In 2006 EuroChem produced 6 million tonnes of fertilizers, the same level as in the previous year
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28.02.07 12:00
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Nitrogen fertilizers
The output of ammonia – a raw material for nitrogen fertilizers – was 2.6 million tonnes in 2006. A slight decrease (down 2.5%) from the level of 2005 was caused by the largest in Nevinnomyssk history ammonia facility upgrade which resulted in the scheduled facility shutdown. After the upgrade, the facility production capacity grew to 1,700 tonnes of ammonia per day at a minimum gas consumption rate per tonne of ammonia (the best performance among peer companies of the former Soviet Union). Meanwhile, the ammonia facility upgrade at Novomoskovsk in 2005 resulted in ammonia output growth in 2006.
The total output of nitrogen fertilizers was 3.8 million tonnes in 2006 (98% of the level of 2005). The total output of ammonium nitrate was 2.1 million tonnes (92% of 2005); urea – 1.7 million tonnes (up 3.4% from the level of 2005). This growth was due to the upgrade of two urea facilities at Novomoskovsky Azot in 2005, which resulted in output growth. As a result of shipment optimization at Novomoskovsky Azot after the purchase of 180 tanks, the UAN output was up 10% at 1.1 million tonnes.
Phosphate fertilizers
The consolidated output of phosphate fertilizers was up 2.1% at 1.7 million tonnes in 2006.
The output of apatite concentrate – a raw material for phosphate fertilizers – was 2 million tonnes, or 102% of the level of 2005. The output of sulphuric acid was 2.3 million tonnes (monohydrate), or 97% of the level of 2005. A certain reduction in sulphuric acid output in 2006 versus 2005 resulted from the decommissioning of worn-out facilities at Phosphorit and Novomoskovsk. Meanwhile, the output of phosphoric acid grew 6% to 881,000 tonnes.
The output of ammophos – one of the core phosphate fertilizers - was 134% of the level of the previous year at 671,000 tonnes. This prominent growth was caused by the scheduled reduction in sulphoammophos production at Phosphorit. This product was produced on the same line with ammophos. The reduction was due to market conditions. The output of diammonium phosphate grew to 829,000 tonnes (109% of the level of 2005). In addition to DAP production growth at Lifosa AB, Belorechensk enterprise started its production in 2006.
Compound fertiizers
The output of compound fertilizers was 402,000 tonnes (95%) due to upgrades at production sites.
Other products
The output of feed phosphates (feed additives for cattle farming) was almost the same as in 2005 at 263,000 tonnes (99%).
The organics sector showed a stable performance. The consolidated output of methanol was 551,000 tonnes (107.8% of the level of 2005). Nevinnomyssky Azot – a sole producer of acetic acid in Russia – produced 161,000 tonnes or 96% of the level of 2005, due to the planned maintenance shutdown. The output of methyl acetate increased by 5.4% to 10,000 tonnes; butyl acetate – to 20,000 tonnes (110%).
The output of iron-ore concentrate was 5.6 million tonnes in 2006 (97% of 2005). A slight output drop resulted from changes which had taken place in the Russian iron-ore concentrate market. The company has already found new markets, and monthly outputs have exceeded the level of 2006. The output of baddeleyite concentrate – a unique zirconium containing material – grew 12% to 7,500 tonnes.
Sales market structure
The sales market structure did not undergo critical changes in 2006: the focus remained on the same core markets - Russia, CIS, Europe, the USA and Latin America. The company shipped 75% of mineral fertilizers, almost 100% of organic products and 95% of mineral raw materials to its priority markets. In 2006 the company supplied mineral fertilizers to over 70 different countries of the world. The sales volume growth in the US – the largest market for UAN solution (850,000 tonnes) was achieved by 10% output growth in UAN production. There was an almost two-fold increase in shipments of ammonium nitrate to Brazil at premium price (from 78,000 tonnes in 2005 to 155,000 tonnes in 2006) as a result of duty-free preferential position of EuroChem. A 34% increase in ammophos production resulted in the significant sales volume growth in Belarus, Russia and Brazil. In addition to own product sales, EuroChem was active on the third parties' product trading, cooperating with enterprises of Russia (Kemerovo Azot, Voskresenskie Mineralniye Udobrenia (VMU)), Ukraine (Concern Stirol, Odesskiy Priportovy Zavod, etc.) and Belarus (Grodno Azot).