Distribution

OVERVIEW

We have been growing together with our customers. Our Distribution assets are there to help farmers across the CIS improve crop yields. Rather than simply providing fertilizers, we provide a full range of advisory services to help promote better crop nutrient balance. We have established a distribution network of 25 distribution centres in Russia of which six are owned by the Group.

We also own a distribution company with four distribution outlets in Ukraine, while sales in Belarus are supported by a local representative office. In addition to providing advisory services to local farmers and promoting the efficient use of fertilizers to increase yields, the distribution centres offer third-party seed and crop protection products and soil analysis services as well as EuroChem fertilizer products.

Our distribution network is an important part of our strategy as it provides us with a resilient foothold in one of our home markets while providing us with substantial revenue in the same currency as a good part of our operating costs.

MARKETS

We mainly distribute in Russia, where we sold 1.3 MMT of fertilizers in 2013, the most among our peers. Following the collapse of the Soviet Union, fertilizer application in the Russian agriculture sector plummeted by an estimated 90%. While consumption has since shown signs of recovery, application levels nonetheless remain lower than in other such markets. As a result, Russia has been one of the world’s fastest growing large agricultural markets. For us at EuroChem our task is to further contribute to this recovery by promoting intelligent fertilizer use for efficient and effective agriculture.

In Russia we focus on the Black Earth Region, which spreads across the Caucasian, Southern, Volga and Central Federal Districts, and accounts for around three quarters of all fertilizer used in the country. In terms of tonnes of nutrients sold we had a 22% market share in Russia for the 12 months ended 31 December 2013.

AGRICULTURAL ADVISORY SERVICES

In addition to fertilizers, seeds, and crop protection services, we provide farmers with consulting and soil analysis services to help them increase production yields. What we offer:

  • Compound fertilizers
  • Crop protection products from the world’s leading brands
  • Reputable seeds and water-soluble fertilizers
  • Advanced fertilizer application systems
  • Agricultural service (storage, delivery and packaging services)
  • Best practice references in agricultural production
  • Tailored approach to each customer
  • Soil analysis and field mapping
  • Quality service.

STRATEGY

To sell yields, not just fertilizers. Our strategy is to help farmers understand the importance of fertilizers and how to properly evaluate the application patterns required for their soil and crop.

MARKET SHARE PER MAIN PRODUCT IN KEY RUSSIAN AGRICULTURAL DISTRICTS1

6532-EuroChem-AR13_Front_HR-391 Company estimates

1 Company estimates