Our young team Taking responsibility SUSTAINABILITY Report 2013 ABOUT US
EuroChem is a leading international mineral fertilizer producer
We continue to invest in international production, logistics and distribution assets in order to help the world grow the food, feed, fibre and fuel needed to sustain a growing population.
We are also investing in our growing team of young professionals, who are vital to our current and future success. While we select employees with a core grounding in technical subjects, we also look for motivated individuals who are willing to challenge the status quo and take responsibility from the outset.
As these young professionals take on more responsibility, they will shape and define the sustainability of EuroChem’s business.
Visit our website www.eurochem.ru Content ee pagesSee 2-29 10 8 2 for the future. plans and achievements sustainability stakeholders, with communications wellas systems, management as strategy, and operations structure, business This section contains information on our Ou 18 16 14 12 28 24 20
Statement by our Chairman by our Statement team young Our Operations map Company Our strategy Our value Creating Our stakeholders Our andGovernance ethics The issues that matter that issues The Defining what is important what Defining r c r ompany s
s ee pagesSee 40-43 Framework. and and Environment Safety PolicyHealth, new our presents section This Heal pagesSee 30-33 education and communities. in operations, investments our describes I strengths. keyeconomic and This section outlines our business goals Ec u onomi st ainabili &safe th c
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Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company our young team ENERGY IN ALL ITS FORMS DRIVES OUR BUSINESS
NAME “From the start, it was clear Imme Coolen that EuroChem Antwerpen is a ROLE Production Manager dynamic, growing environment Fertilizers where colleagues work together WHERE I WORK with passion to create great EuroChem Antwerpen opportunities and achieve goals.” Being an active young team member In 2007, Imme graduated in Chemical Engineering from the University of Leuven. She joined EuroChem in 2012 after six years in project and process engineering posts.
Energy2 EuroChem Sustainability Report 2013 Energy of production. tonne per reducing consumption energy in progress continued our and in Russia plant U of Severneft purchase the 2012our by exemplified is This production. of – tonne reducing per ourconsumption energy efficiency energy on focus to continue and assets in energy investing weare therefore power; of users significant are world the across plants Our www.eurochem.ru/corporate-responsibility more: out Find the day. Three students, four P four students, day. Three the for Antwerpen EuroChem to invited were Moscow, in Olympiad 2013 Chemistry the in competed I St T n September, a team of B of ateam n September, AKING u de n RESPONSIBILI ts
v is t Eu ro T elgian students that had had that students elgian Y Chem rengoy natural gas rengoy gas natural rofessors and local local and rofessors a n twer
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away with a much greater appreciation appreciation greater amuch with away went and in action chemistry seeing appreciated visitors the All managers. key met and plant the of were given a employees tour Olympiad Chemistry of fertilizer production. fertilizer of significant responsibility. significant taking are they where environment in an thrive to investing in their enabling development, them We are professionals. young of cohort growing our by exemplified is possible job best the do to motivation and employees our of energy The 120 125 130 135 (kWh/t) Energy consumptionpertonneofproduction 128.30 2009 129.60 2010 132.90 2011 2012 129.50
2013 125.10
Training courses 18,000 Y > Energy conservation projects conservation Energy T oung team initiatives hree 100 E uroChem Sustainability Report 2013 3 Report Sustainability
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company our young team (CONTINUED) CREATING AND ADOPTING NEW IDEAS
NAME “The development of EuroChem- Mikhail Mikhailenko VolgaKaliy and its associated ROLE L ead SPECIALIST, infrastructure is a unique project Construction Department in Russia. I am really pleased to WHERE I WORK be a part of it and to gain such Eu roChem-VolgaKaliy great experience.”
Successful young team member Mikhail graduated from Volgograd State University of Architecture and Civil Engineering. In 2013 he participated in the Company’s scientific and technical conference and was a winner of the research projects competition at his plant.
New4 EuroChem Sustainability Report 2013 ideas New ideas New pathways through which these ideas can be be can ideas these which through pathways many are There organisation. the outside and within from ideas to open is that company a is EuroChem that testify employees Our to be visual, participatory and engaging. rules, The to be visual, participatory designed was campaign “The Vasiliev, said: Anton Y of Council the of Chairman The through megaphones! slogans broadcast safety of form the in sometimes work, at arrived they when employees with interaction lively and letters comics, of posters, consisted campaign The awareness over campaign the summer of 2013. P Y of Council the example, For employees. all amongst safety occupational Y Our Promot T AKING hosphorit plant developed and delivered an oung Specialists are active in promoting promoting in active are Specialists oung RESPONSIBILI in work g asafe T oung Specialists at our our at Specialists oung Y in oung Specialists, Specialists, oung g e n v i ro
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n t Council of Y of Council the for competition corporate annual the at campaign safety occupational best the as recognised was This key the messages.” remember helpand them colleagues our engage to away as fun and humour appeals to occupational observe rules safety with serious We alternated involved. employee every get to and tools communication of array an through life to this bring to was aim Our employee. each by demonstrated safety production of culture in-built an with supplemented be should controls and regulations improvement projects. enabling to them business develop and present for young professionals tomanagers competitions line with contact ongoing from channelled, oung Specialists. oung across our plants our across N 18 N 12 www.eurochem.ru more: out Find ew processes implemented implemented processes ew ew products launched in 2013 E uroChem Sustainability Report 2013 5 Report Sustainability
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company our young team (CONTINUED) SUSTAINABLE GROWTH FROM VERTICAL INTEGRATION
NAME “B esides my daily work, I am Anna Kholomai also able to pursue research, ROLE C hemical Analysis which has allowed me to Laboratory Assistant, participate in the plant’s scientific Raw Materials and Finished Products Quality Control and technical conferences.” WHERE I WORK N ovomoskovskIY Azot
Young successful team member Anna graduated from Ivanovo State Chemical and Technical University, specialising in Applied Chemistry of Inorganic Matter. She participates in research activities and came third in the plant’s 2013 scientific and technical conference.
6Ambition EuroChem Sustainability Report 2013 ny >100 p a com
Presence in over r
100 countries Ou y 2% t bili
of the world’s production a (in nutrient content) of fertilizers in sta u
used in agriculture s c i om n co E y Engaging with the international ‘CSR & Sustainability in extractive and energy 7.8 % t
extractive and energy industries industries: UK Global Expertise’. EuroChem was market share in Europe bili a
In 2013, EuroChem’s approach to corporate featured as a best practice case study, particularly in for its community partnerships and investment in
responsibility and reporting was highlighted sta at a workshop organised by Vostock Capital, education and sport. u l s l ta n me n
Our ambition is sustainable growth built on This will support our global sales and i ro vertical integration, including raw materials distribution network in more than 100 countries, v 13% En extraction (minerals and natural gas), production, which today accounts for 2% of the world’s logistics and distribution. We therefore own and production (in nutrient content) of mineral market share in CIS operate mines, wells, factories, refineries, storage, fertilizers used in agriculture – and 7.8% rail assets, trucks, ports and ships in Russia, market share in Europe. Lithuania and Belgium. This international portfolio continues to grow with investments in production y and transport capacity in Europe, Asia and North America. Source: Company data, CRU, Fertecon, IFA.
th & safet l ea H y t ibili s o n p l res l a i S oc o n i format in rther Fu
Ambition EuroChem Sustainability Report 2013 7 statement by our chairman
Our aim is to build and grow a business that is While we select employees with a core grounding sustainable in the long term. in technical subjects, we also look for energetic individuals who are willing to challenge the status While the fundamental driver of our business quo and take responsibility from the outset. is the continued global need for food, our long As a consequence, we have expanded our term success will be built on our ability to create ‘E-generation’ programme that is enhancing best in class products and get them to our the teaching of chemistry and engineering in customers in the most efficient and effective schools and universities. Our aim is to educate way. Consequently, we are investing in vertical and motivate those young people who will drive integration through a global network of assets our business in the future. This process does encompassing raw materials, energy, production, not stop when they join us as young professionals; research, logistics, distribution and sales. we provide career opportunities and significant responsibility so that they can influence the Our business strategy is therefore underpinned long term sustainability of the business. by sustainability, expressed in our approach to financial health and equity, the welfare of people within and outside the company, resource efficiency, environmental neutrality and our ability to recruit and retain young professionals.
Find out more in the Chairman’s and Chief Executive Officer’s statements on pages 18 to 21 of our 2013 Annual Report.
“Y oung people are critical to our success as a sustainable business.”
NAME A ndrey Melnichenko ROLE N on-executive Chairman
1,300 young engineers recruited since 2003
134 engineers recruited in 2013
8 EuroChem Sustainability Report 2013 01 02 03 04
NAME: Olga Voitova NAME: Dmitry Cherepanov NAME: Geert De Schutter NAME: Natalia Kantogina ny p a ROLE: LEAD SPECIALIST, ROLE: MINING ENGINEER, ROLE: FOREMAN TECHNIQUE, ROLE: Engineer, RESEARCH GROUP
TRAINING CENTRE ENGINEERING SUPERVISION REPAIR WORKSHOP OF TECHNOLOGICAL PROCESS com DEPARTMENT r WHERE I WORK: EuroChem-BMU WHERE I WORK: EuroChem WHERE I WORK: NevinnomysskIY Ou WHERE I WORK: EUROCHEM- Antwerpen Azot MY VIEW: “The main thing is to be USOLSKIY POTASH versatile in the day-to-day working MY VIEW: “On joining the Company MY VIEW: “My work is crucial to MY VIEW: “I am very proud of what environment, while seeing the bigger I was welcomed by a group of maintaining the quality of ammonia I do and of playing a part in the picture and understanding that friendly, driven people. I feel we have and associated products. I have ambitious potassium project.” personal progression is linked to the a great team, who all want to achieve great responsibility and link my success of the Company.” Story: Dmitry found his job the same goals in order that contribution to the success of the y t advertised online and submitted EuroChem Antwerpen can keep plant as well as the Company as Story: Olga graduated from the bili his resume through the Company’s growing at a steady pace.” a whole.” a South Russian State Technical in website. After a successful interview Story: Story: University. She currently works in Geert graduated with two Natalia is a graduate of sta he became the first Young Specialist u the Administrative Directorate. Olga MScs: in Electromechanical Nevinnomyssk Institute of s c at EuroChem-Usolskiy Potash. i supervises the Council of Young Engineering (2012) and Welding Technology. Natalia was a prize om
Specialists and participates in Engineering (2013). He joined winner in the 2013 plant and n
EuroChem Antwerpen in Company-wide scientific co social activities. E September 2013. conference for young specialists. y t bili a in sta u l s l ta n me n i ro v En y th & safet l ea H y t ibili s o n p l res l a i 02 S oc
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EuroChem Sustainability Report 2013 9 creating value leveraging our strategic advantages to achieve our vision
The consistent implementation of our proven strategy is at the heart of our successful track record.
vision mission Values To be a top five global fertilizer producer by size and profitability. To make a significant Our business is founded > To achieve this we are focusing on contribution to driving on four key values: combining our organic growth potential with a disciplined approach to progress in global agriculture. investment activity and leveraging >Integrity our unique strategic advantages. Our mission is to help >Openness the world grow the food, >Trust feed, fibre, and fuel >Respect needed to sustain our growing population.
