Flexible Business Model


PhosAgro’s ability to produce MAP, DAP, NPK and NPS on the same production lines, combined with
our flexible sales and marketing strategy, enables the Company to achieve high utilisation rates at its production facilities andoptimise netback prices. Selling prices less selling costs

While some of our peers are only capable of producing aparticular type of fertiliser, PhosAgro benefits from the flexibility to respond easily and quickly to changing market environment and demand conditions by switching its phosphate-basedfertiliser production capacities between DAP, MAP, NPK and NPS.

We distribute our products outside Russia principally through large andwell-known independent traders and distributors.

Fertiliser utilization rates and price ratio

As PhosAgro does not operate its own distributionplatform outside Russia and is therefore not tied to any particular export market, we are able to sell our products based on the best netback price that we can obtain for our products.

We have additional operational and sales flexibility due to PhosAgro’s excess phosphate rock production capacity over the demand from its subsidiaries. Therefore, we can either use all the phosphate rock extracted to produce fertilisers, or we can sell more phosphate rock externally and reduce the amount of fertilisers produced, particularly when fertiliser prices are low relative to phosphate rock prices.

As a resultof this flexible sales strategy, supported by asimilarly flexible production model, we have been able tomaintain autilisation rate at our fertiliser production facilities of over 90% during the past several years.

PhosAgro production capacities *, mln t

* production capacities as of December 31, 2011
Source: PhosAgro
PhosAgro DAP/MAP/NPK/NPS capacities, mln t

PhosAgro NPK capacities, mln t