St. Petersburg – PhosAgro CEO Andrey Guryev took part in a panel session on “Identifying the Future Industrial Leaders” during which he set forth his vision of PhosAgro’s digital transformation as a way to retain the company’s leadership on the global fertiliser market.
According to Guryev, awareness of the need to digitalise key production and business processes came when PhosAgro developed its Strategy to 2020. Today, all links in the chain have been either fully or partially digitalised: mining and processing of raw materials, fertiliser production, sales and logistics. Over the past five years, PhosAgro has increased fertiliser production by a factor of 1.5 to 9 million tonnes, becoming Russia’s leader in labour productivity.
“There are things in our business that we can control and those which we cannot. For example, we can’t control market prices for fertiliser, which are determined exclusively by market conditions,” Guryev noted in his remarks. “But we can and should control our production costs in order to remain competitive in each of the 100 countries where consumers purchase PhosAgro fertilisers. This includes Russia, where PhosAgro is the leading fertiliser supplier.
“PhosAgro has come a long way when it comes to digitalisation. To understand its place and role in the Group’s business, optimisation of management processes followed, and then transition of key functions to digital platforms.
“For me, digitalisation means efficiency. About six years ago, we began implementing integrated reporting across the entire PhosAgro Group, and today at our disposal we have a quality tool to control all types of resources. Each link in the chain can be factored in, analysed, and improved. Thanks to digitalisation we have been able to focus on strategic asset management in order to secure double-digit production growth rates while simultaneously strengthening our leading cost profile.
“One of the largest projects involves introducing integrated planning. The planned Soviet economy was doomed not least due to the lack of computing equipment and applications that ensure planning accuracy. Such tools are available to us today, and they give us the ability to intelligently plan demand, production, logistics, etc. We understand how a change in a given indicator will affect sales in regions thousands of kilometres away, and we can plan for this. On the contrary, for example, we know that unplanned idle time at one of our ammonia units can result in direct losses. Reducing scheduled repair time by 10 days through optimal organisation results in a gain of USD 5-10 million.
“On top of this, of course, is the introduction of modern technology. Only yesterday such technology seemed to be in the realm of fantasy, but today it is providing PhosAgro with unique advantages over its competitors. For example, remote control of underground drilling represents the future of mining. An operator located in a control centre on the surface controls several drilling rigs underground. Tests have shown that labour productivity has increased by 20% as a result, while the safety of underground mining has increased severalfold. We currently have 10 such plants but are planning to increase their number.
“Another pioneering project for our country is unmanned hoppers and excavating equipment at our quarry in the Murmansk Region, which can operate in any weather and in almost any conditions. The use of unmanned vehicles above all increases the safety of people, and second, it provides significant time savings and reduces fuel consumption due to optimal equipment loading and digital routing of equipment movement. I am confident that PhosAgro’s experience in this area will find further application not only in the mining sector and the chemical industry, but in other industries as well.
“We are collecting big data, which is the future of any enterprise, corporation, or country. Big data help us calculate errors. For example, digital flotation control at PhosAgro beneficiation plants allows to obtain full information in real time about the state of the process and make adjustments to process parameters to ensure maximum product yield and quality of mineral concentrates.
“I am certain that if you think about the future of your company and that if you care about competitiveness, then you are constantly looking for advanced ways to develop. These opportunities are given to us by the digital world, which is helping PhosAgro increase efficiency, keep one step ahead of our competitors and maintain a leading position in the mineral fertiliser industry.”