We are focused on addressing the issues that matter:
> Population growth > Available land > Changing diets > Soil fertility > Alternative fuels
10 EuroChem Sustainability Report 2013 ve business model. business integrated vertically our via growth long-term We value derive and generate sustainable > Responsibility reach > Global chain > Supply > Production materials > Raw terminals vessels. and transhipment facilities, port well as as depots rail and rolling stock network, distribution centres, repair own have our We also competitiveness. our global underpin efficiency and capacity in production investment our and materials raw lower-cost to access Our chain. value entire throughout the control and margin Capturing Mission rtical inte Ris k manag
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E INT RTICAL Our and investment in efficiency improvements. improvements. efficiency in investment and integration vertical further through advantage cost our increasing while M&A and growth in investment through market the than faster by growing We vision our achieve aim to profitability. and sales player production, by fertilizer global five top a Our strategy is to become > > > targets strategic Our Gove Cost leadership Cost P B
product range product rnanc roximity to customers to roximity GRATI road value-added value-added road strate
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strategy, and developing as g k m ris building that on the growth we have achieved over the governance code. corporate new the of principles the to committed remain and governance effective in record We are developing astrong track > > > > succeed by consistently bysucceed consistently a responsiblea business. ove Our goal is tocontinue past decade.past We will following our proven proven our following Operational risks Operational Reputational risks Reputational risks Financial Strategic risks Strategic E rnanc uroChem anag Sustainability Report 2013 11 Report Sustainability e eme nt
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Our strategy
We have a fundamental long-term growth strategy that requires us to sustain and develop our vertically integrated business, from raw materials to production and distribution. While economic success is a key measure, we also recognise that to sustain this in the long-term we must maintain the highest levels of employee relations, safety, environmental stewardship and community engagement.
Economic sustainability To meet and exceed our To ensure that employees operate in the safest To promote and support sustainable agriculture customers’ expectations and healthiest working environment There is a balance to be struck in meeting the We are close to our customers, working through While our management system complies with nutritional needs of a rapidly growing global 25 agrocentres that provide access to our international standards, we are aiming to become population, while enhancing and maintaining products and a comprehensive advisory service an exemplar of health and safety excellence by the long-term viability of soils and groundwater on how they are best used. We consistently meet 2018. Our success will be measured by the levels through use of the most environmentally benign our customers’ quality, quantity and timing needs of accidents and incidents, changing safety fertilizer materials. This is a key challenge and monitor our interaction to ensure that this behaviour and the general health and wellbeing for EuroChem. is maintained. We also welcome and listen to of employees. The first steps have been taken in their concerns and suggestions on how we can redesigning our health, safety and environmental To invest in new technologies, value-added improve our service and develop new products management systems and their effectiveness will products and vertical integration and applications to meet changing market needs. be closely monitored and improved over the next Over the past three years we have invested in four years. research and production innovations that allow To maintain excellent working relationships us to meet the market demand for highly effective with all of our suppliers To maintain excellent working relationships materials that are also environmentally benign. While we are a demanding customer, our with government agencies and local authorities Our continued investments mean that our suppliers know exactly what is expected of As a growing international business, EuroChem products have minimal impact during production them and what they can expect from us. Our engages with central and local government and as products out in the market. To further relationships are built on clear and relevant agencies and officials in many places and at enhance our ability to control and improve our contracts, compliance and transparency. many levels. In 2013, for example, we worked sustainability performance, we are investing closely with the Government of Kazakhstan on downstream and upstream to create an effective, Environmental stewardship the large scale development of our Kok-Djon vertically integrated business with global reach. To reduce our environmental footprint phosphate rock deposit. We were also pleased We aim to minimise our impact on the that our open and collaborative approach To ensure financial stability and environment through the operation of effective resulted in HELCOM (Baltic Marine Environment shareholder returns management systems and processes that are Protection Commission – Helsinki Commission) The fertilizer industry can be highly volatile due aligned with leading international standards. acknowledging that our Phosphorit plant was to variations in raw material availability and prices In 2013 we refined our health, safety and not contributing to high pollution levels in the alongside changes in customer requirements. environmental management systems to reflect Baltic Sea. Our vertically integrated structure helps us to the growth in our business and the latest manage this volatility, allied with our management advances in this area. To support and invest in local communities and financial systems. A measure of the strength adjacent to our key operational sites of our business and sustainability strategy is our Social responsibility We make a significant contribution to the economic development of many communities revenue performance and growth plus our ability Our human resources management strategy through our tax payments, employment to invest judiciously in increasing production, focuses on personal and professional opportunities, social investments and distribution and sales capacity. development, as reflected in our programme infrastructure. For example, in 2013, our of education for young professionals, Lifosa plant in Lithuania celebrated its fiftieth ‘E-Generation: Leaders of the New anniversary by funding and building a multi-sports Industrialisation of Russia’. We invested and events arena, which has attracted teams and RUB 33m in the programme in 2013. audiences from the local area and further afield.
12 EuroChem Sustainability Report 2013 O Strategic goals Strategic Support and invest in local communities in local invest and Support government with M environment working healthy and asafe Create Recruit and retain motivated employees S footprint environmental our Reduce Environment M with suppliers with M integration vertical and products technologies, in new Invest agriculture P E shareholder returns shareholder E ur sustainability strategy in action in strategy sustainability ur nsure financial and stability conomic romote and support sustainable sustainable support and romote ocial speciality potash fertilizer producer. producer. fertilizer potash speciality with Migao a Corporation, China-based venture ajoint establish to intention its I A j eet and exceed customer expectations exceed customer and eet aintain excellent working relationships relationships working excellent aintain aintain excellent working relationships relationships working excellent aintain n N o ovember 2013, Eurochem announced 2013,ovember announced Eurochem in t ve n t u in C in re h in
a
P L in annum per fertilizers complex of tonnes chloride-free 200,000 to up and nitrate potassium of tonnes 60,000 to up produce will Migao EuroChem rovince, southern China. 2013 outcomes I Kazakhstan of government national the of support the with deposit Kok-Djon the of development Started administrations regional L and in Russia arenas sports new Opened 2012 to compared incidents work-related Fewer compliance and systems management I I modernisation and production frameworks statutory within production of tonne per waste and effluents airemissions, of reduction Continual Targeted environmentalexpenditure protection environmental and quality international maintainbest supplierswho relationships with Developed network distribution and logistics in our invest to Continued Shenzhen Agro EuroChem of launch with network sales our Expanded agricentres of network our Maintained P programme education E-Generation the develop and operate to Continued standard Care Responsible the with complied all products that Ensured in Agro China Shenzhen, EuroChem Opened Fitch and S& and Fitch U Accessed I to produce N produce to U in L plant urea and ammonia buildingan of possibility the explore to intention the Announced in Kazakhstan deposit Kok-Djon the of development Started mplementation of a new policy and action plan to become a HSE exemplar by 2018 through culture, exemplar by 2018 culture, through aHSE become to plan action and policy anew of mplementation ncreased community investments by 40% (over 2012) (over by 40% investments community ncreased ncreased the number of permanent employees by 1% (over 2012) by 1% (over employees permanent of number the ncreased ncreased revenues by 6% rogress made with the development of VolgaKaliy and U and VolgaKaliy of development the with made rogress SA Announced the intention to establish a joint venture with Migao Corporation in Y Corporation Migao with venture ajoint establish to intention the Announced S$1.3bn unsecuredS$1.3bn debt facility K and NP K and confirmed our stable and positive credit rating credit positive and stable our P confirmed standards uliang, Y uliang, K unnan unnan ithuania in conjunction with federal and and federal with in conjunction ithuania solskiy potash deposits potash solskiy E uroChem Sustainability Report 2013 13 Report Sustainability
unnan, China China unnan, ouisiana, ouisiana,
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company OUR COMPANY
Our operations and products
EuroChem is Russia’s largest mineral fertilizer producer and is a top ten agrochemical company globally by nutrient capacity. We produce nitrogen, phosphate and potash fertilizers, as well as certain organic synthesis products and iron ore.
EuroChem’s Our corporate strategy is to become a top five Our shareholders global fertilizer producer by profitability and A company that holds business interests global ranking nutrient capacity. We will achieve this through beneficially for Andrey Melnichenko and his family acquisitions and organic growth, particularly ultimately owns 92.2% of EuroChem Group SE, in our potash business, while increasing our cost which owns 87.36% of EuroChem MCC. Dmitry 7.8 % advantage through further vertical integration and Strezhnev, Chief Executive Officer of EuroChem market share in Europe efficiency improvements. MCC, is the beneficiary of the remaining 7.8% of EuroChem Group SE. In 2013, we manufactured 5.0m tonnes of mineral fertilizers (by nutrient). Of this total, 2.8m tonnes Our three main functions are nitrogen-based and over 1.0m tonnes are The company is divided into three main functions: phosphate-based. • Production of nitrogen, phosphate and compound fertilizers, organic synthesis Where we operate products, mineral feedstock and planned Our production and logistics operations are in production of potash fertilizers No 5 Belgium, Estonia, Lithuania, and Russia and in Globally in potash reserves • Sales of our products through distributors and 2013 we started developing mining operations in agricultural centres in Russia, Belarus, Ukraine, (licensed)* Kazakhstan. Also in 2013, we announced plans Switzerland, Germany, Belgium, the USA to investigate production operations in China and and Brazil the USA. We have core administration offices in • Transport and logistics through wholly-owned Brazil, Russia, Switzerland and the USA and sell rail, port and shipping assets. our products in over 100 countries through our *A+B+C1+C2+P1 as per Russian sales centres in China, France, Germany, Greece, reserves classification Italy, Mexico, Singapore, Spain and Turkey. Our business advantages • Ownership of feedstock sources such as phosphates/apatite, gas and potash (planned). • Vertical integration from feedstock through production and logistics, including repair and maintenance and construction. • Production of iron ore concentrate as a by-product of apatite extraction at Kovdorskiy (up to 5.7 MMT of iron ore annually). • Access to competitively priced natural gas in Russia. • Planned potash production with access to Black Sea ports. • Flexibility in production with a comprehensive and developing range, allowing us to maximise margins and respond to market demand.
