Annual Report 2015

Staying close to our customers

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Driving cost competitiveness

Dmitry Strezhnev

Chief Executive Officer's review

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Group overview


Our three nitrogen plants produce a wide range of mineral fertilizers such as urea, AN, UAN, CAN and a range of regular and tailored complex NPK grades.

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Our plants in Russia and Lithuania produce MAP, DAP, NP and feed phosphates as well as a growing number of complex products.

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Our two key assets, EuroChem VolgaKaliy and EuroChem Usolskiy, are scheduled to commence operations around 2017-2018. They are widely expected to be amongst the lowest cost potash operations globally.

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We serve our extensive customer base through an efficient distribution platform.

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Natural Gas
Nitrogen fertilizer production
Phosphate fertilizer production
Phosphate mining

Our unique business model

Our vertically integrated business model
provides EuroChem with distinct cost advantages and economies of scale.

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Natural gas

Natural gas is the primary raw material used to produce ammonia, the main component of nitrogen-based fertilizers. Our own oil and gas operations help reduce natural gas costs, boost our ammonia gas efficiency and strengthen our cost advantages. Over the last couple of years, the competitiveness of our predominantly Russian-based nitrogen assets has considerably expanded on the back of the devaluation of the Russian currency.

Nitrogen fertilizer production

Our three nitrogen plants produce mineral fertilizers including urea, AN, UAN, CAN as well as a variety of regular and tailored complex NPK grades. We are Russia’s only manufacturer of AdBlue® and melamine and also produce nitric acid, methanol and industrial gases including argon, nitrogen, oxygen, carbon dioxide and solid carbon dioxide (dry ice).


EuroChem has rights to over 10 billion tonnes of potash reserves and resources in Russia. Our two key assets, EuroChem VolgaKaliy (Gremyachinskoe deposit, Volgograd region) and EuroChem Usolskiy (Verkhnekamskoe deposit, Perm region), are scheduled to commence operations around 2017-2018. They are widely expected to be amongst the lowest cost potash operations globally.


We serve our extensive customer base through an efficient distribution platform. With trading arms in the US, Switzerland and Brazil and our EuroChem Agro distribution assets the Group sells to wholesalers, distributors and cooperatives across Northern, Central and Eastern Europe, South East Asia and the Americas.

Phosphate fertilizer production

Our plants in Russia and Lithuania produce MAP, DAP, NP and feed phosphates as well as a growing number of complex products. All our facilities have sulphuric acid capacity and phosphoric acid units. Our Lithuanian plant also produces aluminium fluoride, which is used in the manufacture of aluminium, glass and optics as well as in the tanning industry. Wherever possible, our facilities use phosphate rock from our Kovdorskiy and Kazakhstan mines.


From our Kovdorskiy GOK operations in Russia, we mine magnetite-apatite ore, from which we extract apatite concentrate as well as baddeleyite concentrate and iron ore concentrate. We have been moving closer towards self-sufficiency in phosphate rock with the start-up of our mining facility in Kazakhstan.


Essential to the flow of raw materials and finished goods, our sophisticated and flexible logistics infrastructure comprises rail rolling stock, rail depots, port facilities and wholly-owned transhipment operations as well as a growing network of distribution centers across key markets.

Commited to our customers

Customer needs What we need to do...
Balanced fertilization Multi-nutrient business model
NNitrogen KPotash PPhosphates MMicronutrients
Seasonality of demand
Precision agriculture Global distribution and multi-regional cost competitiveness
Stable/just-in-time suppliers R&D investment into new products and technology (eg. micronutrients, inhibitors, bio-stimulants)
Global presence Global logistics platform
Affordable quality products Access to competitive raw materials/feedstock
  Own capabilities in repair/maintenance, industrial construction, own logistics
  Our vertically integrated business model helps us create a leading agrochemical company

Our sustaining capitals

Our interrelated capitals are the vital components for EuroChem’s continuing success. They combine to create sustainable value through our vertically integrated business model.


Our robust financial structure controls the flow of funds available for our expansion, whether obtained through financing or operations. Coupled with our shareholders’ commitment, it provides us with a substantial supportive base for long-term growth.


We make the fertilizer products needed to increase crop yield. Our production assets and processing facilities, rail and shipping fleet, port facilities and distribution network facilitate the extraction, refining, manufacture and transportation of our products to market.


We build enduring relationships based on trust and actively engage with a range of stakeholders – including suppliers, contractors and other third parties – that meet high standards of compliance, integrity, health and safety.


The individual knowledge, skills and experience of our motivated employees combine to form EuroChem’s reservoir of talent. We are a fast growing multinational company already comprising over 23,400 employees of 34 different nationalities.


We have robust corporate governance, management information, internal control and internal audit systems, as well as extensive knowledge resources that underpin our operations. The challenges of food security are driving our R&D efforts towards advanced specialty products to serve sustainable farming practices. We have been actively expanding our product portfolio with proprietary specialty products and bio-stimulants, engineered to promote the efficiency of fertilizers.


Our natural reserve base comprises high quality reserves of potash, natural gas, phosphate rock and other raw materials used in the manufacture of our products. Wherever we operate, we seek to minimize any adverse impact on the natural environment.

