3 A dynamic business delivering sustainable growth

Main strategic objectives

1. Build and launch own potash production
   Potash is one of our highest-priority keys to growth. Over the next decade we currently plan to launch two separate projects, each in two phases, with a total planned production capacity of 8.0 MMT p.a. The first phase of our Gremyachinskoe project, with a 2.3 MMT p.a. capacity, is on track to produce our first potash in late 2013.
2. Targeted approach to M&A
   Our financial standing makes us well positioned to act on interesting M&A opportunities, as they arise.

1. Improve existing production efficiency
   Between 2006 and 2010, we invested over USD 583m into increasing efficiency. During that time, we reduced electricity consumption per tonne of finished product by an average of 13% and gas expenditures at our Novomoskovskiy and Nevinnomysskiy ammonia plants by 3% and 5% respectively. Efficiency improvements have also helped reduce our environmental impact.
2. Add new capacity for higher-value/lower gas content products
   In the last two years, we have added new production capacity in CAN and granular urea. We are on track to launch our new melamine production line in 2011, and are reviewing projects like LDAN. As we ramp up our own potash production and achieve production in all three nutrient groups, we also plan to increase our NPK capacity.
3. Enhance distribution in core markets
   We already have a strong foothold in Russia and Ukraine, with our own network of distribution centres selling EuroChem fertilizers, third-party crop protection products and consulting services. These have helped us achieve a 22.4% market share in Russia and a 13.9% share throughout the CIS.
4. Improve logistics
   We will soon launch the Tuapse transhipment terminal with a 3.0 MMT p.a. capacity on the Black Sea, in close proximity to our Nevinnomyskiy Azot nitrogen plant and to the future production site of our Gremyachinskoe potash deposit. Our logistics within Russia are optimized as we operate our own rail stock and repair depot. On the Baltic Sea, we have also announced investments in a new transhipment terminal at Ust-Luga.
5. Improve access to phosphate rock
   Our phosphate plants currently consume slightly more apatite than we are able to supply from Kovdorsky GOK. We plan to secure our growing needs in phosphate rock by developing the Karatau phosphate deposits in Kazakhstan.
6. Own natural gas production
   The cost of natural gas for domestic consumers in Russia is scheduled to rise to European netback levels in the next three to four years, which we do not expect to exceed USD 150 per 1,000 m3 (or 4.6 USD/mmBtu) as compared to the average price of USD 95 per 1,000 m3 (2.9 USD/mmBtu) our plants paid in 2010. One option to hedge against this would be to begin our own natural gas production within Russia to supply a portion of the gas we consume.