MOSCOW, May 30, 2018 /PRNewswire/ --
During the St Petersburg International Economic Forum (SPIEF)
Andrey Guryev, PhosAgro's CEO, President of the Russian Association
of Fertilizer Producers (RAFP) and Vice President of the
International Fertilizer Association (IFA) for Eastern Europe and Central Asia, took part in the Russia-France
Business Dialogue panel discussion attended by the Russian and
French Presidents Vladimir Putin and
Emmanuel Macron.
The panel, focusing on issues of and prospects for bilateral
cooperation, included speeches by representatives of the two
nations' business communities, government bodies and civil
society.
Commenting on the Russia-France
business dialogue in the domain of agriculture and application of
mineral fertilizers, PhosAgro CEO and RAFP President, Andrey Guryev, noted: "The phosphate-based
fertilizers produced in Russia
(with PhosAgro leading the charge in the domestic market) are of
exceptionally high quality and environmental purity.
"While many manufacturers of fertilizers that are far less
eco-friendly enjoy free access to the European market, Europe continues imposing a 6.5% customs duty
on the pure products originating from Russia, with the European consumers being the
ones who pay with their health and money for artificial
restrictions on imports of the Russian clean fertilizers.
"We are happy to see that Europe has recently launched a public
discussion on the contamination of soils, agricultural products and
foods with toxic heavy metals such as cadmium and arsenic. Indeed,
today this is a global challenge to human health and preservation
of the environment for the future generations. This topic is of
particular significance to France,
the leading agricultural producer in the EU and the largest
importer of phosphate fertilizers.
"France is uniquely positioned
to lead the EU by example if it chooses to limit its use to
eco-friendly phosphate fertilizers with a low content of harmful
impurities. Russia will gladly
help its long-term partner to put healthy food on the French tables
by ramping up the volumes and expanding the range of exported green
phosphate fertilizers. In its turn, France just needs to take charge when it comes
to putting a cap on fertilizers with dangerous heavy metals and
other impurities in Europe, as
well as set in motion the cancellation of the EU's 6.5% duty on
Russian imports of phosphate fertilizers," said Andrey Guryev,
PhosAgro's CEO.
Another important avenue for cooperation between Russia and France is the banking sector. Over the past
few years, French banks have been actively providing financing for
the Russian corporations and their foreign subsidiaries.
PhosAgro has been a long-term partner of several French banks.
For example, Societe Generale acted as PhosAgro's lender and lead
arranger of a USD 250 m pre-export
loan that the Company raised in June
2016 and has since fully repaid. The bank also worked with
PhosAgro in 2017-2018 on its second and third Eurobond issues, of
USD 500 m each.
Andrey Guryev also spoke at the Russia-Japan Business Dialogue
that took place at SPIEF.
The two countries are expected to further their economic
partnership when it comes to developing projects and fostering
cooperation between Russian and Japanese businesses. The
Russia-Japan Business Dialogue panel discussion at SPIEF 2018 was
attended by Russian President Vladimir
Putin and Japanese Prime Minister Shinzo Abe and touched on the achievements and
current challenges in the relations between the two countries, as
well as on new business opportunities and prospects.
Vladimir Putin, said: "Japan is
undoubtedly one of our key partners in the Asia-Pacific Region, but
not just in Asia. We would like to
take our relations to the global level. We took a keen interest in
Japanese Prime Minister Abe's initiatives on developing
Russian-Japanese relations in eight priority fields, and have
already proposed an 80-project plan on its basis. Some of these
projects have already kicked off."
In his speech, Prime Minister Shinzo
Abe, said, "Together, Japanese and Russian companies can
implement many projects that will greatly benefit our nations, I am
sure of that. I have no doubt that it will lead us towards a bright
future. I hope this business dialogue becomes a productive forum
for a better tomorrow."
Andrey Guryev, PhosAgro's CEO, shared the experience of
long-standing cooperation between PhosAgro Group and Japan's industrial corporations and financial
institutions. Russian and Japanese companies can use it in various
aspects of their business, such as the implementation of
state-of-the-art technology.
"Our cooperation dates back 40 years, to the construction of the
first large-scale ammonia plant in Cherepovets using the
technologies of the Japanese Toyo Engineering Corporation," he
said. "Five years ago, here at SPIEF, we signed a contract with an
international consortium led by Mitsubishi Heavy Industries for
construction of a new, highly advanced ammonia plant, which
produces 760 kt of the product that we use to manufacture
fertilizers. The capital investments in the Cherepovets capacities
(including the new ammonia plant) exceeded RUB 65 billion.
"These funds were in part sourced using Japanese project
financing, as we became perhaps the only Russian public company to
attract a long-term loan of almost USD 500
million directly from JBIC and a consortium of Japanese
banks.
"Thanks to that, we were able to utilise some of the best
technologies in the world to build the most advanced ammonia
facility in Europe, which last
year reached its design capacity."
Praising the quality and effectiveness of cooperation with JBIC,
PhosAgro's CEO Andrey Guryev said
that for large-scale industrial projects to be implemented, there
need to be more institutions like Japan's JBIC and Russia's RDIF.
Shinzo Abe, Japan's Prime Minister, addressed the
questions by the Russian business community and Andrey Guryev in
particular on the Japanese government's plans regarding the most
favoured nation status of Russia,
expressing his gratitude to those who contributed to developing and
strengthening the business ties between Russia and Japan and saying:
"Our governments will continue fostering the business
relationship between the two countries, (...) and we would like
Japan's government to support
Japanese enterprises.
