Strategic objectives

EuroChem’s fundamental goal is to deliver value to its shareholders and other stakeholders, including customers, employees and our wider social environment. We aim to succeed through the delivery of two key objectives over the next five years:

1

Become a top-five global player by volume and profitability in all three fertilizer market segments – nitrogen, phosphate and potash.
Objective 1

Reaching the top five in all three key fertilizer groups will require us to boost our capacity in nitrogen and phosphate through buy or build initiatives, as well as start our own production of potash in 2013. We are well under way to achieving this, having acquired the licenses to begin developing two major potash deposits in Russia – Gremyachinskoe in the Volgograd region and parts of Verkhnekamskoe near Perm.

We believe that having a presence in all three markets unlocks great value for us. The prices of our products and the raw materials needed to make them can be very volatile, which poses a risk to cash flow. By spreading that risk over all three main product groups, we can increase our equity and debt capacity, which in turn allows us to maintain the flexibility to take advantage of attractive investment opportunities when they arise.

2

Maintain and increase our cost advantage over our competition through vertical integration and investment in efficiency improvements.
Objective 2

In the mineral fertilizer industry, competitiveness mainly depends on the cost of delivering products to key markets. Our cost advantage is due largely to our vertically integrated business model: in other words, the ownership and control we have over the means of manufacturing and distributing our products. This is particularly beneficial in a market such as Russia, with a relatively undeveloped competitive environment for industrial and transport services. By integrating more of these services into our business, we can maintain and increase our cost advantage.

We continually monitor the cost competitiveness of all our products, and manage our product portfolio so that we focus most of our energy on those products that are most competitive and where our cost advantage can be maintained or enhanced.