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GMZ conquers the market and increases production capacity

GMZ conquers the market and increases production capacity

GMZ conquers the market and increases production capacity
November 2019

After resumption of production, your company actively participates in prestigious Russian and international exhibitions and conferences of fertilizer producers. How do your fellow manufacturers and consumers react to your return?

Everyone knows that nature abhors vacuum, and a year of downtime of one of the leaders of the world market of high-quality water-soluble fertilizers, of course, forced our regular customers to find other suppliers. The more honorable and interesting was the work of resuming cooperation with them. Today we are proud to say that we have managed not only to win back almost all the old customers, but also to find many new. How did we achieve this? This work included several stages. First, we had to tell the market that we are back and ready to work with customers. We very actively promoted our products at exhibitions, shared plans for the development of the company, strongly convinced everyone that we are present in this market seriously and for a long time. Then, having received the first orders, we, rigorously carrying out them, strengthen trust of buyers. And now, a year after the relaunch, we are happy to see that our customers are ready to work with us not only because they believe in the production technology and quality of the product, but also because they believe in our team. They understand that people who are focused on the production of high-quality fertilizers, on the development of the enterprise, have taken over.

– Who are the new clients you've found? Are there many of them? – The number is pretty good. For obvious reasons, I can't name the companies, but if we talk about regions, for example, we have started to actively increase our presence in the United States. The turning point came this year after the annual IFA
Fertilizer conference in Montreal. I met with a dozen of American customers, presented them our products, told them about the enterprise, and after evaluating our samples, it became clear to them that Almaz Fertilizers water-soluble product line is of excellent quality. We have already started supplying several major customers with our diammonium phosphate. It is now used in the United States in a variety of industries: textiles, food processing, ceramic industries.

– The American market is, of course, great, but what is the situation with water-soluble fertilizers in our Russian market? And why, in your opinion, do we still have a low proportion of water-soluble fertilizers? – This is a difficult question that cannot be answered in a few words. First, granulated fertilizers have historically been produced by the largest Russian producers – the giants of the industry. This product comes to the market by millions of tons, its release has become a tradition, as well as the ground application of this type of fertilizer by farmers. As for water-soluble fertilizers, this is a high-tech, new, modern product, its implementation takes time. I would say that now the manufacturers of water-soluble fertilizers fully meet the demand of customers in Russia and there is no shortage of these products. In absolute terms, the volumes of water-soluble fertilizers sold are, of course, poor in comparison with granulated ones, but this situation has natural reasons – the weak development of technologies for applying such fertilizers and the disposition of the consumer who is used to working with granules. And, as a consequence of these two factors, the market is not ready for large volumes. There is also a shortage of agronomists with experience and modern competencies, and often the lack of necessary experience for those who make decisions on technological charts of fertilization. Now in Russia, products such as monopotassium phosphate (MKP) or potassium sulphate (SOP), as a rule, are used mainly by greenhouses for protected ground. For greenhouse operators such qualities as complete solubility of fertilizers in water are of key importance, since the slightest sediment makes capillary irrigation systems unusable, as well as the absence of impurities of harmful heavy metals. In this sense, Almaz Fertilizers products not only meet all the requirements, but even exceed them.

– By which means was it possible to achieve a high degree of purity of your fertilizers? – The reason for our success is in the unique technologies of fertilizer production. Our factory in the city of Lermontov historically began to produce water-soluble fertilizers quite a long time ago, and therefore has accumulated a deep theoretical and research base for the production of the highest quality product. Convinced of the success of our MKP, in August 2019 we doubled its production capacity and will now produce about 20 thousand tons of this product per year. We consciously decided to increase the volume of MKP production, because we are the only domestic manufacturer of the fully complete line of phosphorous water-soluble monoproducts – monoammonium phosphate (MAP), monopotassium phosphate (MKP), diammonium phosphate (DAP), as well as potassium sulphate. Apart from us, only one of our partners produces MAP in Russia, but it is focused exclusively on exports. We are ready to efficiently work in the domestic market, because we believe that it has growth potential. I'm ready to prove it in numbers. If earlier the export of MKP of Almaz Fertilizers represented about 80–90 % of the total sales structure, now this proportion is shifting towards the domestic market. That is, the consumer begins to understand the superiority and convenience of working with a domestic manufacturer.

– Do water-soluble fertilizers have any advantages for open field use? – The advantages are the same for both protected ground and open field. This is a significant increase in the nutrient use efficiency while maintaining soil fertility, as well as reducing water consumption, which is very critical in regions with its deficit, and the world as a whole. The most obvious example is African countries. The use of water-soluble fertilizers can feed an entire continent, and this is an objective reality. However, I will make a reservation, it is extremely important to use those water-soluble fertilizers that are environmentally friendly, without harmful impurities. Then farmers will not only increase their yields, but also will preserve the health of consumers of their products in the straight sense of the word. Our technologies allow us to produce unique clean and environmentally friendly fertilizers that are ideal for agricultural producers who value their final product. As Adam Smith said, people like to have more money than less, so of course the consumer is drawn to cheapness. We see a significant volume of imports from some foreign manufacturers, whose products, unfortunately, contain a large proportion of undesirable impurities, which is very dangerous for the health of the consumer of farm products.

– How do farmers recognize that the water-soluble fertilizers they are going to use are of poor quality? – There are absolutely objective methods of assessing the presence of harmful substances. To do this, laboratory samples are taken and the composition of a particular water-soluble fertilizer is analyzed. It is extremely important to make such an analysis and choose those fertilizers that do not contain impurities. Each farm manager must understand the share of the cost of fertilizers in the total production costs. According to our information, this share ranges from 6 to 10 %. Buying fertilizers with guaranteed purity instead of cheap, but low-quality goods may slightly affect the price of vegetables or fruits produced by them, but it gives the business owners the opportunity to be proud of what they sell.

– Are you ready to offer a laboratory examination of your product in the same way? – Of course, we even have our own laboratory for that. We are completely open and ready for tests – if you want, do it with us, if you don't want – do it in third-party laboratories. We are confident in our competence and readiness to offer our services. There are several world manufacturers of water-soluble fertilizers that can come close, but in any case, cannot be compared with us in terms of purity and quality. However, they are located abroad and will be expensive for domestic consumers, and you will have to wait for a long time to get the product. Delivery of our products will be cheaper due to the absence of import duties and logistics costs. In addition, we can arrange prompt delivery within three to four days. The product of interest to our customers is almost always in stock and ready for shipment. I urge the Russian buyer to make a balanced and dispassionate choice when analyzing the available offers.

– Now the Russian Ministry of Agriculture has set a task for farmers to increase the export potential of products by expanding the area for grain and oilseeds and increasing soil fertility. Naturally, it is unlikely to increase fertility without the use of fertilizers. Do you somehow cooperate with the Ministry on the promotion of your products on the Russian market? – We have repeatedly met with representatives of the Ministry of Agriculture and are actively involved in the implementation of the Ministry's plans to protect consumers from unscrupulous suppliers of fertilizers. It is obvious that very strict criteria for the admission of products to the local market will be introduced, and this work is now in progress. In addition, we are considering joining the initiative to use the "green" labeling of fertilizers, which will actually highlight those products that contain a minimum amount of harmful impurities or is free of them. We welcome such ideas because they are caused by the concern for the health of our country's citizens.

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