Wednesday, 24 February 2010 08:05
EuroChem OJSC
GENERAL DIRECTOR: Dmitry Strezhnev
OPERATIONS: Manufacturing of mineral fertilizers
ESTABLISHED: 2001
EMPLOYEES: 21 800
REVENUE: USD 4,5 billion
www.eurochem.ru
EuroChem is the largest manufacturer of mineral fertilizers in Russia. It is a company recognized worldwide ranking among top three European and top ten world leaders in the sector. EuroChem is the only chemical company in Russia which incorporates mining and processing enterprises along with logistics companies and well developed distribution network in various regions of the globe. Such multifaceted structure gives the company a number of advantages on the internal and external markets.
Written by Elena Rozhko
When the statistics speak for themselves
Today EuroChem is a rapidly developing company with turnover of 4,5 billion dollars and estimated output volume of 24 million tones of mineral fertilizers. The company employs 21,800 people. EuroChem has adopted a expansion strategy to the year 2012 which predicts an investment of 3.2 billion dollars in the enhancement of production and the construction of new facilities in order to increase manufacturing capacities. Being one of the world’s top ten producers of mineral fertilizers the company is striving to be among the top five. To achieve the desired result the company constantly optimizes its value chain by ensuring access to low-cost recourses, expanding the product portfolio and increasing production efficiency. EuroChem is a customer oriented company. Its main business principles are product and management quality as well as consumer demand satisfaction. EuroChem strives to become the major European producer of mineral fertilizers as well as of a wide range of agrochemical services of high quality, company’s interest include constant technological improvement in the plants and the improvement of living conditions around the facilities. One of the key factors in the development of EuroChem is its complex structure which enables the company to accomplish its goals. Currently EuroChem Holding owns 7 manufacturing plants (5 manufacturers of fertilizers and 2 mining plants) based in Russia and Lithuania with repair service companies in each region; a distribution network in Russia, Ukraine, Belarus as well as sales companies in Switzerland and the USA; 3 transshipping companies and 2 logistics business units, scientific center for industrial design and development. Such structure enables the company to minimize the costs of production and transportation of raw material in order to achieve the desired competitive capacity in the Russian market and abroad.
Growth in difficult economic conditions
For EuroChem the word “growth” addresses two aspects of the company’s function. Firstly, mineral fertilizers stimulate growth of different farm plants from which such things as food, fibers or artificial fuels are produced. Secondly, growth is a characteristic feature of the company’s business development strategies, constant growth and development are EuroChem’s main goals. It is hard to maintain growth in the unfavorable economic conditions of the recession. By the end of 2008 the economic crises had spread to different spheres of economy. However, EuroChem has been able to take the necessary steps in order to maintain growth of the enterprise in such unfavorable conditions thanks to the developed strategy. EuroChem’s financial sustainability has been verified by independent rating agencies: in 2008, both Fitch and Standard & Poor’s upgraded EuroChem’s credit rating to BB and in 2009 the rating was confirmed.
Production range
EuroChem manufactures over one hundred of certified high quality products. The company’s production portfolio includes nitrogen and phosphate fertilizers, complex fertilizers, feed phosphates and acids, organic synthesis products, raw materials and others. Production of nitrogen and phosphate fertilizers is predominant. EuroChem ranks sixth in the world according to production capacity of phosphate fertilizers and seventh according to the production capacity of nitrogen fertilizers. Among nitrogen fertilizers major products are urea, ammonium nitrate, calcium ammonium nitrate, UAN solution. As for phosphate fertilizers such key products as monoammonium phosphate, diammonium phosphate should be mentioned. Moreover EuroChem produces a wide range of complex fertilizers containing nitrogen, phosphate and potash elements. Presently the company is working on expanding its production range in potash fertilizers. EuroChem has obtained a license for mining of two major deposits of potash salts in Russia, according to the plans the production of potash fertilizer should begin in 2013. EuroChem exports its products to more than 70 countries all over the world. The key markets for the company are Asia with 29% consumption of all exported products, Russia and CIS with 25%, Europe with 21%, America with 23%. Hence a well developed marketing network is of utmost importance to EuroChem.
International certifications and recognitions
EuroChem’s integrated management system received certification under the international standards ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The received certifications indicate that the company meets high international standards in terms of production quality, employee health and safety regulations and its environmental protection initiatives. The company began implementing the integrated management system in 2005 which over the years lead to significant improvements in quality of production, industrial safety and environmental impact. In 2007 Standard & Poor’s upgraded EuroChem’s corporate governance score (CGS) to ‘CGS-6+’ on the international scale. Such corporate governance score reflects the level of a company’s corporate management system conformance to international standards.
Social Responsibility
Social responsibility of EuroChem is first of all its impact on the development of the agrochemical industry and agriculture in Russia, its contribution to the well being of the employees and their families, its involvement in socio-economic and infrastructural development of 6 regions in Russia in which the company operates. All EuroChem’s plants are so called “town forming” enterprises – it is a soviet term, which was used to define a plant that was responsible for the establishment of a town around it. Town forming enterprise supported schools and kindergartens, medical and cultural centers, it built houses and roads, it was the main employer and taxpayer. The Soviet period fell into oblivion but the plants maintained their roles. EuroChem keeps subsidizing the towns that formed around its plants. The companies financial contributions can be compared with the governmental investments. The social policy of the company is based on several principles. The company’s priority is the support of sport and a healthy lifestyle, education and science as well as sustainable development of the territories where the company operates. EuroChem is constantly working on increasing the effectiveness of social support and social investments, achieving real effects from the development of the territory and the strengthening of corporate reputation. Effective technologies and models of social investment are being implemented. EuroChem believes that in order to sustain favorable social conditions in the towns the company needs to provide its employees with stable working environment and good salary because people are the foundation of the company’s activity.
Ecological impact
Ecological policy is considered one of the most important aspects of company’s activities. EuroChem strives to improve environmental protection measures, ensure industrial safety in the production facilities as well as occupational safety of the employees. In order to manage the ecological risks effectively EuroChem invests in the implementation of new technologies at the enterprises which ensures that the natural resources are used economically and minimizes the amount of the energy consumed by the plants. The new technologies are introduced to enable water recirculation during production. As a result of all the measures taken by the company air pollution emission is reduced every year despite the production growth.
Future plans and aspirations
EuroChem is constantly striving to enlarge its production capacity. The company makes continuously attempts to expand its resource base in the three major segments of production: phosphorous, potash and nitrogen segments. The company supplies its phosphorous production factories with raw materials from the Kovdor deposit, and is currently in the process of obtaining licenses to develop phosphate deposits in Kazakhstan. EuroChem is also expanding its own logistics infrastructure, as well as a distribution network both in Russia and abroad. As for potash supplies EuroChem had won the rights to two mines in Russia. In the year 2013 the company will become the fourth world producer of all the components for mineral fertilizers – nitrogen, phosphorus and potassium. Over the past several years, EuroChem has established the best fertilizer distribution system in Russia. The company strives not only to grow market share; its comprehensive agrochemical consulting services are aimed to help customers improve yield. Over the next five years, EuroChem plans to double the number of its distribution centers in Russia and the CIS.
