Our strategy

We have a fundamental long-term growth strategy that requires us to sustain and develop our vertically integrated business, from raw materials to production and distribution. While economic success is a key measure, we also recognise that to sustain this in the long-term we must maintain the highest levels of employee relations, safety, environmental stewardship and community engagement.

Economic sustainability

To promote and support sustainable agriculture

There is a balance to be struck in meeting the nutritional needs of a rapidly growing global population, while enhancing and maintaining the long-term viability of soils and groundwater through use of the most environmentally benign fertilizer materials. This is a key challenge for EuroChem.

To invest in new technologies, value-added products and vertical integration

Over the past three years we have invested in research and production innovations that allow us to meet the market demand for highly effective materials that are also environmentally benign. Our continued investments mean that our products have minimal impact during production and as products out in the market. To further enhance our ability to control and improve our sustainability performance, we are investing downstream and upstream to create an effective, vertically integrated business with global reach.

To ensure financial stability and shareholder returns

The fertilizer industry can be highly volatile due to variations in raw material availability and prices alongside changes in customer requirements. Our vertically integrated structure helps us to manage this volatility, allied with our management and financial systems. A measure of the strength of our business and sustainability strategy is our revenue performance and growth plus our ability to invest judiciously in increasing production, distribution and sales capacity.

To meet and exceed our customers’ expectations

We are close to our customers, working through 25 agrocentres that provide access to our products and a comprehensive advisory service on how they are best used. We consistently meet our customers’ quality, quantity and timing needs and monitor our interaction to ensure that this is maintained. We also welcome and listen to their concerns and suggestions on how we can improve our service and develop new products and applications to meet changing market needs.

To maintain excellent working relationships with all of our suppliers

While we are a demanding customer, our suppliers know exactly what is expected of them and what they can expect from us. Our relationships are built on clear and relevant contracts, compliance and transparency.

Environmental stewardship

To reduce our environmental footprint

We aim to minimise our impact on the environment through the operation of effective management systems and processes that are aligned with leading international standards. In 2013 we refined our health, safety and environmental management systems to reflect the growth in our business and the latest advances in this area.

Social responsibility

Our human resources management strategy focuses on personal and professional development, as reflected in our programme of education for young professionals, ‘E-Generation: leaders of the new industrialisation of Russia’. We invested RUB 33m in the programme in 2013.

To ensure that employees operate in the safest and healthiest working environment

While our management system complies with international standards, we are aiming to become an exemplar of health and safety excellence by 2018. Our success will be measured by the levels of accidents and incidents, changing safety behaviour and the general health and wellbeing of employees. The first steps have been taken in redesigning our health, safety and environmental management systems and their effectiveness will be closely monitored and improved over the next four years.

To maintain excellent working relationships with government agencies and local authorities

As a growing international business, EuroChem engages with central and local government agencies and officials in many places and at many levels. In 2013, for example, we worked closely with the Government of Kazakhstan on the large scale development of our Kok-Djon phosphate rock deposit. We were also pleased that our open and collaborative approach resulted in HElCOM (Baltic Marine Environment protection Commission – Helsinki Commission) acknowledging that our Phosphorit plant was not contributing to high pollution levels in the Baltic Sea.

To support and invest in local communities adjacent to our key operational sites

We make a significant contribution to the economic development of many communities through our tax payments, employment opportunities, social investments and infrastructure. For example, in 2013, our Lifosa plant in Lithuania celebrated its fiftieth anniversary by funding and building a multi-sports and events arena, which has attracted teams and audiences from the local area and further afield.

Our sustainability strategy in action

Strategic goals

2013 outcomes

Economic

Promote and support sustainable agriculture

Opened EuroChem Agro in Shenzhen, China

Ensured that all products complied with the Responsible Care standard

Continued to operate and develop the E-Generation education programme

Invest in new technologies, products and vertical integration

Progress made with the development of VolgaKaliy and Usolskiy Potash deposits

Started development of the Kok-Djon deposit in Kazakhstan

Announced the intention to explore the possibility of building an ammonia and urea plant in Louisiana, USA Announced the intention to establish a joint venture with Migao Corporation in Yunnan, China to produce NK and NPK

Ensure financial stability and
shareholder returns

Increased revenues by 6%

Accessed US$1.3bn unsecured debt facility

Fitch and S&P confirmed our stable and positive credit rating

Meet and exceed customer expectations

Maintained our network of agricentres

Expanded our sales network with launch of EuroChem Agro Shenzhen

Continued to invest in our logistics and distribution network

Maintain excellent working relationships with suppliers

Developed relationships with suppliers who maintain best international quality and environmental standards

Environment

Reduce our environmental footprint

Targeted environmental protection expenditure

Continual reduction of air emissions, effluents and waste per tonne of production within statutory frameworks and production modernisation

Social

Recruit and retain motivated employees

Increased the number of permanent employees by 1% (over 2012)

Create a safe and healthy
working environment

Implementation of a new policy and action plan to become a HSE exemplar by 2018 through culture, management systems and compliance

Fewer work-related incidents compared to 2012

Maintain excellent working relationships
with government

Opened new sports arenas in Russia and Lithuania in conjunction with federal and
regional administrations

Started development of the Kok-Djon deposit with the support of the national government of Kazakhstan

Support and invest in local communities

Increased community investments by 40% (over 2012)