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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!

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

From the day of its creation

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

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

On 27th May the staff of ZAO Severodonetskoye Ob

On 27th May the staff of ZAO Severodonetskoye Ob

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

On 10 March this year, the Supervisory Board of ZAO Severodonetskoye Ob

The management of ZAO Severodonetskoye Ob

On 10 March this year, the press conference following a session of the Supervisory Board of ZAO Severodonetskoye Ob

On 10 March this year, the Supervisory Board of ZAO Severodonetskoye Ob

 JSC

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

In his interview to the newspaper

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.

The Supervisory Board and the Board of Directors of JSC

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

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.

 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

Lugansk, September 6. INTERFAX-UKRAINA

Kiev. September 6. INTERFAX-UKRAINA

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

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.

The first vice-prime minister of Ukraine Anatoly Kinakh predicts the conclusion of the agreement of lawsuit with the investor of

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

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

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)

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.

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.

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.

This report you can find here (373 Kb).

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.

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.

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

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.

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

Celebration of the 55th anniversary of Azor Severodonetsk Association CJSC is to be held at the enterprise on May 27. Azot

Severodonetskoye Ob

The life of Igor Nickolaevich Olshanskiy, the Executive Vice President of IBE Trade Corp., an outstanding person, an extraordinary leader and organizer, was tragically cut short. His family, relatives, colleagues and friends have suffered an irreplaceable loss.

Igor Nickolaevich Olshanskiy devoted his short but vivid life to the revival of Russian and Ukrainian industrial production, and establishment of vital economic and social programs. In recent years, his work was inseparably connected with the operations of OJSC

The newspaper Trud-Ukraina (No 74 (477) of 30 September

President of IBE Trade Corp. Alex Rovt, US citizen of Ukrainian descent, investor of Severodonetskoye Ob

On the 27th of May, 2005, the annual stockholders' meeting of JSC "Minudobreniya", Rossosh took place. At the meeting alterations to the articles of association of JSC have been made and membership of committee of directors has been broadened.

A number of articles has appeared in Ukrainian press, which negatively cover the establishment of closed joint-stock company

ZAO Severodonetsk Association AZOT (Lugansk Region) plans to commence upgrading the UREA shop in 2007.

The Lugansk Oblast-based Severodonetsk Association AZOT, major producer of ammonia and nitric fertilizers, increased its output by 5.48% in comparable prices, or 60.471 mln hryvnyas, to a total of 1,164.284 mln hryvnyas over the period from January through June 2006 as compared with the same period in 2005.

The Ukrainski Novini news agency learned this from the Kiev-based IBE Trade Corp., AZOT shareholder, press service.

Major producer of ammonia and nitric fertilizers, Lugansk-based Severodonetsk Association AZOT closed the first six months of 2006 through June with net profit of 12.275 mln hryvnyas.

The Ukrainski Novini news agency learned this from the Kiev-based IBE Trade Corp., AZOT shareholder, press service.

This year, chemical workers at the North Donetsk

The press service of the North Donetsk "Azot" Concern informed Kommersant today that it plans to undertake the technical re-equipment of the enterprises fixed assets to mark Chemical Worker's Day (May 28).

Raising investments into Ukraine