The benefits we generate


By meeting and exceeding their expectations with our products, we help farmers to produce better and more productive crop yields – enabling them to deliver the food, feed and fiber needed to sustain the world’s growing population.


Excellent working relationships with federal, regional and local authorities support our growth plans and help deliver competitive advantage. Partnerships with local government also reinforce our social and community credentials and enhance our reputation.


Our operations generate cash for investment across our business, enabling EuroChem to flourish and grow, delivering long-term financial stability and good returns on investment for our shareholders.

Trade Unions

Strong links with employee groups including trade unions enable us to nurture and maintain mutual respect between management and employees. Ongoing constructive dialogue builds trust and fosters collaborative workplace relationships.


EuroChem provides attractive careers, with competitive pay, safe workplaces, job security and training and development programs for our people. Recognizing and rewarding the talent and effort of our people maximizes their productivity, strengthens their loyalty and increases job satisfaction.


Open communication enables us to promote the value we create, through positive coverage of our operational successes, community investments and proactive approach to health, safety and environmental issues.

Local communities

We actively and enthusiastically support the communities in which we operate, investing in a range of local educational and health facilities that benefit the wider communities in areas where we operate.





Configured for superior returns

Low cost

Currently in lowest quartile delivered cost to all target markets globally with VolgaKaliy projected to provide EuroChem with global cost leadership in potash from 2017/18.

Global production

Large-scale production within easy reach of high quality raw material sources and customers – EuroChem is well-established in Russia and Western/Eastern Europe and seeks to build its presence in Asia and North America.

Competitive feedstock

Secured access to vast high quality natural resources in Russia and Kazakhstan, including hydrocarbons, phosphate rock and potash supported by a superior logistics platform to minimize costs and optimize production.


Once potash is on stream, EuroChem will be one of only four companies globally to have capacity in all three primary nutrients – and the only company globally to have full vertical integration in ammonia, phosphate rock and potash – to meet the requirements for balanced fertilization and diversification considerations.

Industrial construction expertise

In a sector where global demand, supported by the megatrends of a growing global population, reduction of arable land per capita, and changing diets requires the constant addition of new supply. EuroChem’s construction expertise, backed by a solid track-record in large-scale industrial projects, is a competitive advantage.

Global distribution

EuroChem operates a global distribution platform across key markets, with plans to expand in Asia and North America, enabling long-term partnerships between customers and a reliable low-cost supplier who is able to deliver the needed volumes of quality products throughout the year. Global distribution is required on the one hand by the need to combine high capacity load in production with the seasonality of demand, on the other – by the need to have skillful salesforce to place specialty products.

Vertical integration

The depth of EuroChem’s value chain provides it with more investment options and higher returns than its peers. Our vertically integrated model raises returns on investment via synergies with the existing assets while lowering financial and execution risks.

Specialty products

The EuroChem product offering combines low-cost commodity and advanced specialty fertilizer production (slow release, inhibitor-enhanced, etc.) which are an essential and growing part of the product menu on account of environmental regulations and increasing farmer sophistication.

EuroChem’s strategy is focused on all of the above

Oil & Gas

Staying close to our customers

Ozinskiy deposit (Saratov)
Astrakhan Oil and Gas

2015 developments


Start of the construction of new 1MMTpa ammonia plant in Kingisepp, Russia. Expected completion: 2018

Kovdorskiy GOK
EuroChem VolgaKaliy
EuroChem Usolskiy
EuroChem Fertilizers
Novomoskovskiy Azot
Nevinnomysskiy Azot
EuroChem Antwerpen
EuroChem Migao JV
EuroChem Antwerpen Jetty
USA (Tulsa)
USA (Tampa)
Switzerland (Zug)
2015 developments
2015 developments

Total sales (US$)


Customers globally


Number of countries consuming EuroChem products


Total transhipment capacity in Russia (MMT)


Total transhipment capacity in EU (MMT)


Fertilizer sales volume (MMT)


Ben-Trei, USA

Acquisition of Ben-Trei Fertilizers (Tulsa, OK) – a distributor of dry fertilizer and feed products with a strong presence in the country’s key agricultural regions, from Texas and the Louisiana delta in the South, across the Corn Belt in the Midwest and west to California.

R&D, Norway (Oslo)

In December we announced our intention to enter into multi-year marketing, distribution & sales, R&D and equity agreements with Agrinos AS, a global leader in biological crop nutrition products.

Ammonia, Russia

Start of construction of EuroChem Northwest – a 1 MMT pa ammonia plant located in Kingisepp, Russia.


Start of first intra-group deliveries of phosphate rock from Kazakhstan (EuroChem Fertilizers) to EuroChem- Belorechenskie Minudobrenia (EuroChem-BMU), a producer of phosphate and compound fertilizers in southern Russia.

Berezniki, Russia

Acquisition of Berezniki Mechanical Plant (Berezniki), a company specializing in auxiliary mining equipment, including conveyors, shaft support and components, as well as related installation and repair services.

Kovdorskiy GOK, Russia

Start-up of new apatite – staffelite ore processing plant. Once fully operational in 2017, the new processing plant will increase Kovdorskiy’s output by 948 KMT of apatite concentrate and 130 KMT of iron ore concentrate per year.