"The financial system is also very important. Last September,
JBIC and the Russian Direct Investment Fund launched and committed
USD 1 bn to a joint investment
vehicle that has already invested in three projects.
"In February 2018, JBIC
collaborated with the Far East Investment and Export Agency and
other organisations to establish a venture for developing and
promoting investment projects. The company will provide support to
the Japanese business when it comes to investing and selecting new
projects.
"Two years ago, Mr Putin and I agreed to expand economic
cooperation between our countries. That decision, coupled with our
willingness to work together, is opening new opportunities and has
already yielded results in the last two years.
"I hope we can explore new avenues for cooperation, and we are
doing everything we can to make it possible. This will remain a
priority for us, so that Japan and
Russia could help each other grow
and build a new society."
Andrey Guryev also took part in televised debates organised by
the RDIF and Rossiya 24, titled 'Investment Breakthrough:
Infrastructure and Technology of the Future'.
During the televised debates, participants noted that
Russia has established an
infrastructure that unites investments from leading sovereign funds
from around the world and leading Russian companies. This makes it
possible to combine best global expertise and practices with unique
opportunities and progressive developments by Russian
companies.
One of the main issues discussed by the participants was the
effect of investments in creating competitive advantages for
companies in the Russian market and abroad.
Over the past five years, PhosAgro has invested RUB 160 billion into its development using best
available technologies. As a result, production volumes during this
period increased by 40%, to a record 8.3 million tonnes, while
labour productivity per employee increased by 2.5 times, which
helped the Company win in a Vedomosti rating.
For the last three years, PhosAgro has achieved annual growth in
fertilizer output of 10%, with a similar trend for phosphate rock
production. This year the Company plans to maintain the same pace
of growth.
Last year, PhosAgro completed a large-scale investment into the
construction of new, high-tech production facilities. PhosAgro's
new ammonia plant is currently the highest-capacity in Russia (760 thousand tonnes per year), as is
the granulated urea line with a capacity of 500 thousand tonnes per
year. Investments in the project exceeded RUB 65 billion. These will enable PhosAgro to
continue to produce phosphate-based fertilizers that are naturally
low in potentially-harmful impurities, helping to support national
and global food security. The new production facilities will also
create significant potential for increasing production capacity and
improving the Company's self-sufficiency in key inputs.
In the next two years, PhosAgro plans to invest at least
RUB 50 billion, which will enable it
to open three new production facilities (sulfuric acid, nitric acid
and ammonium sulfate) at the production complex in Cherepovets by
2020, and to expand the capacity of the third apatite-nepheline
beneficiation plant. PhosAgro is also considering options for the
development of the production complex in Volkhov.
PhosAgro CEO Andrey Guryev said:
"At present, we are working on a long-term strategy for the
development of PhosAgro until 2025, which will be aimed at further
improving efficiency, strengthening the Company's positions in
domestic and foreign markets, increasing shareholder value and
profitability.
"The Company, whose shares have traded on the London Stock
Exchange and Moscow Exchange since 2011, last year conducted its
second SPO in recent years. Shareholders successfully placed 4.5%
of the shares of PhosAgro. RDIF together with five sovereign funds
from China, Kuwait, Qatar, Bahrain and the UAE participated in the SPO,
as well as international investment funds from the UK, continental
Europe and the United States.
"The Company benefited significantly from the SPO with RDIF,
increasing its free float to more than 25%, helping the liquidity
of PhosAgro shares traded on the Moscow Exchange to grow 5-fold.
The company's weighting in the MSCI Russia index also grew, while
the geography and structure of its investors became more
diversified, and the share price broke records.
"RDIF has built an effective mechanism for attracting financing
from foreign sovereign funds to the Russian equity market, and this
contributed to high demand for PhosAgro shares. The order book for
PhosAgro shares was fully subscribed within an hour, becoming
oversubscribed thereafter. The volume of the transaction exceeded
RUB 15 billion.
"We also expanded the Board of Directors of PhosAgro to ten
people from eight, and an absolute majority of those are
independent directors. In addition, through our cooperation with
RDIF, we have gained invaluable insight into communication with and
decision making by sovereign funds.
"I believe that RDIF provides a certain assurance of quality.
Trust in Russia, inspired by this
fund, is extremely unique."
Responding to a question from the moderator about the
possibility of an investment breakthrough, Andrey Guryev noted that
"an investment breakthrough is not only possible and inevitable,
but we have already entered this investment cycle, investing about
USD 500 million annually into
production development."
About PhosAgro
PhosAgro (http://www.phosagro.ru) is one of the world's
leading vertically integrated phosphate-based fertilizer producers
in terms of production volumes of phosphate-based fertilizers and
high-grade phosphate rock with a P2O5 content
of not less than 39% (according to IFA, Fertecon and CRU).
PhosAgro's main products include phosphate rock, over 35 grades
of fertilizers, feed phosphates, ammonia, and sodium
tripolyphosphate, which are used by customers in 100 countries
spanning all of the world's inhabited continents. The Company's
priority markets outside of Russia
and the CIS are Latin America,
Europe and Asia.
PhosAgro's shares are traded on the Moscow Exchange, and global
depositary receipts ("GDRs") for shares trade on the London Stock
Exchange (under the ticker PHOR). Since 1
June 2016, the Company's GDRs have been included in the MSCI
Russia and MSCI Emerging Markets indexes.
SOURCE PhosAgro