MOSCOW, March 20 The Russian fertilizer market has potential for growth, with great prospects for complex and water-soluble fertilizers, as well as the segment of animal feed additives, said Oleg Shiryaev, CEO of EuroChem, in an interview with Kommersant.
“Better use of fertilizers can very quickly lead to an increase in grain production in Russia, and therefore an increase in grain exports. To do this, it is necessary to form a more comprehensive view of agriculture, taking into account an understanding of the needs of all participants in the process: farmers, equipment manufacturers, fertilizer manufacturers, funding organizations, the state,» Shiryaev said, noting that Russia still lags behind world leaders in terms of fertilizer application volumes.
Regarding EuroChem’s production plans, Shiryaev said that the company’s development program provides for increasing production volume by 10 million tons of products by 2030. Currently, the development of potash projects continues.
“We are now completing the construction of Volgakaliy in the Volgograd region, and in 2025 we plan to reach the design capacity of more than 2 million tons of fertilizers. We are modernizing the first stage and building the second stage at the Usolsky potash plant (in the Perm Territory) with a total capacity of 4.7 million tons of fertilizers. This year we will complete the construction of a new production of nitrogen-potassium fertilizers in Nevinnomyssk. In the Leningrad region we continue the construction of a plant for the production of urea and ammonia «EuroChem North-West-2». Last year we delivered all the technological equipment to the site, in the middle of next year «Let's start commissioning. The capacity of the new production is 1.4 million tons of urea and 250 thousand tons of commercial ammonia. The construction of the second stage of the chemical complex in Kazakhstan is entering the active phase,» he specified in an interview with the publication.
The general director noted that the company has recently been investing a lot in the scientific development of complex fertilizers; for this, a year ago it created its own unified research center, which united several research institutes that previously existed in the company.
The amount of funds required to finance the company’s development projects will increase by 20–30% compared to the average level of 2021–2023, mainly these will be own funds, Shiryaev predicts.
“Last year, EuroChem actively repaid debt from the profits of 2021-2022. This year, if we borrow, it will be targeted borrowings to continue investment projects and maintain the working capital of our distribution, since we are forced to replace those that are no longer available banking instruments for own capital. Now EuroChem is increasing investments in large projects, and the volume of necessary funds will increase by 20-30% compared to the average level of 2021-2023. These will be mainly own funds, since we make most of the money earned We invest in maintaining current and developing new production facilities. So if we attract loans, it will be in a limited volume,» Shiryaev explained.
At the same time, funds attracted from the market will come from Russian banks.
“Russian banks remain our reliable partners, and not only in investment projects. The peculiarity of EuroChem is that we have a widely developed global distribution of our own, which requires working capital. And if previously we used international financial instruments to saturate this network , then now they are unavailable, and we are replacing them with equity capital and financing from Russian banks,” Shiryaev told Kommersant.
He especially noted that when implementing projects, the company strives to minimize the impact on the environment.
«For example, last year, when we launched a carbon dioxide capture unit and the production of liquid carbon dioxide at Novomoskovsk Azot, we significantly reduced direct greenhouse gas emissions. Our enterprises operate in a closed water cycle, and we try to use waste heat as much as possible for production electrical and thermal energy,» said the general director of EuroChem.
Shiryaev also noted that EuroChem is actively investing in creating its own personnel reserve, developing educational programs for schoolchildren, students of secondary and higher educational institutions.