14 EuroChem Sustainability Report 2013 tolerance to drought, salinity frost, and disease. I protein and synthesis). carbohydrate for are vital lifeand govern that substances chemical (the P nitrate solution ( solution nitrate (CA nitrate ammonium ammonia, urea, ammonium nitrate, calcium N are: groups product core three Our agrochemicalstandards. international and against national and certified tested are products these of producer. All Russian sole the weare which for some including product, fertilizer of 100 types than We more sell O EuroChem is now operating in 102 countries. operating now is EuroChem platform. distribution global a well-established and offering product fertilizer speciality extended an with us have provided acquisitions These portfolio. Russian predominantly our into assets European Western of integration cross-border in 2012 first our Agro marked EuroChem and Antwerpen EuroChem of consolidation The I ✓ O ✓ ✓ ✓ ✓ P points. growing a plant’s form that tissues and cellfor development I energy. of transfer in the akeyrole performs superphosphate. P and Ordinary ( fertilizer Ammonium-phosphate-sulphate (MA phosphate P formation. yield and development of plant processes in all major involved is it proteins, of constituent essential the As growth. plant of ✓ ✓ ✓ ✓
t also improves a plant’s water regime and increases increases and regime water aplant’s improves t also t is essential for photosynthesis and is indispensable is and indispensable photosynthesis for t is essential ntegrated relationships ntegrated otassium activates more than 60 enzymes enzymes 60 than more activates otassium otassium (usually referred to as P as to referred (usually otassium hosphate fertilizers –I fertilizers hosphate itrogen fertilizers –I fertilizers itrogen ur products ur product advantagesur product largest manufacturers largest P Advanced water-solubleAdvanced fertilizers Customised mixed fertilizers mixed Customised precision technology precision through application soil Direct P production processes production and in quality practice best Global Market- and customer-focus Soil analysis and mapping capability mapping and analysis Soil our network of 25 agricultural centres. agricultural 25 of network our through advice application and yield offering – capability services Agrochemical artnerships with the world’s the with artnerships ackaging, storage and delivery capability delivery and storage ackaging, P U ), Diammonium phosphate (DA phosphate Diammonium ), A N ). N ). ncluding anhydrous N ncluding Monoammonium ) and urea-ammonium urea-ammonium ) and itrogen is the motor motor the is itrogen hosphorus hosphorus
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methyl acetate, paint and varnish solvent. varnish and paint acetate, methyl aceticsynthetic acid, alcohol, butanol, polyvinyl methanol, –including products synthesis Organic acids. nitric and sulphuric phosphoric, –including Acids industries. tanning and optics glass-making, aluminiumin used is manufacture, fluoride Aluminium materials. abrasive and refractory B iron. cast I phosphates. feed and acid phosphoric fertilizers, compound phosphate, make to used is concentrate Apatite M ineral raw materials raw ineral shaft 2 at EuroChem VolgaKaliy. Work is is Work VolgaKaliy. EuroChem 2at shaft skip 1and shaft skip shaft, cage the for walls freeze new the build to us allow to established were systems the of all time, same the At 2017. in commence to expected is production and 509m of adepth to sunk been has shaft The years. 25 past the for Russia in sunk be to shaft potash first – the deposit potash Russia’s Verkhnekamskoe U our at sinking I developments. major potash two our with made been has progress Significant w Progress n October 2013 we completed cage shaft shaft cage 2013 completed we n October Production Commodity Commodity P roducts addeleyite powder is used to make make to used is powder addeleyite Continuously Integrated Supply Chain M ron ore concentrate is used to make make to used is concentrate ore ron M solskiy P solskiy i arketing ( arketing Potash th speciality products otash project in in project otash P alue-added Value-added ricing, P Branding, Upgrade Sales Force
ositioning) anagement commenced on developing both sites. both on developing commenced R to total aggregate the R 2013 in was VolgaKaliy U both at expenditure Capital facilities. shipping and loading warehousing, building, process the with made site continues apace with significant progress Construction elsewhereconfiguration. onthe headframe and equipment support surface to finalise shafts skip ongoing at the two Distribution Sales Force and flotation agent (sebacic acid). (sebacic agent flotation and acetone commercial acid, acetic food-grade urea, – products Other ice). (dry dioxide carbon solid dioxide,argon, and nitrogen, carbon oxygen not contain any heavy metals. heavy any contain not do They aviculture. and in husbandry animal supplements environmentally benign fodder phosphatesFeed – NP and –including NP fertilizers Compound include: These products. core our to related materials useful W I ndustrial gases – gases ndustrial e produce a wide range of other other of range awide e produce K universal. E uroChem UB UB 57bn since work work since 57bn including crystallised food-grade including gaseous and liquid liquid and gaseous including Customers 12.4bn, bringing 12.4bn, bringing Wholesalers, Wholesalers, cooperatives cooperatives and farmers distributors, distributors, solskiy and and solskiy used as effective and and effective as used Sustainability Report 2013 15 Report Sustainability
K fertilizer K fertilizer
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company OPERATIONS MAP global presence for global demand
Our business is international and vertically integrated, encompassing raw materials extraction and supply, manufacturing, logistics, distribution, sales and advice.
17 23
Global reach We also work through third-party distributors We have more than a thousand customers well versed in the advantages of our products. worldwide serviced through our sales and Internationally, our EuroChem Agro network, distribution networks focused on providing based in Mannheim, Germany sells products advice relating to increased crop yields and in more than 50 countries and has distribution 18 optimum use of products. agreements with EuroChem Antwerpen and In 2013, we operated 25 distribution BASF Ludwigshafen. EuroChem Agro has a centres in Russia, Ukraine and Belarus, strong brand portfolio, including Nitrophoska including seven wholly-owned centres and Entec and has regional offices in and 18 run by third parties that sell our Germany, France, Italy, Greece, Turkey, products exclusively. Singapore, China and Mexico.
Nitrogen phosphates potash
1 Novomoskovskiy Azot 5 Kovdorskiy GOK 10 EuroChem-VolgaKaliy 2 Nevinnomysskiy Azot 6 Phosphorit 11 EuroChem-Usolskiy 3 EuroChem Antwerpen 7 Lifosa Potash Complex 4 Severneft-Urengoy 8 EuroChem-BMU 9 EuroChem Fertilizers(Kaz)
16 EuroChem Sustainability Report 2013 ny >1,000 p a com
Customers around the world r Ou y t bili a in sta 13 u s
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IN RUSSIA AND UKRAINE v En y 26 th & safet l ea H y t ibili s o n Head Office in Moscow (see back cover of this report for full address) p l res l a i S oc
port terminals SALES OFFICES EUROCHEM AGRO
12 Tuapse 16 Zug, Switzerland 19 Germany 24 France
13 17 20 25 o n Murmansk Tampa, USA Spain Turkey i 14 Sillamae 18 São Paulo, Brazil 21 Italy 26 Singapore 27 15 Ust-Luga* 22 Greece China format 23 Mexico in *under construction rther Fu
EuroChem Sustainability Report 2013 17 the issues that matter
The challenges and opportunities of food security
Feeding the world’s growing population and improving the nutritional quality of diets are long-term challenges, exacerbated by the increasing frequency and severity of weather shocks in key agricultural areas. With a limited amount of arable land available for farming, the need to ensure that soils retain their optimal nutrient balance has never been so crucial, and fertilizers are an important part of the solution.
200,000 population growth ARABLE LAND PER CAPITA Number of people that join Every day around 200,000 people add to the As the demand for food rises due to global the global food demand global demand for food. population increase, the amount of land each day available for cultivation is decreasing due to United Nations estimates indicate that global continuing urbanisation and industrial growth. agricultural productivity needs to rise by at least 15% by 2020 to maintain global food Since 1960 the global population has increased consumption per capita at today’s levels. by around 130%, whereas cultivated land has The supply of high quality fertilizers will therefore increased by just 10%. Thus the acre of land that be crucial in helping to sustain productivity. fed two people in 1960 must now feed almost +15% five people; fertilizers help to make that possible. Increase in farmland productivity needed by 2020 World population growth (bn) Arable land per capita vs population 10 10 0.5 8 8 0.4 6 6 0.3 4 4 2 2 0.2 0 0 0.1 990 980 960 970 1 1 1 1 2010 2000 2100 +185% 1950 1975 2000 2025 2050 2075 2020 E 2030 E 2040 E 2050 E Average per capita income of Less developed regions Population (bn) (LHS) BRIC countries 2000-2012 More developed regions Arable land (ha/person) (RHS)
18 EuroChem Sustainability Report 2013 in costs. rise asharp and shortages food in resulting supply, overtake not does demand to ensure that years six next 15% the over least at by increase to I output needs to increase significantly. food, for demand the meet to available land arable of proportion alower With soil fer to produce. resource-intensive more are which products, dairy and poultry meat, red as such foods protein-rich createdgreaterfor also demand but consumption food increased only not –has markets emerging in –particularly wealth material in increase The is now more prosperous. ofA the greater proportion world’s population ch 100 150 200 (MMT nutrients) World fertilizerconsumptionin2000-2013 Kilocalories percapita/day 1,000 1,500 2,000 2,500 3,000 t is estimated that farmland productivity needs needs productivity farmland that estimated t is 50 500 0 0
2000 die anging Nitrogen 2001 19 64-66 2002 2003 t 19 ilit Phosphates 2004 97
2005 -99 y
2006 t s
2007 2030
Potash 2008 2009 2010 Rice Wheat Other cereals Vegetable oil Sugar Meat Roots andtubers Pulses Other
2011
2012 2013 1000 1200 1400 GNI percapitagrowthdynamic B growingfaster and highly populated. typically are which economies, emerging from demand by affected strongly is supply Fertilizer e global a significant, longer-term impact on fertilizer demand. fertilizer on impact longer-term a significant, I 185%. approximately by grew Global biofuelproduction(kb/doe) an important driver for fertilizer demand. fertilizer for driver important an therefore is production biofuel in increase rapid The year. one for people million 330 feed to enough U by used corn of 107 tonnes the million –and 24% over to 0.3% from rose ethanol fuel produce to used B of renewable fuels. becoming an source increasingly important are farms food, producing to addition In RENEWABLE 100 150 200 250 300 350 400 200 400 600 800 etween 2001 and 2012, the per capita income of the B the of income capita per 2012, the and 2001 etween etween 1980 and 2012 the share of U of share 2012 and the 1980 etween 0 2000 1990 Brazil United States Asia Pacific Europe &Eurasia North America 2001 S ethanol distilleries in 2009 represented represented 2009 in distilleries S ethanol 2002 1995 2003 2004 c India Russian Federation onomy
f 2005 2000
u 2006 Latin America Africa
els 2007 ncreases in prosperity, changes of diet and larger populations continue to have have to continue populations larger and diet of changes prosperity, in ncreases European Union 2005 2008 2009 (%) S corn S corn
China 2010 2010 2011 2012 2013 100 120 140 Per capitameatconsumption(PPPdollars) R 20 40 60 80 I 0 C countries ( C countries at the right time. and balance right the in growth healthy for needed nutrients quality the providing by yields plant increase help that unique products through resource base. We do this relatively a with diminishing combined demand growing continuously challenge of the address to means world’s farmers withthe the provides EuroChem OuR China 0 B razil F Russian ederatio E ROLE 5,000 India uroChem B n razil, Russia, I Russia, razil, Thailand 10,000 Sustainability Report 2013 19 Report Sustainability 15,000 ndia and China) China) and ndia 20,000
25,000 Japan
30,000 US
35,000
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Governance and ethics
The Board’s strategic role The Board also ensures that we adopt We are developing The Chairman of the Board of Directors international standards and best practice and “ Mr Andrey Melnichenko, and the Chief Executive monitors our accounting function, risk a strong track Officer (CEO) and General Director, Mr Dmitry management processes, internal controls, Strezhnev, have clearly defined and governance framework and sustainability strategy. different responsibilities. record in effective Each member of the Board has built a sound governance and we In addition to compliance with Russian corporate understanding of the business and our industry. requirements, we follow the UK governance They develop relationships with – and access code which emphasises not only the need for information from – the management team, in remain committed demonstrable shareholder communications but particular on strategy implementation, risk also for strong oversight of risk management monitoring and assessment of key material to the principles of and the alignment of remuneration policy with issues. We make full use of each Board member’s stakeholder interests. Since 2001 our aim skills sets and experience and ensure that each the new corporate has been to become a world leader in the individual has ample opportunity to express agrochemical sector. Consequently, the Board’s opinions and give considered advice. governance code.” mission is to ensure that we have a solid and consistent strategy, achieve our business goals, NAME and deliver shareholder and stakeholder value A ndrey Melnichenko in the long term. ROLE C hairman
NAME: Andrey Melnichenko NAME: Dmitry Strezhnev NAME: N ikolay Pilipenko NAME: Vladimir Stolin ROLE: Non-executive Chairman ROLE: Chief Executive Officer ROLE: Non-executive Director ROLE: INDEPENDENT Director
20 EuroChem Sustainability Report 2013 ny p a com r Ou y t bili a in sta u s c The selection and nomination of Board members Taking informed decisions Thorough induction i is made by the Corporate Governance and To facilitate the understanding of our operations, We provide every new Director with a clear picture om Personnel Committee. Its members have the n
Board members undertake yearly site visits to one of our business and operations as soon as they co competence and experience to manage the of our facilities. Unfortunately, the 2013 site visit join the Board. This formal induction process also E search process and evaluate candidate suitability. had to be cancelled; however, a tour of Usolskiy requires learning the regulations pertaining to Shareholders and the main Board are consulted Potash is planned for 2014. Board procedures, standing items on the Board’s over recommended candidates and the General forward agenda and a round of meetings with y Director makes the final selection. The agenda for Board activity is planned twelve key managers. New directors are also given the t bili
