Business Times Singapore
CEO says presence in Republic has become essential as its business expands in Asia Singapore THE world's largest global producer of high-grade phosphate rock, PhosAgro, has set up a trading office in Singapore, its first outside Europe.
The Russian fertiliser firm told The Business Times that a presence in Singapore has become essential as its business expands in Asia.
"We're doing a lot of trades in Asia. We decided that in terms of how the market is structured, we have to be here," said its CEO, Andrey Guryev.
The office, which has a headcount of five and could expand to seven in the near future, is expected to sell half a million tonne of fertilisers ranging from urea, ammonium nitrate, ammonium phosphates and NPK (nitrogen, phosphorus and potassium) to customers in Asia, Africa and possibly Australia and New Zealand in future.
This translates to revenue of about US$150 million a year, which is expected to grow by about US$50 million a year for five years after that.
"This region is the most important today, we see huge potential in terms of consumption growth," said Mr Guryev.
The company last year decided to focus on complex NPK fertilisers instead of ammonium phosphate fertilisers. The precise nutrient balance in NPK fertilisers make them more attractive to farmers, Mr Guryev explained.
Asia is the main region outside of Russia where PhosAgro sells its NPK fertilisers to.
Mr Guryev explained that while the group will focus on all markets, "nevertheless Asia has become more and more significant for our sales. It has to be managed in a very proper way, taking into account the mentality of Asians. So you have to be there face-to-face to show support".
PhosAgro decided on Singapore because of the infrastructure of banks, law firms and insurance companies, as well as its geographical location which allows for ease of travel from Moscow and to its other markets in Asia.
It could also tap the capital market in Singapore, as the London-listed firm sees "substantial interest" from Singapore investors in Russian assets, particularly in agriculture.