Strategy

02

We are focused on strengthening our position as a global leader and enhancing overall
value for our shareholders.

PhosAgro has a focused business strategy that is aimed at further expansion of our downstream production, while extracting even greater value from our unique apatite-nepheline ore. This is supported by flexible production lines and total vertical integration across our key inputs such as phosphate rock, ammonia and electricity.

Our Strategy in Action

Strategic goal: Key Initiatives:
Continue to improve operational flexibility and efficiency Apatit:
Construction of a second main shaft at the Kirovsky Underground Mine to increase underground apatite-nepheline ore mining capacity, which is less expensive than open-pit mining
Balakovo Mineral Fertilisers:
Modernisation of BMF’s facilities to enable production of NPK
Cherepovets production complex:
NPK product diversification following the modernisation of MAP/DAP/NPK production lines

Building a new 32 MW electricity generation facility to increase electricity self-sufficiency
Logistics:
Increasing our own railcar fleet
Increase fertiliser and feed phosphate production capacities and enter higher value markets Commissioning of a new urea production unit with capacity of 500 kt per year at Cherepovets production complex. Construction of the unit is on track for completion in May-June 2012
Expansion of MCP annual production capacity up to 320 kt at BMF depending on market conditions
Reviewing economic and technical feasibility of further expansion of our own downstream processing of MAP/DAP/NPK at PhosAgro production facilities
Conducting a feasibility study to install a new ammonia unit with a total annual capacity of 760 kt
Integrating LLC MetachemFollowing PhosAgro’s purchase of the stake in CJSC Metachem, the company was reincorporated as an LLC as part of PhosAgro’s vertical integration strategy, and thereby entering the industrial phosphates and SOP (sulphate of potash) markets
Utilise the full potential of our ore reserves
Increasing production of nepheline concentrate and developing industrial technology for extraction of rare earth elements from materials derived from apatite concentrate processing at PhosAgro production facilities
Increasing production of aluminium fluoride (AIF₃) by 12 thousand tonnes per year: new capacity expected to come online in 2015
Diversify our product portfolio Expanding our product range with industrial phosphates, including purified phosphoric acids at LLC Metachem
Strengthen vertical integration Pursuing a selective M&A strategy focused on synergies with PhosAgro’s existing asset base