months in advance, taking into account the opportunity to visit one of our facilities during a
All candidates are selected and nominated optimal cycle for reviewing recurrent issues their induction. in regardless of nationality, ethnicity, gender, such as budgets, financial reporting and strategy. sta age or other non-professional characteristics. u
The timing, expectations and goals of these In 2014 we will develop an integrated training s l
reviews are well understood by both the Board programme for Board members; this will ta n In 2013, the Board welcomed two new members, and management team and include detailed supplement the general induction and enhance me Alexander Landia and Garth Moore. updates on core operational areas, investment decision-making. n i ro
projects and strategy. v En Each Board member is assessed annually by their fellow directors and their contribution is evaluated. The 2013 assessment focused on strategy and risk resilience, but this will be
strengthened and improved in 2014. y th & safet l ea H y t ibili s o n p l res l a i S oc o n i format in rther
NAME: Richard Sheath NAME: Alexander Landia NAME: Garth William Moore NAME: Andrea Wine Fu ROLE: INDEPENDENT Director ROLE: INDEPENDENT Director ROLE: INDEPENDENT Director ROLE: INDEPENDENT Director
EuroChem Sustainability Report 2013 21 Governance and ethics (continued)
Independent judgement The Board of Directors appoints the CEO and EuroChem is a member of the Russian National We have adopted the UK Corporate Governance the members of the Management Board and Council for Corporate Governance, a non- Code definition of ‘Independent Director’. A key determines the length of their terms. Further governmental organisation aiming to educate criterion is that the individual is free from any information on the Board and executive team is Boards and improve standards of governance conflicts of interest. If such actual or potential available on our website at www.eurochem.ru/ throughout the country. conflicts arise, independent directors are notified who-we-are/board. and are required to act appropriately. Improving diversity There are three committees chaired by Board In line with our Human Resources Policy, we aim members – the Audit Committee, the Corporate New Directors are required to declare any to attract the best people with the right talent to Governance and Personnel Committee and the conflicts of interest and sign up to the Company’s complement our skills, irrespective of gender Strategy Committee. Board Regulations. This requires them to refrain or ethnicity. from taking action that could lead to a conflict The Audit Committee consists of two members: of interest and obliges them to inform the Our Board of Directors demonstrates diversity an independent Chairman; and a non-executive Chairman as soon as possible. According to of experience, opinion, gender and nationality. director, who is not formally regarded as Russian legislation, information on related party The gender imbalance across our Group independent as he served as the Company’s transactions are disclosed. The annual report companies is an ongoing issue, as it is for many CFO from 2006 to 2008. The current Finance (and website) disclose cross-Board memberships, other businesses in the science, mining and Director and the Head of Internal Audit attend all existence of controlling shareholders and engineering sectors. Nevertheless, we continue to Committee meetings; the Corporate Secretary related parties. look at ways of improving gender balance in senior participates in the meetings regularly and the roles, including our E-Generation programme, external auditors are invited to take part in As at the date of publication of this report, which is identifying the bright and motivated discussions when necessary. The Committee’s five of the Board’s eight Directors were fully young men and women whom will lead the primary function is to oversee the quality of independent of the Company’s executives, company in the years ahead. affiliates and major counterparties. Their financial and sustainability reporting and integrity of information disclosure. The Administrative independent status is confirmed by the Board Assessing risks and critical concerns of Directors after each election or re-election Director is ultimately responsible for the timely The executive team has primary responsibility using a standard questionnaire relating to the production of the sustainability report. for identifying, assessing and managing risks. declaration of interests. All directors are required This process also includes engagement with to inform the Company of any events which could The Strategy Committee has three members: stakeholders. These processes and decisions lead to the loss of their independent status. a non-executive Chairman and two independent directors. It reviews and approves divisional are reviewed at regular meetings of the Audit Committee. In certain instances particular risk Leadership by example and segment strategies, development projects, acquisitions and significant investment decisions. management issues are discussed by the The Chairman oversees and guides the Board and main Board. is responsible for ensuring its effectiveness by This requires environmental and social impact competence as our investment activity can affect facilitating open communications, developing EuroChem defines a ‘critical situation’ as a state relations and creating a culture of mutual respect the local environment and create infrastructure and opportunities for local employment. of affairs that adversely affects or can adversely and constructive debate. affect the business and its reputation. These may include: The Board sets company strategy and monitors The Corporate Governance and Personnel Committee has three independent directors. its progress. The strategy is implemented by • Emergencies and catastrophes causing the General Director and members of the It focuses on remuneration and incentives, staffing requirements at ongoing investment damage to human life and the environment. Management Board, who are responsible for • Incidents such as accidents, emissions company performance. The Management Board projects, the introduction of health and safety performance indicators within the management of hazardous substances, fires or comprises key managers responsible for finance, workplace fatalities. fertilizer production, mining, sales, logistics incentive programme and reviewing and updating • Termination of operations due to financial, and administration. Other members of the the EuroChem Codes of Business Conduct economic, technological or political reasons. management team with responsibility for and Ethics. sustainability and stakeholder relations include • Negative media coverage. the Procurement Director, Heads of HR, HSE, • Local or national conflicts involving Communications, Investor Relations and government, local authorities or communities. Government Relations.
22 EuroChem Sustainability Report 2013 • • I responsibility. have communications of L and Director Director General the case, in which disputes, legal as such situations B the inform to required also is Company The up-to-date. Secretary Company B the keeping for have responsibility then Directors and Administrative General The all B to day working one within Secretary Company by the communicated is information the arise, situations such When and updates on new legislation. new legislation. on updates and market analyses, peer and competitor reviews, B The management the from team. updates to obtain emergency, or B event I projects. strategic and legalperformance, processes, events corporate safety and health on updates periodic with material, B meeting I required. when times B the to communicated are performance social and environmental in economic, developments All acquired. or and developed being are assets new where directly acting companies, operating the of each across counterparts their with work in turn and Directors the into report They Environment. and Safety Health, HR, Communication, of Heads Administration. and Finance of Directors the and committees board three the through overseen is implementation strategy, sustainability for the responsibility B the While S n 2013, there were two key critical situations: keycritical n 2013, two were there oard through scheduled meetings and at other other at and meetings scheduled through oard ustainability governance ustainability of health and safety regulations. regulations. safety and health of violation asubcontractor involving incident An B EuroChem at accident A fatal oard is also provided with media overviews, overviews, media with provided also is oard oard and the CEO take ultimate ultimate take CEO the and oard oard members are provided are provided members oard n addition to scheduled scheduled to n addition oard members are the first first the are members oard n the case of a significant asignificant of case n the oard members. members. oard oard of any other other any of oard M U oard and and oard egal Affairs egal Affairs
of Ethics and Code of Conduct since 2007. since Conduct of Code and Ethics of Code aformalised to worked has EuroChem E sectors in Russia. in other companies and sector our to in relation in class best as cited often weare consequence, a As development. professional continuing of programme a from benefit they and annually responsibility for these systems is reviewed with managers senior of performance The resources. human and environmental safety, and are financial, health impactthat onsustainability systems main The responsibilities. and actions all procedures, record and targets and objectives achieve to operate systems These safety. covering quality,systems and environment, health management certified operates EuroChem M thics andbehaviourthics corporate anagement structure
E uroChem Sustainability Report 2013 23 Report Sustainability
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company OUR STAKEHOLDERS RESPONDING TO our stakeholders
We have identified and communicate with 13 key The frequency and type of contact varies stakeholder groups. according to the nature of our activity and Why young the interests of the stakeholder. For example, Professionals We identify individuals, groups and organisations we establish community investment committees are so important with whom we have a two-way dialogue. This consisting of EuroChem managers and to eurochem communication is either required by law or local representatives to identify priorities for necessitated through our business strategy and investment in local towns and surrounding The skills we need processes. In most cases, the engagement is regions. The committees hold regular review formal, planned, structured and documented. meetings and the individuals involved have Our business has to continue to be For example, where we are developing or ongoing frequent and informal dialogue as internationally competitive. We rely on acquiring a new asset we will communicate investment projects progress. our intake of talented graduates, and their internally and with external parties such as the development within EuroChem, to ensure relevant government authorities, regulators All engagement is recorded, along with the our success. and local community representatives. views of stakeholders and action taken where required. The key topics of concern raised by Fundamentally, we could not run and grow our stakeholder groups in 2013 are reflected our business without a significant level of in this section. These topics have guided us 1,000 communication with all people and groups in defining the material issues that we have that are involved in or affected by what we do. addressed in this report. engineers to be recruited by 2016
24 EuroChem Sustainability Report 2013 performance. management,risk financial Issues: facility. loan term long secure outlook, stable with 2013: reports. annual and updates trading Channels: teams. communications and Relations Managed by: INVES AND SH pathways. career development, and professional employment, personal Issues: tournament. hockey ice plants, EuroChem at days family Olympiad, Chemistry of 2013 the sponsorship I teachers, and pupils,more students 2013: events sports with schools and universities, family days, Channels: teams associated and Communication of Managed by: yo u HOLDERS ARE ng professionals Fitch and S& and Fitch of E-generation Expansion with Strategy, governance, to access development, Skills
E-Generation programme programme E-Generation I nvestor meetings, roadshows, meetings,nvestor roadshows,
Administrative Director, Head Head Director, Administrative The B The T rating rating BB P affirm ORS oard, Head of I of Head oard, nternational nternational
nvestor nvestor
2 1 St Issues: Trading Agro Shenzhen. EuroChem and SAS France Agro EuroChem established 2013: associations. trade visits, Channels: advisers. agricultural and teams sales M CU effectiveness, delivery. effectiveness, anaged by: anaged ake S T Grew our customer base and and base customer our Grew 7 6 5 4 3 2 1 P OMERS f TRAD E CUST y rice, product quality and and quality rice, product h AUT R S AND IN
Social Meetings, exhibitions, site site exhibitions, Meetings, o e mp H E older engagemen d GI ung AR
Head of Sales & Marketing, &Marketing, Sales of Head e HORITI l O ral OMERS o LD EHO E NAL AND L AND NAL ONS UNI p y VE ee r aut ST of E s S O E
e RS RS horiti onals ssi Environmental O
CAL CAL e s 3 t diagram Health &Safety Health 10 12 13 11 9 8 2013: 2013: programme. media, E-generation digital newspaper, events, corporate meetings, Channels: teams. HR M E working conditions, location. Issues: and training programmes. systems &Safety Health enhanced P l AND UNI ONS ORGANISATI NON- PARTN DIA ME EN ONS ORGANISATI AND SU mployees anaged by: anaged o R cal OF V E IR Grew our employee base, base, employee our Grew Career pathways, salaries/benefits, pathways, salaries/benefits, Career E P uroChem O communiti NAL B ONAL SSI R E
NMENTAL Recruitment, orientation, team PP RS RS FIT OFIT VE
Administrative Director, Director, Administrative ERS LI RSITI
Sustainability Report 2013 25 Report Sustainability E S O
Economic DI e s E S
4
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company OUR STAKEHOLDERS (continued)
TRADE UNIONS 5 federal authorities 6 REGIONAL AND LOCAL 7 AUTHORITIES Managed by: Administrative Director, HR teams. Managed by: Head of GR, Administrative Managed by: Head of GR, Administrative Channels: Meetings, conferences. Director, Head of Communications. Director, Head of Communications. Channels: Public-private partnerships, Channels: Public-private partnerships, meetings, conferences, launches. meetings, conferences, launches. 2013: Maintained constructive dialogue, considered recommendations and maintained all collective agreements 2013: Ongoing collaboration with 2013: Opening of new sports facilities, in place across all of our sites. Russian Ministry of Sports and related education facilities and housing projects, Issues: workplace safety, infrastructure agencies, consulting with site visits, liaison meetings. salaries/benefits. Government’s of Kazakhstan and Issues: Compliance, investment. Louisiana over new operations. Issues: Compliance, partnership, e.g. ice sports, economic development, environmental controls.
