PhosAgro-Region increases sales volumes by 7% in 2018 to 2.93 mln t.

Moscow — PhosAgro-Region* (PhosAgro Group), Russia’s largest mineral fertilizer distribution network, increased its total supply of mineral fertilisers to the Russian market by 7% in 2018, to 2.93 million tonnes.

According to the Russian Association of Fertilizer Producers, PhosAgro Group is the largest distributor of mineral fertilizers for Russian farmers. The Russian market remains a priority for PhosAgro Group, accounting for 30% of sales, more than any of the 100 other countries where PhosAgro fertilizers are in demand.

PhosAgro Group is developing a distribution network for its mineral fertilizers called PhosAgro-Region. It is the largest such network by total sales volumes, as well as by regional coverage. In 2018, PhosAgro-Region delivered 2.43 million tonnes of mineral fertilizers produced by PhosAgro Group enterprises to Russian consumers, as well as more than 500 thousand tonnes of agrochemical products from third-party producers.

Investments in growing the PhosAgro-Region network in 2018 exceeded RUB 800 million; the number of PhosAgro-Region distribution centres increased from 22 to 25 during the year, and capacity for simultaneous storage of solid and liquid fertilizers exceeded 530 thousand tonnes.

“The record sales figure for PhosAgro in Russia was one of the main indicators of the ongoing transformation of the PhosAgro-Region distribution network into a universal distributor of fertilizers and related products and services to Russian farmers. This is facilitated by PhosAgro’s transition from a supplier of individual nutrients to a promoter of integrated mineral plant nutrition systems based on introducing various types of fertilizers that are most suitable for a particular culture, soil and climatic conditions, and in particular, with the use of new brands of PhosAgro fertilizers with bioadditives. Ultimately, the clients of PhosAgro-Region are farmers in dozens of regions of Russia who benefited from our advice last year on the use of fertilizers to increase productivity and product quality, which helped to achieve high crop yields even in adverse weather conditions,” said PhosAgro CEO Andrey Guryev. “We continue to focus on ensuring reliable supplies to Russian agricultural enterprises of PhosAgro’s mineral fertilizers, which are naturally low in impurities, and which are key to ensuring the quality and safety of Russian food.”

The main consumers of PhosAgro-Region products and services are the Central Black Earth Region and Southern Russia, which account for more than 70% of sales to the domestic market.

“PhosAgro-Region has the most extensive fertilizer distribution network, with the widest regional coverage and largest number of points of presence, and its services which are used by farmers from remote and inaccessible regions of Russia. Following the opening of a regional office in Siberia in 2017, PhosAgro Group in 2018 became the first and so far only national producer of mineral fertilizers to open a representative office in the Far East. Last growing season, our complex sulphate fertilizer helped increase the production of oilseed in Siberia. I am sure that our work in the Far East will give an additional stimulus to increase production of grain and soybean crops for both domestic consumption and export,” said Sergey Pronin, Deputy General Director for Sales and Marketing of PhosAgro.

In 2018, for the first time in PhosAgro’s more than 20-year history, annual sales of PhosAgro NPK fertilizers exceeded 1 million tonnes.

The main share of NPK sales (about 60%) comes from NPK (S) 10:26:26(2). NPK(S) 6:20:30(2) sales increased by 30%, principally in the Volga region. One of the new releases from 2018, NPK 12:32:16 was in high demand in the south of Russia.

In 2018, PhosAgro launched a new line of complex fertilizers containing sulphur and calcium (NPK(S)+Ca) for acidic soils. In addition to providing plants with nitrogen, phosphorus, potassium and sulphur, these fertilizers reduce soil acidity, enrich them with calcium and increase plant resistance to soil acidity. NPK(S) 5:15:30(5) + 7CaO has proved highly efficient in the Kursk region, where local farmers use it for spring grain and sugar beet.

2018 was the first full operational year for PhosAgro’s new ammonia unit, with the production site at Cherepovets now fully self-sufficient in this crucial feedstock. Throughout 2018, PhosAgro increased the production of nitrogen-based fertilizers — AN and urea — by 22.4%, and their sales in Russia by 20% to more than 500 thousand tonnes.

In 2018, PhosAgro-Region set a record for sales of NPS that amounted to 170 thousand tonnes.

“We will continue investing in the distribution network, increasing the number of distribution centres and improving the business infrastructure of PhosAgro-Region. At the same time, we expect that 2019 will see the next stage in the struggle for agricultural business profitability and lower logistical costs for mineral fertilizer users, such as through the introduction of new services, which could have a significant impact. Our next step in this direction is the development of a system for controlling the delivery and application of PhosAgro mineral fertilizers throughout the entire supply chain ‘from the conveyor to the field’ using RFID and NFC technologies. This is aimed primarily at reducing consumer costs by automating the accounting of the entire volume of mineral fertilizers and ensuring reliable delivery of products to the fields. The system will be presented in March 2019 at one of our distribution centres. This is the first project of its kind regarding mineral fertilizers, which we hope will be valuable for the digitalization of agriculture,” said Andrey Vovk, CEO of PhosAgro-Region.

About the Company

PhosAgro is one of the world’s leading vertically integrated phosphate-based fertilizer producers in terms of production volumes of phosphate-based fertilizers and high-grade phosphate rock with a P2O5 content of 39% and higher.

The Company is the largest phosphate-based fertilizer producer in Europe (by total combined capacity for DAP/MAP/NP/NPK/NPS), the largest producer of high-grade phosphate rock with a P2O5 content of 39%, a top-three producer of MAP/DAP globally, one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia, and Russia’s only producer of nepheline concentrate (according to the RAFP).

PhosAgro’s main products include phosphate rock, 39 grades of fertilizers, feed phosphates, ammonia, and sodium tripolyphosphate, which are used by customers in 100 countries spanning all of the world’s inhabited continents. The Company’s priority markets outside of Russia and the CIS are Latin America, Europe and Asia.

PhosAgro’s shares are traded on the Moscow Exchange, and Global Depositary Receipts (GDRs) for shares trade on the London Stock Exchange (under the ticker PHOR). Since 1 June 2016, the Company’s GDRs have been included in the MSCI Russia and MSCI Emerging Markets indexes.

* In terms of total supply of fertilizers and capacity of a fertilizer single