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PhosAgro and the Government of the Leningrad Region Sign Agreement on Social and Economic Partnership Through 2022

2 September 2020
St. Petersburg – PhosAgro and the Government of the Leningrad region have signed an agreement on social and economic partnership. The document was signed by Alexander Drozdenko, Governor of the Leningrad region, and Andrey Guryev, CEO of PhosAgro.

The agreement will last though 31 December 2021 and may be extended upon mutual agreement of the parties. The agreement aims to strengthen effective ties between PhosAgro and the Government of the Leningrad region in terms of investment, social and charity programmes in the region, as well as environmental and occupational health and safety projects.

In 2019, PhosAgro launched a major investment project to construct a new modern phosphate-based fertilizer production facility and an energy generation unit in Volkhov. Total investments in the project are estimated at RUB 28 billion, with the launch of key facilities scheduled for next year. 

Before this new project, PhosAgro had already invested over RUB 6 billion in the Volkhov production complex between 2012 and 2018, where it developed new production capacities, as well as warehouse and logistics facilities. PhosAgro equipped the production complex with the latest waste water treatment facilities and introduced closed-water-cycle production. The funds allocated for environmental protection have been constantly increasing and in the last three years alone exceeded RUB 1 billion. Per the agreement, more than RUB 800 million will be allocated for that purpose in 2020. Over RUB 163 million will be dedicated to occupational health and safety programmes. 

More than RUB 130 million will be allocated by the end of the year to finance social and charitable programmes in the city, the district and the Leningrad region. Expected tax payments to the consolidated budget of the Leningrad region should exceed RUB 230 million. In 2020, the average monthly salary at the Volkhov production complex will exceed the average for the Leningrad region and will amount to at least RUB 65.78 thousand, with the Company rigorously ensuring all social guarantees and benefits.

“PhosAgro has brought the region its social programmes to support medicine and education, culture and sports, as well as a corporate housing programme. Very soon, Volkhov will have a modern production facility that uses best available technologies and has prioritised environmental safety, ”said Alexander Drozdenko, Governor of the Leningrad region.

The Governor of the Leningrad region also drew attention to the active support PhosAgro has provided to Volkhov’s medical and social institutions during the coronavirus pandemic.

PhosAgro CEO Andrey Guryev noted that the Leningrad region has created favourable conditions for business development, and this played an important role in determining the choice of location for a new production line.

“I would like to take this opportunity to express my gratitude to the Governor of the Leningrad region Alexander Yuryevich Drozdenko. We highly appreciate the atmosphere of constructive dialogue that has been established,” Andrey Guryev emphasised. Mr Guryev added that thanks to joint efforts to fight COVID-19 in the region and at the PhosAgro enterprise in Volkhov, the company managed to avoid curtailing production and investment programmes, as well as headcount optimisations. In fact, PhosAgro has created more than 100 new jobs in Volkhov since the beginning of the year and is fully implementing social programs.

“All work is currently going according to plan, and in fact we are even slightly ahead of schedule. In the fourth quarter of this year, we will already increase our production capacity, enabling the Volkhov production complex to produce an additional 300 thousand tonnes of fertilizers in 2021. In the summer of 2021, we plan to commission the second stage of the project, which will increase annual capacity to 800 thousand tonnes on the new production line in 2022,” Mr Guryev said.

The new investment project is fully in line with the long-term development strategy of the chemical and petrochemical industry in Russia to modernise existing and create new production facilities using the best available technologies that are compliant with the strictest Russian and European environmental legislation.

This new production line will contribute to food security in Russia and to increasing the competitiveness of domestic fertilizer producers in export markets with highly processed products.

The Company has already implemented a number of projects in the Leningrad region to create transport and logistics infrastructure, taking part in the construction of port terminals in Ust-Luga.