LOCAL COMMUNITIES 8 ENVIRONMENTAL 9 PROFESSIONAL BODIES 10 ORGANISATIONS AND UNIVERSITIES Managed by: Administrative Director, Head of Communications, Head of HR, Managed by: Head of HSE, Plant Managed by: Administrative Director, Plant management. management, Head of Communications. HR teams, specialists. Channels: Joint working groups, liaison Channels: Working groups, meetings, Channels: Joint projects/sponsorships, offices, public and one-to-one meetings, conferences, site visits. meetings, site visits. site visits, volunteering, media.
2013: Water quality sampling for Baltic 2013: E-generation programme, 2013: E-generation programme, Clean Sea project. Chemistry Olympiad. sports facilities, housing projects, Issues: Planning, monitoring, Issues: Skills and knowledge site visits, recruitment. reporting, investment. enhancement, career development Issues: Investment, and opportunity for students. environment, employment.
26 EuroChem Sustainability Report 2013 Issues: presentation. CSR results, financial e.g. new partnerships, 2013: visits. site media, social launches,website, calls, press Channels: Head of I M MEDIA the with ameeting and site Antwerpen EuroChem the of atour included exchange The discussed. were protocols reporting and trends responsibility B and Russia in responsibility corporate to approaches I I n 2013, EuroChem Antwerpen hosted an exchange of ideas on and and on ideas of exchange an hosted Antwerpen n 2013, EuroChem n anaged by: anaged ter n Ongoing communications communications Ongoing at Trust access. and nvestor Relations.
i
Media releases, interviews, interviews, releases, Media on
Head of Communications, Communications, of Head a l d i a l og u e on cor
p orate 11 res elgium. Corporate Corporate elgium. p on price, fairness. Issues: guidelines. and contracts wehave clear whom with contractors newengagement suppliersand with necessitating assets, new developed and 2013: delivery.contract Channels: P teams, their and divisions all of operational Heads M PAR AND anaged by: anaged s ibili T Expanded our distribution network network distribution our Expanded S Trust, mutual alignment of aims, aims, of alignment Trust, mutual t NERS y
U Meetings, conferences,
PPLIERS
lant management. management. lant P rocurement Director, rocurement
and the Russian language radio station Ru- station radio language Russian the and and Donors Forum. They met with heads of B of heads with met They Forum. Donors and U the Mayor Russian-based The ofdelegates Antwerp. included representatives of nion of I of nion ndustrialists and Entrepreneurs, the Social I Social the Entrepreneurs, and ndustrialists
12 M organisa non-profit Issues: 70 N than 2013: volunteering. joint-projects, Channels: Plant management. anaged by: anaged B el Antwerpen. el usiness and Society B Society and usiness E We continue to engage with more more with engage to We continue Trust, co-operation, mutual benefit. mutual Trust, co-operation, uroChem GOs across a range of activities. of arange across GOs
Meetings, conferences,
Head of Communications, Communications, of Head nformation Agency Agency nformation tions Sustainability Report 2013 27 Report Sustainability
elgium elgium 13
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Defining what is important
As a rapidly growing and internationalising Process for defining report content Step 3 Prioritisation and review business, the sustainability issues that are Our reporting group consists of the Heads The reporting group discusses all topics, consults business critical and important to our stakeholders of Social Responsibility, Environment, Health further with stakeholders and identifies the key are many and varied. There may be issues of & Safety and Communications. They take the lead material aspects and associated indicators in line global or local concern and may be viewed in on gathering relevant information and defining with GRI G4. different ways from different perspectives. report content. The group made a decision at the However, it is the purpose of this report to start of the data gathering process to attempt to As a reporting principal, the group looked capture what we think are the issues that are report in accordance with the Core criteria of at interactions with internal and external the most material and why they were so important GRI G4. stakeholders during the reporting period, which during 2013. is the calendar year 2013. It also looked at all Step 1 Reporting group review the existing operational sites excluding the new The previous section has summarised the • Records of interaction with stakeholders development in Kazakhstan. In essence, the many stakeholders with a legitimate view on – consulting with relevant department heads aspects identified are material to all areas of our sustainability performance and the kinds and operational managers the business and all operating sites as identified of issues that are of primary importance to • Key business decisions, investments and in this document and the annual report. them. Here we define in more detail why we announcements made during the year have chosen to represent our sustainability The following tables identify the aspects and • Performance of management systems performance through the topics covered indicators on which we are reporting, based in this report. on the reporting group’s review, along with Step 2 Reporting group analysis a summary of why they are important, which The broad categories under which we have and comparison stakeholder groups have the most interest in chosen to report are economic, environmental, • Identify all the topics of importance them and how we measure performance. More employee welfare (in particular health and safety) to stakeholders detail on management approach and resulting and social (in particular employee and community • Compare topics with those identified performance is provided in the relevant section development). Note that we have chosen to in the previous sustainability report of this report. highlight Health & Safety performance as a distinct topic, reflecting the level of investment and human resources that we are putting into this area in order to become an exemplar of industry best practice.
