PhosAgro receives SPIC 2.0 approval
The Interdepartmental Commission for the Conclusion, Amendment, and Termination of Special Investment Contracts for Industries approved the application of Apatit (part of PhosAgro Group) for the conclusion of a special investment contract (SPIC 2.0) for the development project of the Balakovo branch of Apatit.
“We welcome the positive decision of the commission to conclude, amend and terminate the special investment contract. This tool encourages businesses to introduce modern technologies in the industry, create high-tech jobs, and products that are competitive on the world market, and increase the base for tax payments. We have already seen the effectiveness of investment promotion tools, using the example of the Volkhov branch of Apatit. Here, in 2022, SPIC 2.0 was concluded. And today, the enterprise, built using the best available technologies, is reaching its design capacity, strengthening its leading position in the domestic mineral fertilizer industry. I’m sure that the development of the Balakovo cluster of the SPIK Group 2.0 will be just as important. The enterprise will be able to take advantage of investment incentives following the Russian and the Saratov region legislation,” commented Mikhail Rybnikov, CEO of PhosAgro.
Mikhail Rybnikov added that the successful implementation of investment projects within the framework of the corporate Strategy-2025 has already allowed the Balakovo enterprise to increase the efficiency and complexity of processing mineral raw materials, expand the range and ensure the growth of production volumes.
As part of the 2nd stage of the strategic development of the Balakovo production complex, a phosphoric acid warehouse has already been built in 2022, work has been completed on the technical re-equipment of two technological systems with the transfer to the production of granulated ammonium sulfate with a capacity of 360 thousand tons per year – a unique brand of fertilizers produced in Russia only in Balakovo. A warehouse for finished products was built for the storage and packaging of granulated ammonium sulfate. By the end of 2023, it’s planned to complete the modernization of the production of monocalcium phosphate (a feed additive for livestock and poultry, which is not produced anywhere else in Russia) with an increase in line capacity by 53 thousand tons per year. Besides, the technical re-equipment of one of the sulfuric acid plants is in the active stage, the productivity of which will be increased by 40%.
“Last year, the implementation of the final third stage of the Strategy-2025 for the development of the Balakovo Chemical Complex began, which provides for an increase in the gross volume of production of mineral fertilizers with the creation of a flexible production facility for the production of mineral fertilizers,” added PhosAgro CEO Mikhail Rybnikov, recalling that, in terms of implemented technical solutions using the best available technologies, and clarifying the range of finished products, taking into account market conditions, PhosAgro previously decided to revise and enlarge the investment project for the development of the Balakovo enterprise. Financing increased from 15.6 to 27 billion rubles (from $173 to almost $300 million), of which 18 billion rubles (almost $200 million) are now subject to SPIC 2.0.
In particular, over the period of SPIC 2.0, which is 15 years, the company plans to increase the total volume of fertilizer production in Balakovo by more than 8 million tons (about 30% annually from the current production level of 2.3 million tons).
According to the statement of Mikhail Rybnikov, the production lines being created in Balakovo will be primarily focused on meeting the growing needs of Russian farmers. PhosAgro intends to maintain its status as the leading supplier of mineral fertilizers to domestic agricultural producers. This task will be supported not only by the development of production capacities but also by the expansion of the company’s logistics infrastructure, which ensures the accumulation, storage, and delivery of mineral fertilizers to agricultural producers.
For example, at the beginning of 2023, the number of PhosAgro-Region’s own distribution centers increased to 33, and the one-time storage capacity exceeded 800 thousand tons (together with partner sites – over 1.2 million tons).
Currently, a series of projects are being implemented to modernize existing and build new logistics complexes in the Central, Southern, and Volga Federal Districts. In mid-2023, PhosAgro-Region plans to launch its own distribution center in the Saratov region. The presence in the region of a modern and convenient logistics service will ensure the possibility of early accumulation of products in the region and their prompt delivery to farmland during the fieldwork.
