But the projects proposed by the technical team headed by the technical director will have their financing."

The 2006 plans provide for some 300 mln grivnas to be earmarked for technical retrofitting of ZAO Severodonetskoye Ob’yedineniye Azot. The amount will be distributed among several projects. The first is to replace obsolete and worn-out equipment. The second is to introduce energy-saving technologies. The third is to computerize and optimize the engineering processes. The fourth is to protect the environment.

In addition, Alex Rovt suggested alternative sources to finance production upgrading: "A project that does not require investments either by us or the ZAO is the UN programme that provides for monetary compensation to the businesses that reduce emissions of the so-called greenhouse gases. Azot's source of such gases is the production of adipinic acid. We had a meeting with a major French firm, which offered us the following arrangement: they are prepared to invest money and certify a reduction in the emissions of greenhouse gases on the grounds of our company, with the ZAO becoming entitled to receive money from the United Nations Organization. The programme is designed for a year and a half but we are hopeful that results can be produced as early as at the beginning of next year, so that we could receive compensation in the second half of 2007."

In conclusion of his meeting with journalists, Alexei Kunchenko, chairman of the Supervisory Board, said: "First of all, I would like to thank the ZAO employees for delivering strong results in 2005. Also, I would like to thank our investor, IBE Trade Corp., in the person of the president of the corporation, Alex Rovt, and the chair of Ukraine's State Property Fund, V. P. Semenyuk, who were sympathetic to the problems caused by the natural gas price hike. The stockholders had the right to distribute all the profits made in 2005 as dividends. But the Supervisory Board, the Board of Governors of the ZAO contributions put forward an initiative to only distribute 50% of the profits. We asked that the remaining 50% be made available for the company's development, for implementation of the social programmes proposed by us. Our initiative met with total support of the meeting of shareholders. This demonstrates once again the seriousness of the investors' intentions, proves that they are in for the long haul and that they are willing to invest into the long-term, into the development, upgrading of the facility. This will bring its rewards in 3 to 5 years' time. And we give them many thanks for this!"

Press service of IBE Trade Corp

On 10 March this year, the Supervisory Board of ZAO Severodonetskoye Ob’yedineniye Azot held a session to review the results of the company's activities in 2005 and its plans for 2006. One of the items on the agenda was discussion of measures to rehabilitate SGPP Azot.

A government decision split SGPP Azot's polyethylene production from the newly-formed ZAO Severodonetskoye Ob’yedineniye Azot. Despite the fact that production itself had been suspended for a number of years and was bleeding red ink, it was put on the list of businesses excluded from privatization. Sitting as it does on the grounds of ZAO Severodonetskoye Ob’yedineniye Azot, the SGPP receives subsidies on a monthly basis (with the same ZAO picking up the tab) for the upkeep of its infrastructure and production facilities. But as recently as this year, Ukraine's State Property Fund submitted to the Cabinet Council for approval a new list of businesses whose shares are to be sold off. Among them is SGPP Azot.

At the press conference, Alexei Kunchenko, chair of the Supervisory Board of ZAO Severodonetskoye Ob’yedineniye Azot, answered the question about the company's prospects: “De jure, neither the ZAO, nor our investor has anything to do with production of polyethylene. But we are still concerned over what is to happen to it. But for the roadblocks to the rehabilitation plan proposed by us, the facilities of the business unit would have been used, long ago, to set up a second ZAO. An investor would have been selected, and we would have witnessed today modernisation and development of a raw materials source in progress on the SGPP site. But unfortunately this has not happened. I won't talk about the reasons; they have already been covered at length by the media.

We took it up once again with the region's administration, with our ZAO partners – the State Property Fund — in an attempt to justify putting the facility on the additional list for privatization in 2006. Today the list has been put together, and the Cabinet is expected to make a decision on it. Later on, the tender terms will be established and the search for an investor resumed. However, ahead of that, we are engaged today in talks with potential investors who might support the production. Today the polyethylene has but one executive: acting general director Vladimir Alekseyevich Berezhnoi. Any investor would most likely wish to see a CEO in place there under a contract made with the Ministry for Industrial Policy for 5 years.

Besides sharing the same grounds, ZAO Severodonetskoye Ob’yedineniye Azot and SGPP Azot may find themselves on a chain gang technologically. Polyethylene is produced from ethylene, which, in turn, can be derived from methanol. This way, the ZAO may become a source of raw materials for the SGPP.

Press service of IBE Trade Corp

Based on the results of April 2006, Azot Severodonetsk Association CJSC (60% of shares are held by IBE Trade Corp., 40%, by the Ukrainian State Property Fund) has 109.2% fulfilled its monthly assignment to manufacture marketable products. The capacity utilization rate came to 100% at the enterprise.

This enabled to increase tax payments. For April 2006, Azot Severodonetsk Association CJSC remitted UAH 7.858 million in taxes, including UAH 6.037 million to the Ukrainian national budget and UAH 1.822 million to the local budget.

