Almaz Group participated in the Golden Autumn 2019 exhibition

Almaz Group participated in the Golden Autumn 2019 exhibition
07 October 2019

By 2024, the export potential of the Russian agro-industrial complex should grow up to $ 45 billion. Agricultural producers will need to put unused arable land into circulation and increase the yield of the main export-oriented crops - grains and oilseeds, which cannot be achieved without increasing soil fertility.

At the Golden Autumn 2019 exhibition, Russian Ministry of Agriculture announced its plan to gradually increase the purchase and use of mineral fertilizers. "We are focusing on the figure of 8 million tons and we hope that this is the figure that will be sufficient to bring Russia to the level of productivity of major crops among the leading countries of the world," Roman Nekrasov, Director of the Department of Crop Production, Mechanization, Chemization and Plant Protection of Russian Ministry of Agriculture said to the exhibition participants.

At the same time, as noted in the Russian Association of Fertilizer Producers, mineral fertilizer producers are implementing large-scale investment programs to develop infrastructure for storage and transshipment of fertilizers in the regions from Kaliningrad to Petropavlovsk-Kamchatsky, investing billions of rubles. Currently, the capacity of one-time storage of the warehouse infrastructure of mineral fertilizers is about 1.5 million tons and continues to increase. This ensures the off-season accumulation of fertilizers and meeting the need for them in the period of seasonal demand.

According to Russian Ministry of Agriculture, at the beginning of October, our country has already purchased 3.1 million tons of fertilizers, by the end of the year this figure should reach 3.3 million tons (in terms of 100 % of nutrients).

In horticulture, water-soluble fertilizers (WSF) are considered to be the most effective. However, Russian manufacturers of water-soluble fertilizers face several problems when selling their products on the domestic market. In particular, the market now is in a situation where it is more profitable for traders to sell foreign products at inflated prices that directly depend on the exchange rate. It is more convenient for the big agroholdings to buy from an intermediary because they have a wider range of products. Choosing from which supplier to buy fertilizers, agricultural producers, of course, look at the price in the first place.

"But the main criterion for the selection is the reliability of the supplier. If earlier there were no problems with it, then even with a difference of 10 rubles per ton, they will choose a reliable one. As for who is more profitable for farmers to work with – a manufacturer or a distributor –we must understand that large plants will not sign contracts for small batches of 2–3 tons with greenhouses; they will transfer the communication to their sales representative or regional distribution platform," said Nikolai Kapustinsky, a representative of Floralife fertilizer trading company.

Farms buy small amounts of fertilizers from regional distribution centers and cooperate directly with producers.

"Before the procurement season, we negotiate with plants for the production of mineral fertilizers, negotiate discounts, although it is not always profitable for the manufacturer. This year we brought to the regional government a proposal to provide subsidies to those plants with which farmers' associations have signed agreements on supplies. This will help to compensate for the difference in selling prices," said Vasily Lopatin, Chairman of the Council of the Association of Peasant (Farmer) Enterprises and Agricultural Cooperatives of the Stavropol Region.

Often downright counterfeit products are sold under the guise of fertilizers by trusted distributors. Therefore, there is a lack of confidence in the quality of domestic fertilizers on the part of end-users. Although, according to agrochemists, phosphorus fertilizers from Russian manufacturers meet and sometimes exceed the most stringent European requirements in terms of their purity.

"We have a high potential for the use of phosphorus fertilizers, pure from heavy metals, because we use high quality raw material — apatite concentrate," said Mikhail Ovcharenko, President of the National Agrochemical Union.

The hydrometallurgical plant (GMZ, Lermontov city, Stavropol Region), which is a part of Almaz Group, specializes in the production of phosphoric water-soluble fertilizers. The company produces about 60 thousand tons of water-soluble fertilizers per year, their share in the product line is already 65 %. The hydrometallurgical plant produces four types of 100% water-soluble fertilizers: monoammonium phosphate (MAP), diammonium phosphate (DAP), monopotassium phosphate (MKP) and potassium sulphate (SOP).

The plant is the only MKP manufacturer in Russia, which gives it a competitive advantage in the domestic market of mineral fertilizers. Water-soluble fertilizers are sold exclusively through the Cashmere Capital trading house.

"There is now a significant amount of water-soluble fertilizers imported from abroad on the Russian market," says Edward Gurary, CCO of Cashmere Capital. "Often this is a low-quality product that can harm the health of consumers of farm products. Not all foreign brands of water-soluble fertilizers are like this. But those that meet all the quality criteria are significantly more expensive than the products of Russian manufacturers."

According to Edward Gurary, GMZ was the first Russian producer of fertilizers and for more than half a century has accumulated a significant base of scientific knowledge for the production of high-quality water-soluble fertilizers.

"We have our own laboratory to conduct all necessary examinations of our products. We are confident in the quality, so we suggest to those farmers who have not yet decided on the choice of water-soluble fertilizers, not to rush, but to approach this issue carefully, having carried out all the necessary examinations," he stressed. "Cashmere Capital sells products at affordable prices and is ready to organize the delivery of goods promptly within three to four days in the domestic market. We are interested in increasing supplies to the domestic market, as we see its potential for growth."

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