This segment of the Group’s operations includes distribution networks in Russia (Agronova) and China (Yong Sheng Feng) and the wholly-owned trading companies Agronova Europe AG and Agronova International Inc.
Operating Results for the Segment
Agronova comprises 14 specialised trading companies that provide direct access to consumers in major farming regions of the country. Agronova’s subdivisions store, sell and deliver mineral fertilisers. The distribution network has total storage capacity of 169,000 t.
In 2014, the Group sold its products to 60 regions of Russia. Total shipments were 1.366 mn t, up 7% year-on-year. This increase is mainly due to high demand for calcium carbonate by Russian industrial companies. Acron Group has begun supplying significant volumes of apatite concentrate to Russian consumers. In 2014, the Group sold 687,000 t of mineral fertilisers (including low-density and technical-grade ammonium nitrate), down 17% year-on-year. This decrease was due to lower output at Dorogobuzh, which performed a scheduled overhaul. Sales of all brands of ammonium nitrate decreased 24%, while sales of NPK were up 9%. According to the Russian Association of Fertiliser Producers, at year-end the Group accounted for 12% of AN and 20% of NPK (all brands) sold in the Russian market.
China (Yong Sheng Feng)
Yong Sheng Feng (YSF) focuses on wholesaling fertilisers produced by Acron Group and independent producers. The Company sells fertilisers both through retailers operating under the YSF trade mark and through a network of distributors.
In 2014, YSF’s sales in the Chinese domestic market were up 8% to 179,000 t. By offering quality fertilisers via an extended sales network, the Company was able to sustain dynamic sales in the highly competitive Chinese market. In 2014, YSF continued its expansion into the market in southern China, increasing sales through a distribution network in Guangdong and Hainan provinces. YSF introduced several measures to improve storage conditions and logistics operations in China.
Trading companies (Agronova Europe AG and Agronova International Inc.) handle marketing, distribution and sea transportation of the Group’s export fertilisers. In the reporting year, Agronova Europe AG and Agronova International Inc. posted aggregate sales of 3.5 mn t (up 6% year-on-year).
Key results by Sales Market
The Group’s export strategy aims at achieving a diversified sales geography and increasing the product range; the priority focus areas include increasing supplies to emerging markets and making direct sales to local distributors.
China and Thailand remain key markets for the Group’s complex fertilisers in Asia. Traditionally, Acron Group has been a leading NPK supplier to these markets. In 2014, the Group’s share in Chinese NPK imports was 26%. Acron also has a leading position in Thailand. The Group has strengthened its presence in the promising markets of Indonesia and Myanmar. In 2014, Acron was the major NPK exporter to Myanmar. The Group sells its products to Asia on DAP terms, which maximises the return on sales and maintains control over distribution channels.
United States and Canada
The Group increased its sales of liquid nitrogen fertilisers to the United States and Canada year-on-year. Acron continues to expand a direct cooperation with American and Canadian importers and distributors. The Group’s share in total U.S. UAN imports is approximately 28%.
The Group supplied a record high volume of nitrogen-based and complex fertilisers to Latin America in the reporting year. The Group is increasing its presence by introducing new NPK brands in Ecuador, Columbia and several other countries with promising markets. Brazil remains the region’s key market. Shipments of nitrogen-based fertilisers and complex fertilisers to Brazil, where Acron Group is known to be a reliable partner and supplier of high-quality products, were up in 2014. The Brazilian agricultural market continues to grow every year, and demand for the Group’s products increases accordingly.
In 2014, the African markets were more volatile than the previous year. However, the Group continues shipments of complex fertilisers to the markets of West Africa and East Africa. Various NPK brands are still the Group’s key products in this region.
Europe is the Group’s second most important UAN market and a very important urea market. In 2014, Acron strengthened its position in the region, executing new long-term contracts to supply agricultural grade urea and AdBlue grade urea. The United Kingdom, Ireland and Finland are the largest consumers of dry blends.
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