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PhosAgro Launches Smart Bulk Terminal

16 June 2015
Moscow – PhosAgro (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers, announces that it has officially commissioned Smart Bulk Terminal, the Company’s new fertilizer terminal in Ust-Luga.  PhosAgro’s partner in this project is Ultramar, Russia’s largest provider of container transportation services for mineral fertilizers.

The Smart Bulk Terminal opening ceremony took place as part of business programme of the 2015 St. Petersburg International Economic Forum.  The Head of the Leningrad Region Alexander Drozdenko, PhosAgro CEO Andrey Guryev, Chairman of the Board of Directors Ust-Luga Company Valery Izrailit, Head of the Oktyabrskaya Railway Oleg Valunskiy, and Ultramar CEO Anrey Bonch-Bruevich all participated in the ceremony.

The new terminal complex has a capacity of over 1.5 million tonnes of mineral fertilizers per year, and its storage facilities can hold up to 80,000 tonnes of fertilizer. This project is unique because handling and storage capacities can be doubled in a short period of time if and when needed.

Ultramar CEO Andrey Bonch-Bruevich said: “This project is a breakthrough not just for Russia but among ports worldwide in terms of the speed and quality with which cargo will be handled.”

Fertilizers are unloaded from railcars onto shipping vessels, with each shipload being stored in specialised containers.  The containers can also be used as mobile warehouse storage facilities, making it possible to assemble shiploads consisting of various fertilizer grades and to safely store the products.  The facilities make it possible to store different fertilizer grades simultaneously.  The unique containers are designed for quick loading and unloading.  At present, Smart Bulk Terminal can handle 180 mineral hoppers (approximately 12 ths tonnes of mineral fertilizers) per day, and can load ships at a rate of 15 ths tonnes per day.

The made-to-order containers were supplied by China International Marine Containers (“CIMC”).  This project with PhosAgro was the Russian market debut for Nantong CIMC-Special Transportation Equipment Manufacture Co., Ltd, which is a producer of specialised and experimental sea transport containers.

PhosAgro CEO Andrey Guryev said: “Developing our own port terminal capacities enables us to decrease transportation costs and further strengthens PhosAgro’s position as the leader on the global cost curve.

“By using the best available technologies and technical solutions, this project will enjoy an exceptionally high return on investments.  Investments in terminals with similar capacities are often far more expensive.”

Total investments in the project amounted to RUB 650 million, representing own and external funding contributed by PhosAgro and Ultramar in accordance with their 70/30 ownership of Smart Bulk Terminal.

Acting Governor of the Leningrad Region Alexander Drozdenko said: “PhosAgro’s decisions to expand its production facilities and open a new port terminal in the Leningrad region reflect the fact that we have created an attractive environment for serious investments and high-tech projects.”

The Head of the Region noted that PhosAgro and the Leningrad region have long been partners: “For us the new terminal means increased tax income, new infrastructure and new jobs.”

The development of port facilities in Ust-Luga is an extension of the agreement on socio-economic cooperation between the Leningrad region and PhosAgro signed at the 2014 St. Petersburg International Economic Forum.  In February of this year, PhosAgro with the support of the Leningrad region completed construction of a new complex fertilizer production line at Metachem in Volkhov.