Allocations to the Ukrainian Pension Fund came to UAH 5.511 million and to the Social Security Fund, to UAH 648,000, in April 2006

News Service, IBE Trade Corp.

On 27th May the staff of ZAO Severodonetskoye Ob’yedineniye Azot celebrated the 55th anniversary of the facility. The press conference to cover the event was attended by IBE Trade Corp. President Alex Rovt, the Ukrainian people's deputy Alexei Kunchenko, the deputy minister for Ukrainian industrial policy Valery Tretyakov, and James William Grant, vice president of Worldwide Chemical LLC (a subsidiary of IBE Trade Corp).

When answering a question by journalists about the situation with hikes in natural gas prices, Alex Rovt said: ‘We took a number of measures to protect the company from the consequences of increased gas prices. Specifically, we laid in stocks of gas at old rates worth more than 125 million grivnas. This gave us a chance to work normally while looking for a concrete alternative source of gas supplies. We are sorting this out now.’

Mr Rovt highlighted the outstanding performance of Azot's staff this year, giving it a top rating. Moreover, he commented that the results might have been still higher but for the adverse effect of the deteriorating economic situation in the global fertilizer market.

The figures for the first four months of 2006 show ZAO Severodonetskoye Ob’yedineniye Azot meeting its targets for manufacture of commercial grade products by 104.4%. The period saw 67.698 million grivnas worth of taxes paid (57.641 million to the state budget, and 10.058 million to local budgets). The contributions of the ZAO's staff to the Pension Fund amounted to 21.701 million grivnas; to the Social Insurance Fund, 1.781 million.

FYI: A 60% stake in ZAO Severodonetskoye Ob’yedineniye Azot is owned by one of the global leaders in the production and sale of chemical fertilizers, IBE Trade Corp; the remaining 40% is owned by Ukraine's State Property Fund.

SGPP Azot is 100% owned by the state.

Press service of IBE Trade Corp.

On 27th May the staff of ZAO Severodonetskoye Ob’yedineniye Azot celebrated the 55th anniversary of the facility. The press conference to cover the event was attended by IBE Trade Corp. President Alex Rovt, the people's deputy of the Ukraine Alexei Kunchenko, the deputy minister for Ukrainian industrial policy, Valery Tretyakov, and James William Grant, vice president of Worldwide Chemical LLC (a subsidiary of IBE Trade Corp). The press conference spotlighted polyethylene production, which is currently off line.

By a decision of government agencies the industrial site involved was split from the newly-formed ZAO Severodonetskoye Ob’yedineniye Azot into a separate business entity SGPP Azot. This made it impossible for the manufacturer to secure investments for recovery. Despite the fact that production itself had been suspended for a number of years, causing losses, SGPP Azot was put on a list of businesses excluded from privatization.

Located on the territory of ZAO Severodonetskoye Ob’yedineniye Azot, SGPP received subsidies on a monthly basis (with the same ZAO picking up the tab) for the upkeep of infrastructure and production facilities.

Valery Tretyakov described the situation using the following words: ‘So long as it (the polyethylene production) remains state-owned, it will never be brought on line again. That is why a (further) decision was made, and preparations for privatisation are now in progress. I expect that a decision will be made right after this to privatize it.’

Mr Tretyakov went on to say: ‘Today we bring into the country about 120,000 tons of polyethylene, while this facility alone could cover all the import shortages.’

Besides sharing the same grounds, ZAO Severodonetskoye Ob’yedineniye Azot and SGPP Azot are in the same chain of chemicals production. Polyethylene is produced from ethylene, which, in turn, can be derived from methanol. This way the ZAO may become a source of raw materials for the SGPP.

FYI: A 60% stake in ZAO Severodonetskoye Ob’yedineniye Azot is owned by one of the global leaders in the production and sale of chemical fertilizers, IBE Trade Corp; the remaining 40% is owned by Ukraine's State Property Fund.

SGPP Azot is 100% owned by the state.

Press service of IBE Trade Corp.

The North Donetsk "Azot" Concern (60% of the shares belong to the IBE Trade Corp.; 40% to the Ukrainian State Property Fund) successfully completed its production programme for May, 2006. The product production plan was fulfilled 104.2%.

The monthly production plan for all chemicals except acetylene and vinyl acetate was overfulfilled.

The stable work at the factories and the sections has reflected positively on the enterprise’s ability to meet its financial obligations to the state. In May 2006, the North Donetsk "Azot" Concern paid taxes amounting to 11,288,200 grivni (comprising 9,181,100 to the state budget and 2,107,100 to the local budget).

Payments deducted from the pay of chemical workers at the North Donetsk "Azot" Concern for the Ukrainian Pension Fund amounted to 5,605,200, and to 465.300 for the Social Insurance Fund.

