Chairman’s statement

2010 marked another year of important milestones at EuroChem. Throughout the year, we continued to pave the way for our strategy to become a top five global fertilizer producer, both by size and profitability.

EuroChem earned a profit of RUB 20.1bn on sales of RUB 97.8bn. EBITDA was at RUB 29.9bn and operating cash flow reached RUB 26.2bn. Such a strong recovery after the sharp fall in 2009 is driven by the fact that the fertilizer sector contributes directly to one of the most fundamental human needs: subsistence. Fertilizer producers play a key part in helping feed the world’s increasing population.

Within the fertilizer sector, EuroChem is also unique. Already one of the leading fertilizer producers globally, we are building potash capacity which should, over time, help us double our profits. No other company of this scale in the sector can boast such potential for purely organic growth. Although this transformation represents significant financial and operational challenges, I am pleased to say that we remain fully on track with our plans. We believe that future demand for potash will allow us to generate ample returns from our investments, and remain committed to both the Gremyachinskoe and Verkhnekamskoe projects.

Potash is perhaps the most important, although far from the only, area where we actively invest. We want to maintain our low cost position in the nitrogen and phosphate markets, and EuroChem’s meaningful investments in its existing plants seek to secure its competitiveness for the longer term. This is the only way for us to complete our ambitious potash investment plans, and fulfill our mission – to help the growing world feed itself.

We recognize the need to develop in a sustainable and responsible manner. Our corporate governance system, modelled on the better practices of international public companies, is already five years old – a significant track record for a ten-year-old company in Russia. EuroChem is committed to the sustainability of the communities and ecosystems where it operates. Since the Company’s founding in 2001, investments have helped decrease atmospheric emissions and effluent discharge per tonne of product by 14% and 39% respectively, while consistently increasing production volumes and lowering costs. We have also invested in our communities and our employees, supporting chemistry education, healthy lifestyles, and sports.

Today, after close to ten years of operating as a company, the outlook for the years ahead is brighter than ever. EuroChem has delivered impressive results in 2010 and the demand outlook is promising. Even more importantly, just as I stated in the end of 2009, the Company is on track to deliver on key strategic projects that are helping us build sustainable, long-term value.