Issue of importance ealth & Safety roduct price roduct quality roduct availability nvironment mployment accessmployment
Stakeholder group Skills E Training Salaries/bonuses H Compliance Strategy Governance Risk management Financials Investment E Communication P P P Young professionals ✓ ✓ ✓ ✓ Shareholders and investors ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Customers ✓ ✓ ✓ ✓ ✓ ✓ Employees ✓ ✓ ✓ ✓ ✓ ✓ ✓ Trade Unions ✓ ✓ ✓ ✓ ✓ ✓ ✓ Federal authorities ✓ ✓ ✓ ✓ Regional/Local authorities ✓ ✓ ✓ ✓ Local communities ✓ ✓ ✓ ✓ ✓ ✓ ✓ Environmental organisations ✓ ✓ ✓ ✓ ✓ Professional/Universities ✓ ✓ ✓ Media ✓ Partners/Suppliers ✓ ✓ ✓ ✓ ✓ ✓ ✓ Non-profit organisations ✓ ✓
28 EuroChem Sustainability Report 2013 E E S &safety Health Aspect Aspect Aspect Aspect impacts Indirect economic Training education and H Water E E Local communities Remuneration opportunity equal and Diversity E Waste and effluent and Waste nvironmental sustainability nvironmental conomic sustainability ocial sustainability ocial missions mployee relations conomic performance ealth &Safety ealth Why it is important is it Why important is it Why important is it Why important is it Why and supports our growth and investment plans plans investment and growth our supports and I we operate where stakeholders we local engage with I professionals of youngtalent, our particularly cohort retain and attract to ability our on predicated is business our of growth sustainable The production for water of volumes large require operations our of Some health and safety risks safety and health pose which facilities hazardous We operate and the environmentand the humans to harmful be can which gases of range a emit that processes complex We operate local on impact have asignificant can operations its and employer asignificant is EuroChem for average above are that wages pay we aim to I co-operation and communication. co-operation of ahighlevel requires and demanding is work The nationalities. different 50 more than We employ over 22,000 people, representing representing people, 22,000 over We employ employee our way weconduct The on all our performance measures. performance all our on engagement, a which bearing has direct staff of level the determines relationships solid wastes and effluents, e.g. phosphogypsum of volumes significant manage and We produce n order to attract and retain the best people, people, best the retain and attract to n order t is a fundamental measure of business health health business of measure afundamental t is t relates to our market presence and the way way the and presence market our to t relates the sector in each operational territory. in each operational sector the environments and local economies. and local environments
Who has astake has Who astake has Who astake has Who astake has Who The B The government, local communities local government, government,local national B The institutions, communities, suppliers communities, institutions, and B The B The education B The management, B unions,government, trade suppliers, Employees, national and local suppliers communities, utilities, N government, communities, N communities, government, Employees, national and local education institutions and B The government, utilities, communities andsuppliers, local national B The government, communities, N communities, government, Employees, national and local ational and local government, government, and local ational local government, educational government, educational local local government, communities, communities, government, local oard, employees, investors employees, oard, oard, employees, suppliers, suppliers, employees, oard, oard, employees, national national employees, oard, employees oard, oard, employees, employees, oard, oard, employees, national national employees, oard, oard, employees, investors, investors, employees, oard, institutions oard GOs GOs E uroChem I I I I Ratings agencies Ratings N E sales Annual and communities and Feedback from government L government and communities and government L L average monthly wage monthly average equivalent wagein Changes remuneration Average full-time Fixed remuneration Variable Teaching standards centres I (m Water consumption L Kg/tonne in P numbers L P P employee per Revenues turnover Employee ratio employee to Management Effluent (m Effluent ndicator ndicator ndicator ndicator nvestment in training training in nvestment evel of investment of evel evel and type of partnerships with with partnerships of type and evel investment community of evels evel of investment Employee Employee investment of evel ost Time I Time ost BI ersonnel costs ersonnel et debt/E management positions management TDA TDA Training partnerships
Sustainability Report 2013 29 Report Sustainability ercentage of women of women ercentage BI 3 njury Frequency Rate Frequency njury /tonne) TDA ratio TDA
roduction per person per roduction 3
/tonne)
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company ECONOMIC sustainability
Our financial success is Economic performance Diversified and balanced market position The Board of Directors oversees all aspects of • Positioned to withstand pricing pressures and a function of our ambition, our financial performance. Overall management demand volatility with a growing product range strategy, execution, our people responsibility is in the hands of the Chief Financial • Reduced dependence on seasonality Officer (CFO), to whom the finance heads of our • Further diversification when potash comes and our ability to engage with operating companies report. on-stream with capacity of 8m tonnes those living and working per annum around us. Our financial performance is predicated on the continued consumption of fertilizers at a Vertical integration sustained price, which in turn is driven by growing • 75% self sufficiency in phosphate rock population, changing diets and land use shifts. from Kovdorskiy, augmented, from 2015, In order to make the most of this market with resources from our new operation opportunity while preparing for potential in Kazakhstan challenges and volatility our business aims to have the following attributes: • Iron ore, fluoride and acid by-products add to revenues Global scale and market position • Acquisition of natural gas producer offers • Russia’s largest fertilizer company and one 20-25% self sufficiency and hedge against of the top three in Europe rising prices • 26% and 19% market share in nitrogen and • Future cost leadership in potash, allied phosphate respectively in our home market to owned rail hub at Gremyachaya and Find out more on: transhipment terminal at Tuapse www.eurochem.ru and increasing overseas • Growing distribution and advisory revenues • Effective, owned distribution network, outside of Russia including port terminals and rolling stock • Growing international production presence • Global product footprint – used in more than 100 countries accounting for 86% of output
Aspect Why it is important Who has a stake Indicator Economic performance It is a fundamental measure of business health The Board, employees, investors Annual sales and supports our growth and investment plans EBITDA Net debt/EBITDA ratio Ratings agencies
Policies and guidelines Aspect boundary Business strategy Internal and external Russian financial regulators Our business supports employment, provides community services Federal Law on Natural Monopolies and pays taxes in its main areas of operation. Federal Law on Electric Power Industry Code of Conduct Code of Ethics
30 EuroChem Sustainability Report 2013 a link between all departments.” a link between andas acting independently working decisions, management – supporting university after straight responsibility of ahighlevel such with arole up S RO N Mannheim (DH Mannheim U State Cooperative B the at education abusiness receiving while environment company exciting an of part became She in Mannheim. Agro EuroChem at programme study M Eu IWORK: WHERE MANAGEMEN Con 01 tor AME: AME: Y V L E: E: t I y: y: EW: EW: rollingC FINAN Con F Felicitas joined the dual joined dual the Felicitas aden-Württemberg aden-Württemberg eli “ am proud of taking taking of proud I am t c roller, i t T DEPAR as N B W). W). roC iebler niversity in in niversity
T h E MEN
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professional development.”professional continuous and skills communication work, your for employer, affection of choice agood be should building career of principles main S N his current role. role. his current P he began his career at P the reconstruction of the Wet- the of reconstruction the in participated recently He Electrician. Service Equipment Electrical an as EX RO WHERE I M 02 tor hosphoric Acid Workshop, leading to AME: Y V T L E: E: RA I y: y: EW: EW: HORIPHOSP A CT After graduating in 2010 graduating After WORK: lexander M lexander ION “ believe that the the that I believe 03 PROD PHos C A UCT 01 PHorit C ez ID ION hosphorit hosphorit h
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A WHERE I & E openness and respect.” and openness pragmatism, empowerment, which encourages collaboration, culture, company its of because EuroChem for work to I chose prospects, career excellent and job RO Antwerp Management School. Antwerp at Management Resource Human in Masters Advanced an through hisexperience broaden to decided U B S M FINAN N 03 tor usiness Engineering from the the Engineeringusiness from AME: niversity of Antwerp. He then then He Antwerp. of niversity n Y V L t C E: werpen 04 ONOMI I y: y: EW: EW: C CE K Kristoff graduated in in graduated Kristoff ON WORK: ris , A “ N T 02 CC C DEPAR toff Havelaer ROLLER ext tochallenging the ext O Eu U N roC T , ING T
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E uroChem to work at EuroChem.” at work to I projects. environmental and sports intellectual, social, invents andconstantly implements active at the plant. plant. the at environmental activities organised in the participant active an is Y of Council P Environment in specialising Kaunas, U Stulginskis Alexandras S RO N ENVIRONMEN M WHERE I DIVISION 04 tor rotection. She is a member of the the of amember is She rotection. AME: Y V L E: I y: y: EW: EW: T youth movement that that movement youth M Migle graduated from from graduated Migle E WORK: CH igle Shan Sustainability Report 2013 31 Report Sustainability “ L NI oung Specialists and and Specialists oung ifosa has a very avery has ifosa CIAN T AL L ifosa PROT , t arai E t is fun fun t is niversity, niversity, CT t e ION
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company ECONOMIC SUSTAINABILITY (continued)
Strong corporate governance • Joint venture with Migao Corporation to For example, Lifosa celebrated its 50th • Experienced and independent Board members produce potassium nitrate and NPK in anniversary in 2013 and EuroChem Antwerpen • Strong management team Yunnan province celebrates its 50th anniversary in 2016. • Record of solid execution • Announced plan to create a urea and ammonium plant in Louisiana, USA Our new sites such as VolgaKaliy, Usolskiy Potash, • Commitment to best practice and transparency Ust-Luga (Russia) and Kok-Djon (Kazakhstan) • Focus on production and logistical Financial performance and processes have to establish relationships and partnerships efficiency improvements while providing facilities for employees and • RUB 176.9bn sales in 2013 communities, on which they may have a Investing in our future • RUB 43bn EBITDA in 2013 significant effect. The highlights of our strategic investment and • 2.07x net debt/EBITDA in 2013 M&A programme in 2013 included: • BB ‘stable’ rating from Fitch and S&P Our community investment strategy is defined • Continued development of the Gremyachinskoe and monitored at Board level and implemented and Verkhnekamskoe potash deposits How we manage indirect by Directors of Finance, Administration, • Launch of drilling and blasting operations economic impacts Communications and Human Resources, along at Kok-Djon phosphate rock development with the Managing Directors and counterparts Our relationships with and investments in local in the operating companies. Our community in Kazakhstan communities differ based on the nature of our • New ammonium nitrate plant at investment themes are sports, health, education, operations and their locations. Some of our older environment and charity. Novomoskovsky Azot operational sites have been an integral part of • Integration of EuroChem Antwerpen, Belgium their local communities for many years.
Aspect Why it is important Who has a stake Indicator Indirect economic impacts It relates to our market presence The Board, employees, suppliers, Level of investment and the way we engage with local national government, local Feedback from government stakeholders where we operate government, local communities and communities
Policies and guidelines Aspect boundary Business strategy External Russian financial regulators We operate in areas where our plants are amongst the most significant Federal Law on Natural Monopolies employers. While drawing on energy and natural resources we also Federal Law on Electric generate significant economic opportunities. Power Industry Code of Conduct Code of Ethics
Priority Projects Activity in 2013 Sports Opportunities to achieve sporting goals More than US$14m invested between Support junior sports schools and public clubs 2009-2013 in sports facilities and competitions Sponsor competitions Hockey arena opened in Nevinnomyssk Ice sports development with the Russian Ministry of Sport, Multi-sports arena opened in Kingisepp Tourism & Youth Organised international junior ice hockey and soccer tournaments Brussels to ‘Moscou’ cycle ride Health Modernising healthcare facilities Support for hospitals and medical units Education Support for schools Financial assistance and infrastructure EuroChem chemistry classes improvement for schools Support for regional education classes E-generation progamme with schools, Support for chemistry teachers universities and teachers Sponsored International Chemistry Olympiad Training courses for employees Environment Waste disposal, water use reduction, Ongoing environmental improvement projects land reclamation projects at Kedainiae, Novomoskovsk, Kingisepp Community engagement and Belorechensk Ongoing site visits and engagement with community groups and environmental organisations. For example, Phosphorit’s work with the John Nurminen Foundation and Clean Sea Project or EuroChem Antwerpen’s Community Advisory Panel Charity Support for vulnerable groups Supported more than 70 organisations Partnerships with NGOs including orphanages, veterans’ groups and Volunteering charitable foundations In 2013, more than 500 employees volunteered to help 30 community organisations
32 EuroChem Sustainability Report 2013 K P u la opera Mining Novomoskovsk developmen ec romot azak onomi n ch t h ions ions ed in in ed s ing ing c t
an t in in reduce emissionsreduce water and waste increase quality. upgraded processes and monitoring in order to U anew with upgraded extensively been has plant The Russia. in produced fertilizer nitrogen and ammonia of tonne ninth every for I years). 80 for operated (having site established longest Eurochem’s and Russia in sites N U of investment an representing and 2014 in stream on due ore, phosphate of tonnes 640,000 be will capacity production initial The J Kazakhstan’s in development rock phosphate its at operations blasting I n October 2013, EuroChem launched drilling and and drilling launched 2013, EuroChem n October ovomoskovsky Azot is one of the biggest chemical chemical biggest the of one is Azot ovomoskovsky ambyl Region. Region. ambyl rea plant, plant, rea t is responsible responsible t is S$120m. S$120m.