Press Service, IBE Trade Corp

Over seven months (January through July) of 2006, ZAO Severodonetsk Association AZOT* paid 93.802 mln hryvnyas, or USD 18.575 mln, in taxes. Ukraine’s state budget received 77.220 mln hryvnyas, or $15.291 mln, Severodonetsk local budget received 16.581 mln hryvnyas, or USD 3.283 mln).

Allocations by AZOT to the Pension Fund amounted to 39.321 mln hryvnyas, or USD 7.786 mln, and to the Social Insurance Fund, 3.267 mln hryvnyas, or USD 674,000.

*60% of interest is owned by Worldwide Chemical LLC (IBE Trade Corp. subsidiary), 40% by Ukraine’s State Property Fund.

IBE Trade Corp. Press service

Severodonetsky AZOT is a city and budget supporting enterprise which successfully implements social programs.

From the day of its creation –December 24, 2004 – the company has spent 36.9 grivnas on social needs (maintenance of the ‘Yantar’ sanatorium, community health clinics, children’s health camps, and recreation camps, among others).

In its two years of existence, the company has paid 323.3 million grivnas worth of taxes – 269.7 million to the state budget, and 53.6 million to the local budget.

Severnodonetsky AZOT’s contribution to the pension fund for the same period was 117.8 million grivnas, while the contribution to social insurance was 11.5 million.

IBE Trade Corp. Press service

The Supervisory Council of Severodonetsky Azot CJSC held a meeting on March 29, which was attended by all Council members. Main items on the agenda were discussion of the financial report submitted by the executive board for 2006 and the first quarter of 2007, and plans for technical development of the plant and modernization of its production.

Alex Rovt, Chairman of the Supervisory Council of Severdonetsky Azot CJSC, said at the press conference after the meeting:

“Severodonetsky Azot avoided losses last year despite a difficult situation in the chemicals sector, mainly due to rapid increase in prices for natural gas. A profit was achieved, although it was much less than in 2006, which was a successful year. The company was able to make full use of its capacities, maintain wage payment to employees, and meet its tax obligations. The company, its managers and the workforce deserve the highest praise for their efforts.

“Important issues considered by the Supervisory Council included a program for technical development and installation of energy saving technologies. We have approved the program in principle and we will submit it to the shareholders meeting at the end of May.”

Severodonetsky Azot CJSC remains one of the biggest tax payers in Ukraine. The plant paid UAH 11.383 million as tax in the first quarter of 2007, of which 4.273 million to the state budget and 7.11 million to the local budget.

In the same period the company paid UAH 18.348 million to the Ukrainian Pension Fund and 1.61 million to the Social Insurance Fund.

Worldwide Chemical LLC (a subsidiary of IBE Trade Corp.) owns 60% of Severodonetsky Azot and 40% is owned by the Ukrainian State Property Fund.

Press service of IBE Trade Corp.

Extracts from the speech by the Chairman of the Supervisory Council of Severodonetsky Azot, Alex Rovt, at the meeting of managers and workforce.

The situation with energy prices was difficult in 2006 and even more difficult in 2007, but I am very pleased to be able to say that our common efforts have brought positive results nevertheless. We are all optimists, so difficulties hold no terrors for us. We have come through a tough period together and we are the stronger for it.

We all know that gas prices are not going to fall. Unfortunately they will only grow. Gas represents about 70% of our raw material costs and nitrogen fertilizers are about 80% of our output. Gas is our main raw material, which means further difficulties on the road ahead. But we remain optimistic in our plans for the future. Firstly, we intend to buy and install energy saving equipment. We will try our hardest to reduce dependence on natural gas by developing outputs, which do not require major gas consumption. The Technical Director and Technical Department have proposed a program for the coming three years, which gives an important role to goods, such as high-pressure polyethylene, which are not tied to the gas price. This is our only option for further development of the company: high energy prices make other courses impossible.

The Supervisory Council has decided to pay bonuses to all employees for the first quarter of 2007 equal to half of the factual monthly wage or wage due under company rules. Average wages at Severodonetsky Azot are currently 40% higher than the average in our Region. We want to make them even higher, because chemical production has special features. We will do all we can, through reduction of gas dependence, to restore the favourable situation, which the company enjoyed in 2004-2005, when available resources for development were much greater.

We must all understand - there is only one way forward. Speaking for ourselves and for investors, I can assure you that we will not take a single kopeck from the plant in dividends over the next three years. All the money, which we earn, will be invested in production.

We must start to produce new goods, which bring additional profit. We must also consider alternative ways of obtaining gas, such as independent development of gas wells, if that is permissible under the Ukrainian law. We are working on that possibility and on others.

I can assure you on behalf of shareholders: we will do all we can to ensure that our excellent team of managers and employees continues to develop in the future. When we come here we want to see smiles on your faces and to know that Azot employees enjoy their work and receive a proper wage for doing it.

Thank you once more for your labour, and for everything you do for the company!

Press service of IBE Trade Corp.