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Igor Nechaev, Head of the Logistics Division – A first consideration is that any new capacity comes online gradually and mining operations the size of VolgaKaliy or Usolskiy will typically require two to three years to reach their nameplate annual production capacity. We have constructed trunk lines and stations at both of our sites. At our Usolskiy facility in the Perm region, the majority of the Perm-Ust Luga (Baltic) line is not an issue as it is comprised of multiple routes which together account for approximately half of the country’s rail capacity. The current capacity on that line is around 35-37 million tonnes per year and Russian Railways have announced that this will be raised to 57 million tonnes.
As for VolgaKaliy, with around 600km to our port and our NPK facilities, the transportation issue is not as complex. The capacity in the area is quite enough to accommodate shipments of potash from VolgaKaliy. As well, whether at our Baltic Sea or Black Sea terminals, we plan to have sufficient storage capacity to ensure good rail car turnaround times.
Alexander Tugolukov, Head of the Fertilizers Division – The key input for ammonia is natural gas and while it is fairly abundant in the world, its price and proximity to fertilizer markets varies considerably. Fortunately for EuroChem, our ammonia assets are located in Russia, which is blessed with natural gas. Our cost per mmBtu of gas remains among the lowest in the world. As for distance to market, Russia happens to be the fastest growing large agriculture market in the world. On the export side, our ammonia facilities are strategically located in Western Russia and benefit from our own logistics chain which unlocks inefficiencies and bottlenecks on both the raw material and finished product streams. As well, we look to further improve our competitiveness with the launch of up to 1.0 MMT of new state-of-the-art ammonia capacity in Russia in 2018. This will not only improve our gas to ammonia consumption ratio but also bring us to full self-sufficiency in ammonia production.
Dmitry Strezhnev, Chief Executive Officer – Our initial strategy was rather simple use our cash flow to overhaul equipment and improve the efficiency of our production units. Phase two involved the expansion of our product range to provide us with added stability and resilience throughout the business cycle. This included the launch of granular urea and melamine units and marked the beginning of our path to potash. Accordingly our strategic horizon has grown from five to eight years. Over this period, we will continue working hard to further minimize our environmental footprint across our business. Our potash projects are the major catalysts of our next growth phase and we remain deeply aware of the importance of retaining and attracting key talent. We are driven by growth and it has positioned us to capture the next emerging opportunities in our industry.