PhosAgro Starts Implementation of new Fertilizer Production and Energy Plant Project at Metachem
Volkhov, Leningrad region – PhosAgro (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers has launched a project to build a new, modern phosphate-based fertilizer production facility and energy plant at its Metachem production site.
Alexander Drozdenko, Governor of the Leningrad region, Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade for Russia, and Andrey Guryev, CEO of PhosAgro, took part in the presentation of construction plans for the production and energy complex and the launch ceremony.
Total investments in the project, which PhosAgro will finance with own and borrowed funds, is estimated at RUB 23 billion. The project is due to be completed by 2023.
The project includes the construction of a sulphuric acid production unit with a capacity of 800 ths tonnes per year, a fertilizer production line (including for water-soluble DAP), liquid ammonia storage, a finished product storage warehouse, a 25 MW heat energy generation unit and an overhaul of the extraction phosphoric acid production unit, which will increase output capacity to 500 ths tonnes per year.
PhosAgro CEO Andrei Guryev said: “this project is one of the key elements of PhosAgro’s strategy to 2025. In essence, this is an entire new factory that will increase PhosAgro’s total phosphate rock processing capacity by 1 million tonnes per year (currently Metachem processes 300 thousand tonnes) as well as increasing the production of phosphate-based fertilizers that achieve high margins due to Metachem’s logistical advantages.
“For PhosAgro as a whole, fertilizer production growth will be more than 7%, while phosphate-based fertilizer output will increase by almost 10%, rising by 630 ths tonnes compared to 2018. Metachem’s output of commercial products such as fertilizers, as well as phosphoric and sulfuric acid will increase by 5 times, creating more than 200 new jobs.”
At nameplate capacity, Metachem’s mineral fertilizer production will exceed 840 thousand tonnes per year. This will include the production of MAP, NPK and water-soluble fertilizers used in high-tech agricultural plants for drip irrigation, hydroponics and greenhouse production.
The investment project will utilise best available techniques, as well as solutions from leading Russian and global companies and institutions, including the Y. V. Samoilov Research Institute for Fertilizers and Insectofungicides (NIUIF), which is the only of its kind in Russia and one of the leading agrochemical R&D institutes in Europe. Construction will be carried out by Russian contractors.
The new production facilities will fully comply with the strictest Russian and European environmental legislation. After Metachem became part of PhosAgro in 2012, its environmental safety has gradually increased and its impact on the environment has decreased. Since July 2018, a closed water circulation system has been in successful operation, collecting and purifying all industrial storm water, which is then used in production. The next step is to build a modern chemical water-treatment system. As part of the investment project, there will be a transition to the use of environmentally friendly raw materials such as liquid ammonia.
Integration of the fertilizer production facility with a 25 MW power plant, which utilises high-tech water vapor generation, will significantly reduce the specific energy consumption per tonne of product. This will improve the energy efficiency, resource conservation, environmental impact and productivity of PhosAgro’s Volkhov production site.
In addition to the increased production of fertilizers for PhosAgro’s priority Russian and export markets, increased tax payments will provide the regional budget with additional funding for the development of the region's infrastructure and related industries.
State Secretary and Deputy Minister of Industry and Trade for Russia Victor Evtukhov said: "the new investment project is fully consistent with the long-term development strategy for the chemical and petrochemical industry in Russia, to modernise existing production facilities and build ones using best available techniques. This project aims to strengthen food security in Russia and increase the competitiveness of domestic fertilizer producers in export markets with high value-added products."
Leningrad region Governor Alexander Drozdenko said: “PhosAgro is one of the region’s strategic partners, and its decision to implement another investment project in the Volkhovskiy district indicates that the Regional Government has created conditions that are attractive to investors.
“For Volkhov, PhosAgro is becoming a key employer and taxpayer, creating new high-tech jobs. At the same time, the successful experience of the Company in the Leningrad region is a signal to our potential partners that it is no coincidence that we lead the investment rating in Russia and are ready to work with world-class companies.”
PhosAgro CEO Andrey Guryev thanked the Russian Ministry of Industry and Trade for their support in the development of competitive high-tech industries, and thanked the Governor of the Leningrad region for strengthening the region's favourable investment climate, supporting projects to improve the competitive advantages of Russian companies in export markets and ensuring national food security.