to energy, water and good transport links. to energy, water transport and good access ready the by attracted follow, will others and aplant built already has company international One thereby zone. creating a enterprise multi-business of highother manufacturers value chemical products, to sold production for used longer no site the of parts see will that plan amaster implement to government the regional with hasworking been Eurochem I plant. nitrate ammonium 2013 in anew on began Construction facilities. community of provision through new jobs, enhanced infrastructure and the development to economic contribution considerable a make will and government regional and national the of co-operation full the with undertaken being is deposit Kok-Djon the of development The n parallel with the upgrade programme, programme, upgrade the with n parallel E uroChem Sustainability Report 2013 33 Report Sustainability
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Environmental SUSTAINABILITY
Our business operates on the How we manage water use, emissions, Management is devolved as follows: waste and effluent basis that we are contributing to In 2013, the management of environment, health Company level – CEO, EuroChem Management a more resource efficient planet and safety (HSE) came under the control of a Board and Directors (HSE is always the first Corporate HSE Department (based in Moscow), agenda item on the weekly Management Board through the use of our products. reporting directly to the Administrative Director. and quarterly Board of Directors meetings) We therefore ensure that our This new Department organises and integrates the work of more than 120 HSE professionals Divisional level – Divisional Managing Directors direct and indirect impacts whose role is to ensure the effective and on the natural environment consistent execution of the HSE Policy across Plant level – Plant Managing Director (to which all plants. We have a clear and stated commitment the dedicated HSE team reports) are minimised. While our to strengthening HSE culture, management In line with the corporate reorganisation, also in systems and compliance. 2013, the Board approved a new HSE Policy environmental protection which applies to all our operating plants. The expenditure decreased by This was part of a wider corporate reorganisation, policy defines our commitment to compliance with 11% in 2013 (compared which saw a HSE function embedded within the relevant laws and regulations and an equal newly created corporate Divisions of Fertilizers, commitment to continuous HSE performance to 2012), the overall trend is Mining, Logistics and Sales. improvement. The management system is subject to ongoing internal audit and annual external increasing and we expect this verification by an independent certification to be the case over our next company against the ISO14001 standard. We also Environmental protection expenditure continue to comply with REACH and the (RUBbn/year) five year planning cycle. requirements of the chemical industry programme 1.5 Responsible Care. For more information about our HSE indicators see 1.30 the GRI Table on our website: www.eurochem.ru 1.2 1.11 1.16 This approach unifies our environment and health 0.89 0.9 and safety management. In particular it applies 0.76 to the three indicators that we are reporting on 0.6 for 2013, namely water, emissions and waste 2009 2010 2011 2012 2013 and effluent.
Aspect Why it is important Who has a stake Indicator Water Some of our operations require large National and local Water consumption (m3/tonne) volumes of water for production government, utilities, communities, suppliers Emissions We operate complex processes Employees, national and Kg/tonne that emit a range of gases which local government, can be harmful to humans and communities, NGOs the environment Waste and effluent We produce and manage significant Employees, national and Effluent (m3/tonne) volumes of solid wastes and local government, effluents, e.g. Phosphogypsum communities, NGOs
Policies and guidelines Aspect boundary Business strategy Internal and External HSE Policy and Framework Our use of water and our emissions, waste and effluent are internal management priorities. Environmental protection and natural resources laws Our environmental management systems apply to all of our operational sites. This excludes and regulations in countries of operation the repair services attached to each of these production sites, which have their own Environmental Management System management system. (compliant with ISO14001) Equator Principals Water is taken from outside the company while effluent, waste and emissions have an REACH impact beyond site boundaries. Responsible Care
34 EuroChem Sustainability Report 2013 01 02 03 04
NAME: Aida Jafarova NAME: Yulia Mikhailova NAME: Anton Molvinsky NAME: Yuri Leonov ny p a ROLE: SPECIALIST, Industrial ROLE: SPECIALIST, ROLE: LEAD TECHNOLOGIST IN ROLE: Head of Repair and
Waste Neutralisation and HSE Department THE PRODUCTION DEPARTMENT Construction Service, com Treatment Facility FERTILIZERS DIVISIONS r WHERE I WORK: KOVDORSKIY GOK WHERE I WORK: Severneft- Ou WHERE I WORK: Phosphorit Urengoy WHERE I WORK: EuroChem Moscow MY VIEW: “I like the active young team MY VIEW: “It is important for me at the plant and the fact that the MY VIEW: “The Company grows MY VIEW: “My approach to work is that my work contributes to Company supports our initiatives.” through its investments in new not only to comply with my job environmental protection. In addition, projects, which also provides me with description, but to assume additional I have found a friendly team of Story: Yulia graduated from Moscow opportunities to learn and develop.” responsibilities. This, I believe, is State Textile University specialist in professionals and good facilities the approach of all of the EuroChem y
Story: Anton was employed in t to realise my career ambitions.” Engineering Process and Industrial team and it is why the Company
Safety. She is a member of the 2012 as a Lead Process Engineer bili is so dynamic.” a
Story: While studying at Ivanovo Council of Young Specialist and is an in the Production Department of in Story: State Chemical and Technical active participant in social projects Severneft-Urengoy. He greatly values Yuri started working at sta u
University Aida was an intern at and events promoting healthy the experience, the opportunity to EuroChem headquarters in 2011, s c Phosphorit. In 2012, Aida won third lifestyles, occupational and employee participate in innovative engineering since when he has been promoted i om prize at a Company-wide scientific safety and career guidance activities projects and in the development of to his current position. n conference. She is also an active new deposits. co
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EuroChem Sustainability Report 2013 35 ENVIRONMENTAL SUSTAINABILITY (continued)
Atmospheric emissions across the Group Non-recycle water consumption per tonne Water of production (m3/t) Water is used in production and energy generation remained static between 2012 and 2013 at 1.04 kg per tonne of production. We expect to see 3.5 across the company’s plants. It is obtained in 3.30 3.30 incremental improvements during 2014-15 as 3.20 varying measures from surface and ground 3.10 water sources. investment in new facilities such as the sulphuric 3.0 2.91 acid plant at Lifosa come onstream. Its use is governed by national and EU regulations, as well as our own management targets. Our reporting group analysed stakeholder 2.5 2009 2010 2011 2012 2013 Consumption patterns are monitored and expectations alongside business imperatives and managed by the HSE teams at each plant and chose not to identify greenhouse gas emissions as a specific material issue in this report. This Atmospheric emissions per tonne of production reported back to the Corporate HSE Department. (kg/t) decision was made chiefly because our corporate footprint changed (for example, through the 1.5 In 2013, our consumption of non-recycled water per tonne of production decreased by 7% over integration of Eurochem Antwerpen) and under 2012. This reflects the ongoing investments in the auspices of the new HSE regime, we decided to review our approach to measurement and 1.15 1.16 new and improved plant operations as well as 1.09 specific programmes to reduce water use and analysis of greenhouse gases from 2013 1.04 1.04 improve treatment and recycling. through 2014-2016. We expect the stakeholder 1.0 2009 2010 2011 2012 2013 expectations around greenhouse gas emissions to Emissions change in 2014 as we cement and expand our international footprint and as the business enters Effluent discharges per tonne of production (m3/t) The main emissions across the company’s plants are sulphur oxides, carbon monoxide, nitrogen a new phase of development.
3.5 oxides, sulphuric acid, ammonia, particulates, 3.30 Waste and effluent 3.20 3.26 hydrocarbons and volatile organic compounds. 3.12 The main solid waste streams from the company’s 3.0 2.93 Emissions levels and controls are governed plants are phosphogypsum (from phosphate by national and EU regulations, as well as our fertilizer production), overburden and own management targets. We also operate a concentration tailings (from mining operations). 2.5 2009 2010 2011 2012 2013 network of air quality monitoring stations at Waste water from our plants contains, in varying Belorechensk, Nevinnomysk, Tuapse, Kotelnikovo, degrees, levels of petroleum products, suspended Graphs are based on the national environmental Novomoskovsk, Kingisepp and Usolie. The matter, ammonium, nitrates, sulphates, chlorides, reporting requirements. resulting data is fed to independent regional fluorine and phosphorous. hydrometeorological centres, from where it is made available to regional government Ongoing investments in new facilities and authorities and media. associated upgrading of plant, water recycling and effluent treatment technology has resulted Emissions levels are monitored and managed in a 6% reduction in effluent discharges per by the HSE teams at each plant and reported tonne of production between 2012 and 2013. back to the Plant Managers and Corporate HSE Department. Waste and emissions levels are governed by national and EU regulations, as well as our own management targets. These are monitored and managed by the HSE teams at each plant and reported to the Corporate HSE Department.
36 EuroChem Sustainability Report 2013 c ase s ase pro Bal W orking t orking dytu t t ic e ct S ea e e th o o material in a laboratory run by the Swiss-based Swiss-based the by run alaboratory in material Atkins the and laboratory aRussian in analysed were samples Hydromet the To reliability, ensure and the B quality water for responsibility with agency Government Russian the Hydromet, by jointly collected J in set second the and 2013 watersamplestaken were October first in The loads inphosphorous the water. high to attributed blooms algal of occurrence the Foundation’s Clean B J The into feeds EuroChem, by funded project, This system. treatment water the B the to loads phosphorous riverine calculate to order in plant, the of downstream and River, upstream monitor phosphorous concentrations in the L to Atkins engineering and consultancy environmental J in P our at system treatment run-off water surface new the of effectiveness Foundation since J We have been working with the J the with working been We have altic Sea. Atkins will also assess the operation of of operation the assess also will Atkins Sea. altic uly 2013, we jointly appointed the global global the appointed 2013, jointly we uly ritish scientists from Atkins. Atkins. from scientists ritish une 2012 to monitor the altic programme Sea to reduce anuary 2014. Samples were were 2014. Samples anuary hosphorit plant. As a result, aresult, As plant. hosphorit ohn N ohn ohn N ohn urminen urminen urminen urminen uga
HE by measured those with comparable are levels These J 2013 and October in 0.033mg/l and 0.023mg/l of levels showed 0.029mg/l in J 0.029mg/l P show concentration of phosphorous upstream of the B the sampling and analysis. the J company, certification A SGS. representative from Eutrophication, J Eutrophication, P Marjukka said Finland”, of Gulf the in working companies other corporate responsibility as a serves goodexample for its of execution rigorous EuroChem’s that Ihope sea. common our of quality the maintain to help can goals 2014, and shared this news showshow co-operation Y Finland of Gulf the of launch the “Following at the P commissioned was system runoff and treatment water hosphorit plant of 0.020mg/l in October 2013 and 2013 and October in 0.020mg/l of plant hosphorit oth sets of sampling results were comparable and and comparable were results sampling of sets oth ohn N L COM in 2012, immediately after the new new the after 2012, in immediately COM hosphorit plant. urminen Foundation was present for E anuary 2014. samples anuary Downstream orvari, Director, P Director, orvari, ohn N uroChem anuary 2014 respectively. 2014 respectively. anuary urminen Foundation. Sustainability Report 2013 37 Report Sustainability rojects on on rojects ear ear
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company ENVIRONMENTAL SUSTAINABILITY (continued)
Our environmental programme Targets and objectives Our current environmental programme is mapped Our strategic objective is to reduce our out from 2011-2015. The main aspects of the environmental footprint. In relation to each programme are as follows: indicator we aimed to achieve the following • Ensure compliance and continuously improve objectives in 2013: the environmental management and audit • Reduce atmospheric emissions over programme aspects of ISO14001. 2012 levels. • Further refine responsibilities and embed • Reduce volumes and hazard levels of environmental performance targets into industrial waste and increase recycling all levels of company operations, from over 2012 levels. corporate to individual units. • Reduce effluent emissions and increase • Refine and improve data collection and quality over 2012 levels. deploy best practice.
