Sector News

PhosAgro outlines strategy through 2025

September 26, 2019
Chemical Value Chain

Get involved in the discussion! Click here to comment on this story

PhosAgro (Moscow), a leading producer of phosphate-based fertilizers, in 2017, two years ahead of schedule, completed a five-year investment program, which raised production capacity from 5.9 million metric tons/year (MMt/y) to 9 MMt/y last year. In 2019, production is expected to reach 9.4–9.5 MMt. PhosAgro was the subject of an initial public offering (IPO) in 2011, and today it is listed on the Moscow and London stock exchanges with a 26% free float.

At its Capital Markets Day in London on Wednesday, PhosAgro’s top executives announced the next five-year program to 2025, which aims to further expand its production, with focus on key inputs such as sulfuric and nitric acids, as well as ammonium sulfate. In his presentation, Andrey Guryev, CEO, said that by 2025, the company plans to invest around $3 billion in growth and modernization projects, which are expected to boost EBITDA by $450 million, increase free cash flow, and further expand PhosAgro’s self-sufficiency in raw materials.

Under the new program, PhosAgro aims to increase production of fertilizers and feed phosphates by approximately 25% to 11.7 MMt/y by 2025. Production of phosphate rock will rise from 10.5 MMt/y in 2019 to 11.1 MMt/y, of which 8.8 MMt/y will be for internal consumption. PhosAgro owns phosphate rock deposits on the Kola peninsula with the world’s highest nutrient content. Guryev pointed out that the company is a cost leader in the industry, driven by vertical integration. It is 100% self-sufficient in phosphate rock and 90% self-sufficient in ammonia and sulfuric acid.

Sergey Pronin, deputy CEO/sales and marketing, said PhosAgro plans to raise fertilizer sales in its priority domestic market from 2.6 MMt this year to 3.7 MMt/y by 2025, including third-party products. Sales to European markets should rise to 3.1 MMt/y, up from 2.0 MMt/y in 2018, and to North and South America to 3.5 MMt/y, up from 3.1 MMt/y.

PhosAgro says that global demand for phosphate fertilizers is growing faster than supply. It expects a market deficit of up to 2 MMt/y by 2025, following the closure of about 5 MMt/y of capacity in China, the US, and Mexico. Global demand for phosphate fertilizers is expected to rise from 172.5 MMt/y in 2018 to 190.0 MMt/y in 2025, including 6.2 MMt/y of increased demand in PhosAgro’s target markets. Capacity is expected to grow by 15.5 MMt/y through 2025, compared with the 17.5 MMt/y growth in demand.

According to Fertecon (London), the Agribusiness Intelligence unit of IHS Markit, PhosAgro is Europe’s largest producer of phosphate fertilizers and the world’s largest producer of high-grade phosphate rock. It is also the world’s largest producer of monoammonium and diammonium phosphate outside China and is Russia’s only producer of feed monocalcium phosphate and nepheline concentrate. At the London presentation, PhosAgro provided analysts and investors with detailed plans for its main production sites.

A longer version of the article will appear in the Chemical Week magazine.

By Natasha Alperowicz

Source: Chemical Week

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 18, 2019

Aramco IPO values company at $1.62–1.72 trillion

Chemical Value Chain

LinkedIn Twitter FacebookSaudi Aramco on Sunday said it will list a 1.5% stake, or 3 billion shares, on the Tadawul (Riyadh) stock exchange in its initial public offering (IPO). The […]

November 15, 2019

The new era of sustainable supply chains

Chemical Value Chain

LinkedIn Twitter FacebookTo improve sustainability, materials manufacturers are welcoming new digital technologies and process innovations into their global supply chains From palm oil to plastics, the global supply chains of […]

November 14, 2019

Current chems recycling not enough to make significant dent in oil demand – IEA

Chemical Value Chain

LinkedIn Twitter FacebookChemicals recycling technologies that would pave the way for petrochemicals to avoid crude oil as feedstock are still not sufficient to drag down overall demand in coming decades, […]

Subscribe to our Weekly Newsletter

We're easy to reach