Annual Report 2012

Nitrogen fertilisers

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Russia’s 2012 ammonia production by producer*

1 Uralchem 20
2 Eurochem 20
3 Togliattiazot 16
4 Acron 12
5 Minudobreniya (Rossosh) 8
6 Phosagro 8
7 Siberian Business Union 8
8 Other 8

Russia’s 2012 nitrogen fertiliser production by producer*

1 Eurochem 26
2 Uralchem 20
3 Acron 14
4 Phosagro 13
5 Siberian Business Union 8
6 Kuibyshevazot 5
7 Minudobreniya (Rossosh) 5
8 Other 9

*Source: Azotecon-Plus.

Key trends in the nitrogen fertiliser market

108.8 mt

Total consumption of nitrogen fertilisers was up 1.6% in 2012 to 108.8 million tonnes (in terms of nutrient). In H1 2012, the market saw heavy trading on the back of higher prices for agricultural products and positive attitudes of farmers, and fertiliser prices hovered around their historic 2008 highs. Due to interrupted gas supplies in Trinidad, Pakistan and Bangladesh, ammonia and urea output shrank in those countries, further supporting ammonia prices in H2 2012.

Even so, global sales of nitrogen fertilisers were below forecast due to reduced imports from India, Brazil, Western Europe and Pakistan in H2. Another adverse factor was increased export of low-cost urea from China, which exerted significant downward pressure on global nitrogen fertiliser prices in Q4 2012.

2.4 mt

Total output of commercial ammonia and nitrogen fertilisers in 2012 was 2.409 million tonnes (up 7% year-on-year).


800 ktpa

Complex testing commissioning of a new urea unit and 80% increase in urea capacity to 800 ktpa.



Development plans

700 ktpa

Construction of a new 700 ktpa ammonia facility in 2012–2015.


Further expansion of existing UAN capacity from 700 ktpa to 1 mtpa by 2014.

Production performance (‘000 t)

  Ammonia AN Urea UAN
Acron (Veliky Novgorod) 1,170 536 571 689
Dorogobuzh 525 887
Hongri Acron 88
Total 1,783 1,423 571 689
Total commercial output 152 1,323 245 689

Operating performance




Two operating 1,700 tpd ammonia units. In terms of average natural gas consumption (1,070 m3 per tonne), these ammonia units are the most efficient in Russia (according to Scientific Research and Design Institute for Nitrogen Industry and Organic Synthesis Products (GIAP). In 2012, Acron resumed technical upgrades of its ammonia units to further reduce gas consumption (down 18 m3 per tonne year-on-year). 89% of the total ammonia was used to produce fertilisers.

Ammonium nitrate

AN output was up 10% to 536,000 tonnes. Own consumption doubled to 48,000 tonnes due to increased UAN output.


In 2012, urea output was up 25% to 571,000 tonnes due to the complex test commissioning of a new urea unit. 57% of the total urea (326,000 tonnes) was processed by Acron to produce UAN and UFR.

Urea ammonium nitrate

UAN output in the reporting year was up 25% to 689,000 tonnes on the back of increased output of primary commodity urea and expanded rolling stock for UAN transportation.



In 2008, the Group started construction of a new 1,000 tpd urea unit (350 ktpa). The additional capacity was required to both increase commercial urea sales and meet the growing demand for inputs for UAN and UFR production.

Work schedule

2008 – 2009: basic engineering complete, design and specification documents prepared.

2010 – March 2012: construction work, equipment purchased and installed.

Starting April 2012: start-up and commissioning, complex test production regime.

Total project capex: USD 96 million.




In 2012, ammonia output was down 9% to 525,000 tonnes. Dorogobuzh performed a 45 day scheduled overhaul that included restoration and upgrade of certain components and units. As a result, the ammonia unit’s capacity increased to 1,700 tpd. 98% of the total ammonia was used to produce fertilisers.



Ammonium nitrate

AN output was down 4% to 887,000 tonnes due to scheduled maintenance of the ammonia unit; 52,000 tonnes of AN was used to produce dry blended fertilisers.

Hongri Acron



In 2012, ammonia output was down 2% to 88,000 tonnes due to the unit overhaul and equipment replacement. The Group is currently upgrading its ammonia production to increase the run between repairs and reduce product cost. 90% of the total ammonia output was used to produce fertilisers.

2012 AN sales geography

1 South America 35
2 Russia 33
3 Europe 12
4 CIS 10
5 North America 6
6 Africa 2
7 Asia 2

2012 urea sales geography

1 South America 29
2 Europe 27
3 Asia 19
4 Africa 12
5 North America 11
6 Other 2

2012 UAN sales geography

1 The US 76
2 Argentina 14
3 Europe 4
4 Canada 2
5 Other 4



Project to construct a new 700 ktpa ammonia unit at the Acron facility. Construction was approved in 2011. Total budgeted investments of USD 400 m.

Work schedule

  • Basic engineering of ammonia unit, drafting design and specification documents.
  • Selecting of suppliers of major and auxiliary equipment, signing contracts.
  • Preparing of the construction site: geological and geodesic survey complete, technical examination of current structures completed, unused buildings dismantled.


  • Preparation and approval of design and specification documents.
  • Acquisition of required equipment.
  • Construction, equipment and communications installation.
  • Training of personnel.


  • Completion of construction and equipment installation.
  • Start-up and commissioning, reaching the design capacity.

Market overview

H1 2012 saw a favourable pricing environment in the nitrogen fertiliser market. Prices for all nitrogen fertilisers, ammonia, urea, AN and UAN hovered around local highs since 2008. Following a considerable price adjustment in H2 2012, the market has seen a new upswing price trend start to form on the back of 2013 spring sowing. Nitrogen fertiliser consumption for the year was up 1.6% to 108.8 million tonnes (in terms of nutrient). According to the IFA, demand will pick up 1.4% in 2013.

Positive factors driving the market in 2012

US demand drove the market up in H1 2012. Urea exported for the year was up 11% to 6 million tonnes. The ammonia production shutdown in Trinidad, Pakistan and Bangladesh due to interrupted gas supplies was another important factor that positively influenced the supply-demand balance in the sector. The shutdown also bolstered ammonia prices in H2 of the reporting year.

New ammonia and urea units in Algeria and Egypt have reportedly been postponed by 6–9 months, considerably mitigating the excess supply risk and the resulting price abatement in the nitrogen fertiliser market in the coming year.

Negative factors affecting the market in 2012

Global prices for nitrogen fertilisers were pushed down in H2 2012 because of lower urea production costs due to cheaper coal in China and considerable growth in exports. China almost doubled its aggregate urea exports year-on-year to 6.9 million tonnes.

For the most part, global sales of nitrogen fertilisers were below forecasts due to reduced imports in a number of countries: 1% in India and Pakistan, 20% in Brazil and 9% in Western Europe.

Global prices for nitrogen fertilisers (USD/t)

07/01/2010 03/06/2010 04/11/2010 07/04/2011 01/09/2011 02/02/2012 05/07/2012 06/12/2012

.Urea, FOB Baltic Sea.AN, FOB Baltic Sea.UAN, FOB Black Sea

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