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Russian market

The Russian market is a priority for PhosAgro

  • The Russian market holds significant potential, and PhosAgro views it as one of the best opportunities globally in terms of agricultural sector growth option. Russian agricultural enterprises have become more competitive thanks to the depreciation of the rouble and state support for the sector, as well as significant investments into modernising agricultural production. PhosAgro’s sales to local farmers grew by 30% year-on-year in 2016, while our share of the overall Russian fertilizer market is nearing 27%. We have become the largest supplier of fertilizers to Russian agricultural producers thanks to continued investments into our market-leading distribution and sales network. Our home market accounted for 33.6% of revenue in 2016, up from an average of 29.6% in 2011–2015. Russian farmers’ demand for fertilizers has been supported by strong performance thanks to years of investment and advantageous export market conditions.

  • Domestic sales Sales volumes in our domestic market  increased 30% year-on-year in 2016, to 2.1 million tonnes.


The Company holds strong positions on the domestic market

  • PhosAgro can draw on its own powerful resource base. The Company is entirely self-sufficient in phosphate rock (raw material used in the production of phosphate-based and complex fertilisers), is 82% self-sufficient in ammonia (raw material used in the production of nitrogen, compound and complex fertilisers); it is more than 40% self-sufficient in electricity;
  • The Company is not dependent on supplies of imported raw materials. Russian suppliers meet PhosAgro’s requirements for sulphur (raw material for the production of sulphuric acid used to manufacture phosphate-based products), potassium, natural gas, electricity and other types of raw materials. Prices for certain types of products are state-regulated, curbing growth in production costs.
  • PhosAgro can leverage its own sales network and owns a subsidiary freight-forwarding company. PhosAgro’s representative offices are located in all of the country’s key agrarian districts. PhosAgro-Region, a subsidiary of the holding company, owns and manages 10 regional branches and 20 agricultural chemicals storage facilities with storage capacities of about 280,000 tonnes of finished products. In addition, the company leases 180,000 tonnes of additional storage capacities. The company’s distribution network makes it possible to establish close relations with customers and actively promote the PhosAgro brand. PhosAgro’s primary assets are located close to its customers, while products are delivered by subsidiary, freight-forwarding company PhosAgro-Trans. Consequently, PhosAgro is in full control of its product distribution expenses in Russia

Russia’s domestic market has growth potential

  • According to the Integer, at present annual consumption of mineral fertilisers in Russia amounts to only 40kg per hectare of arable land. By way of comparison: in European countries this figure reaches 149kg, and in the USA – 131kg.
  • Similar growth rates in demand for phosphates and phosphate-based fertilisers can be expected in the future on the Russian domestic market. 

USE OF FERTILISERS, KG NUTRIENTS/HA
EU149
Brazil182
USA131
Russia40
Source: Rosstat, FAO

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