INNOVATIONS AS IMMUNIZATION AGAINST CRISIS

Mineral fertilizer plants of URALCHEM, OJSC have become the object of close attention of Grigory Rapota, the President’s Special Representative in the Volga Federal District and his Deputy, Aleksey Kubrin – during their official trip to Perm and Kirov Regions. The officials were interested in innovative mineral fertilizer production technologies that Azot, OJSC, Berezniki, Perm Region and MFP KCCW, CJSC, Kirovo-Chepetsk, Kirov Region adopt and apply.

Last week Grigory Rapota, the President’s Special Representative in the Volga Federal District paid an official visit to a number of towns in the Volga Federal District. Within 2 days – on 16 and 17 September, 2009 - Mr. Rapota and his specialized commission – were reviewing the condition of the real sector of economy in the region. The President’s Representative focused on large industrial enterprises owned by corporations, such as LUKOIL and VSMPO-AVISMA Corporation, as well as Azot, OJSC owned by URALCHEM.

It is notable that they have chosen the latter. Mineral fertilizer production is a strategic industry for Russian agriculture and has long since become an object of close interest of the Government and the President of the Russian Federation. URALCHEM Group is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS. That’s why in course of his official trip to Perm Region Grigory Rapota could not but take interest in the innovative production technologies that URALCHEM enterprises have adopted and applied for the last several years. The company applies these technologies to produce unique mineral fertilizers that owing to their special characteristics are able to resolve various problems in terms of the climate and type of soil in the territory where these fertilizers are applied.

Dmitry Mazepin, the Chairman of the Board of Directors of URALCHEM, OJSC accompanied Mr. Rapota in course of his visit to Berezniki and told him about the innovations and the positive developments at Azot. The head of URALCHEM initiated Mr. Rapota into the details of strategy used to develop mineral fertilizer production at Azot, OJSC. Senior managers of the plant held a special meeting to discuss innovations and other issues, such as the steps to maintain sustainable operation of the plant even under recession.

Indeed, even at the height of the crisis Azot felt good. In 2008 Azot ranked 4^th among 23 enterprises in mineral fertilizer production rating in Russia. As compared to the year 2007, in 2008 Azot increased ammonium nitrate production, including porous and stabilized ammonium nitrate, by 5.7 per cent and became the absolute leader among 13 enterprises. The chemical giant in Berezniki became the 8^th largest producer of urea having increased the output of this type of product by 13.2 per cent compared to 2007.

Today, proper development strategy helps the enterprise resist adverse economic conditions. According to Dmitry Mazepin, the Chairman of the Board of Directors this strategy implies development and adoption of new products following the analysis of the market for N products, reduction of costs in order to increase the enterprise’s competitive power and ongoing improvement of quality management system as the principal factor for management as a whole.

In the beginning of 2009 URALCHEM switched over to the products that met sufficient demand during the crisis, such as complex mineral fertilizers. Today, Azot launched the production of a new fertilizer – 80% ammonium nitrate solution. And now, in addition to traditional prilled ammonium nitrate, the enterprise is producing ammonium nitrate solution with various consumer characteristics (ammonium nitrate solution is used by mining enterprises). For URALCHEM, the investment project extended the portfolio of products used to obtain industrial emulsion explosives so that the company could increase the productive capacities by extra 30 thousand tones a year.

After the meeting where current results and prospects for future development of Azot, OJSC were discussed, Grigoriy Rapota and Dmitry Mazepin visited Azot production site and urea warehouse. Then, there was a press conference for media representatives. At the conference, Mr. Rapota told the journalists about his impression from the operation of the enterprise. Mr. Rapota said: "The visit made a very good impression on me. I saw for myself that Azot, OJSC is a growing enterprise. The managers have many real, elaborate and well thought out plans; they are very positive about the future. "

After the official’s speech, Mikhail Markin, the Director of the branch of Uralchem Management Company took the floor and added: "We’ve set our sight on further dynamic growth and fully intend to upgrade production and develop new fertilizer grades to meet demand. Our innovations are the result of specialized development programmes we’ve undertaken to attract young professionals to our company."

Azot, CJSC is not the only enterprise that met high-ranking guests last week. One day later Aleksey Kubrin, the Deputy President’s Special Representative in the Volga Federal District visited MFP KCCW, OJSC in Kirovo-Chepetsk during his official trip to Kirov Region. Dmitry Mazepin, the Head of URALCHEM, OJSC accompanied Mr. Rapota during the trip and told him about the steps that had recently been taken in order to modernize the production and adopt innovative technologies. This official trip was a good reason to hold a meeting with senior managers of MFP KCCW, CJSC and URALCHEM, OJSC and representatives from regional administration, Federal Service for Supervision of Natural Resources and Russian Federal Service for Ecological, Technical and Atomic Supervision.

Participants of the Meeting discussed innovations and such important issued as protection of the environment. All participants of the meeting noted the company’s achievements in this area. At the press conference following the meeting Mr. Kubrin said: "In meeting with senior managers of Uralchem Management Company, I have seen that they are aware of the necessity to expand production, modernize the facilities and protect the environment and, furthermore, are able to find efficient solutions.” Sergey Shcherchkov, Deputy Head of Kirov Region Government added: "Of course we’re interested in stability at the plant. We already see specific improvements in environmental activities at the plant: there are lower emissions, and more money - 650 million roubles – has been spent on ecological issues. This is a serious amount of oney, which places it at second place with regards to such expenses in the Russian mineral fertilizer industry.”