Key stakeholders Our environmental management system touches on all parts of our business and therefore we engage with many different stakeholders. Regional Co-operation agreements signed with regional government cover environmental and social responsibility. administrations Customers Our sales and agricultural teams advise our retail and wholesale customers on the safe and appropriate use of our fertilizer and chemical products. All our products carry the relevant safety and usage information as guided by international laws and best practice. Federal authorities Our production facilities are regulated and monitored by more than 20 government agencies in Russia, Kazakhstan and Belgium. We work closely with these agencies to identify sites for and analyse the outputs from our air quality monitoring stations. Shareholders Shareholders are updated on our environmental management indicators, chiefly investment, energy use, atmospheric emissions, fresh water use and effluent discharge. This is done through one-to-one meetings, via our website and annual reports. Suppliers/contractors We expect our suppliers to demonstrate best practice in relation to their own environmental management. We also ensure that all equipment supplied to EuroChem carries all appropriate safety and usage permits. All our contractors are instructed in and expected to comply with the requirements of our management systems. Trade unions Collective bargaining agreements are in place at all of our operating companies, including commitments to provide employees with all necessary guidance and equipment to comply with environmental management systems. Employees All employees are trained and certified according to their environmental responsibilities and specific management routines. Local communities Our community liaison team organises regular site visits for local communities to view environmental management processes. The data from our air quality monitoring stations is also made available via government agencies and local media.
Key environmental projects Kovdorskiy GOK Scoping study on improving waste water treatment. Phosphorit Commissioned Atkins to undertake sampling and analysis of waste water run-off (see case study on page 37). Lifosa Reconstructed aluminium fluoride workshop to reduce energy, reduce air emissions and enhance safety and the work environment. Reconstructed ammonia storage with automated controls to increase efficiency and safety.
More efficient catenary converter to greatly reduce SO2 emissions. Expand and upgrade phosphogypsum storage. New bicycle lanes constructed to the plant from the town. Novomoskovskiy Azot Started reclamation of former disposal sites for construction and inert waste. New ammonium nitrate plant with improved environmental controls, safety measures and energy efficiency. Improved system for controlling nitrous oxide emissions. Nevinnomysskiy Azot Upgraded effluent treatment plant, reducing emissions of ammonia by 40% and suspended solids by 25%. Modernised gas purification equipment. Feasibility study on recycling catalysts from melamine production. EuroChem-VolgaKaliy Second stage of solid waste management facility commissioned. Continued operation and development of environmental monitoring. HSE action plans written in line with Equator Principles. EuroChem-Usolskiy HSE action plans written in line with Equator Principles. EuroChem Antwerpen Improved dust monitoring and reporting system. Started improved Boron storage project. Started waste water cooling project. Re-use containers for exporting finished product. Tuapse Transhipment Ongoing communications with local community and environmental monitoring. Terminal EuroChem BMU Commissioned $10m heat recovery system in sulphuric acid plant, reducing natural gas consumption from 6.8 million m3 to 4.2 million m3 per annum. Process water recycling plant commissioned in 2012 – fully operational with zero discharges into waterways.
38 EuroChem Sustainability Report 2013 c ase s ase A LIFOSA IMPROVEMEN ENVIRONMEN T dytu T RADI – – ION
OF T T AL
reduced further to 340mg/m further reduced be will this investment, the with limit, current the While L While globally). achieved yet has operator no that target process, the L process, this to Related force. into comes it when limit new will be revised to 680mg/m to revised be will international I international the with complies that system management in encapsulated been a formalenvironmental has approach this 2003, Since management. environmental and robust effective necessitating years, many for Kedainiai of community the 2013. in I anniversary limit from such plants of 1,152mg/m of plants such from limit E current The requirements. emissions U of at a acid cost plant, sulphuric its upgrading L strategy, I exist. yet not do technologies recycling and re-use reduction, viable economically which for streams waste and emissions with dealing of ways at looking investment and innovations, while continuously ongoing with systems management class in best combines This environment. the to approach L L Our n 2013,fromEuroChem’s benefiting investment ifosa is representative of EuroChem’s whole whole EuroChem’s of representative is ifosa S$10m for the reactor alone, in line with new E new with line in alone, reactor the for S$10m ifosa plant in L in plant ifosa ifosa averages an emission that is half of of half is that emission an averages ifosa ifosa began the process of significantly significantly of process the began ifosa SO14001 standard. I standard. SO14001 ifosa engineeringifosa team has created ithuania celebrated its fiftieth fiftieth its celebrated ithuania t has co-existed with with co-existed t has 3 (a recommended recommended (a 3 , in readiness for the the for readiness , in n many ways, 3 of sulphur of sulphur U emission emission
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that are economically and technically feasible. technically and economically are that challenge The is tosolutions find products. usable atthat could generate solutions looking constantly L the and recycled is phosphogypsum global of 4% only Currently production. fertilizer with associated cost largest the far the by are materials raw as so, particularly is This material. this reprocess or re-use to ideal be would it practice, international best follows tailings the of storage the While was increased through a U capacity 2013 in their and zones bunded secure, in site on kept are tailings solid The phosphates). (DA phosphate diammonium make to material araw as (used production acid phosphoric of aby-product phosphogypsum, of volumes large A key challenge environmental for L grid. the into back sold also is site on generated electricity Excess community. local the within and site on heating for reused and captured is plant power onsite the by generated steam the example, For rise. to continue costs energy wider as important increasingly becoming which to is and energygeneration efficiency, L aluminium. of production the in used and sold is which acid, of production the from fluoride aluminium capturing for a system ifosa has traditionally taken an innovative approach approach innovative an taken traditionally has ifosa E uroChem S$3.5m investment. S$3.5m Sustainability Report 2013 39 Report Sustainability ifosa is managingifosa P ifosa team is is team ifosa ) and feed feed ) and
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company HEALTH & SAFETY
Our new Health, Safety Each employee is required to take responsibility HSE performance in 2013 and undertake to understand and comply with The number of lost time injuries decreased from and Environment Policy and requirements, to ensure colleagues are safe, 44 in 2012 to 38 in 2013, while the total Framework, adopted in 2013, to act according to guidelines, to know how to headcount continued to increase from 22,500 to use all relevant equipment and to communicate 22,600 in the same year. The associated Lost reflects our intention to become with managers and colleagues. The same rules Time Injury Frequency Rate (LTIFR) per 1 million a health and safety exemplar also apply to on-site contractors. The policy with man-hours decreased from 1.14 in 2012 to associated procedures also refers to workplaces, 1.00 in 2013. by 2018. equipment and machinery, preventive measures, investigations, environment and improvement. Despite our continued improvement across the How we manage health and safety health and safety spectrum, there were two fatal The policy applies to all our operational Health and safety priorities for 2014 injuries during 2013 – an employee at Eurochem sites, all employees and all on-site contractors. • Further define health and safety leaders’ BMU and a contractor at Usolskiy. These tragic Its implementation is monitored by the new roles and responsibilities events further confirmed our decision to build up HSE Department and performance fed into • Define and implement new reporting standards the environment, health and safety management function. It also strengthened our resolve to the management team and the main Board, • Implement incident investigation driven continue with the fundamental review of health as described on page 20. by root-cause analysis and safety systems and procedures, using best in • Improve contractor management, class experience and independent advice. Operational managers have responsibility for awareness and training health and safety on a site basis and they are required to set an example and identify health and safety champions, ensure that resources Lost-time injuries (employee) LTIFR per 1m man-hours are available, initiate systems and processes to 50 3 42 44 prevent accidents and incidents, achieve targets 40 38 36 38 2 and co-operate with other operational units. 30 1.11 1.05 1.17 1.14 1.00 20 22.5 22.3 1 19.2 20.3 21.3 10 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
LTIs Total headcount (’000)
Aspect Why it is important Who has a stake Indicator Health & safety We operate hazardous Employees, national and local Lost Time Injury Frequency Rate facilities which pose government, trade unions, suppliers, health and safety risks management, Board
Policies and guidelines Aspect boundary Internal Business strategy Our health and safety system applies to all operational production HSE Policy and Framework and logistics sites as well as sales operations in CIS. H&S laws and regulations in countries of operation It is not material for sales offices and our headquarters in Moscow. H&S Management System (compliant with OHSAS 18801) Equator Principles Industry best practice Du Pont expertise
40 EuroChem Sustainability Report 2013 01 02 03 04
NAME: Anastasia Lubyanova NAME: Justas Mazeika NAME: Christina Bauer NAME: Vitaly Sapon ny p a ROLE: SPECIALIST, PR DEPARTMENT ROLE: Repair and Installation ROLE: JUNIOR CONTROLLER, ROLE: Mechanic, Phosphoric
Foreman in the Machine Shop CONTROLLING & FINANCE Acid EXTRACTION PRODUCTION com WHERE I WORK: NevinnomysskIY MANAGEMENT DEPARTMENT r Azot WHERE I WORK: Lifosa WHERE I WORK: EuroChem-BMU Ou WHERE I WORK: EuroChem Agro MY VIEW: “It is hard for everyone at MY VIEW: “After graduating I decided MY VIEW: “I believe that a successful EuroChem to understand the whole to apply specifically to Lifosa, MY VIEW: “What I do is important career requires a commitment company, given its size and scale. because I believe that it is the best because I represent our company to hard work, personal responsibility Consequently, I help employees from company in the region.” externally through the figures that I and initiative.” other divisions understand what provide to the management team.” Story: Justas graduated from Story: Vitaly was invited to the plant goes on at Nevinnomyssk Azot y Gediminas Technical University, Story: Christina joined the dual by a EuroChem representative after t and I am pleased that my colleagues specialising in Industrial Engineering. study programme at EuroChem Agro his diploma at South Russian State bili take pride in being a part of a He was a finalist in the EuroChem in Mannheim. This innovative Technical University. After several in EuroChem’s family.” scientific and technical conference, programme takes three years to years in his current role, he is now sta u
made a video on the plant’s safety complete and is characterised by listed in the plant’s candidate pool s c and was a co-organiser of the alternating phases of theoretical for the position of Chief Mechanic. i om
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EuroChem Sustainability Report 2013 41 case study
In 2012, DuPont Sustainability Solutions conducted The project draws on world-renowned health BEYOND LEGAL a detailed review of the existing health and safety and safety techniques and focuses on leaders’ procedures at Novomoskovskiy Azot, one of our training, employee awareness and health and safety largest operations. This baseline assessment capacity building, over and above compliance with COMPLIANCE resulted in a company-wide project strengthening statutory requirements. The outcomes from the pilot our health and safety culture which is being piloted will be fed into a revitalised health and safety culture at Novomoskovskiy Azot during 2013-2014. across all our operations beyond 2014.
EuroChem Antwerpen has been manufacturing The VAPs meanwhile act as the link between the Safety fertilizers for almost 50 years; it therefore has production teams, the safety department and the site a long tradition of safety management. Its approach management. They motivate safety teams, report has evolved in line with new regulations, equipment and analyse incidents and undertake special tasks. knowledge and accepted best practice. Today it operates a Consequently, accident and injury rates at EuroChem robust system that complies with European Antwerpen are consistently very low and have been centres and legislation and is built around clear responsibilities, between 5-10 times lower than the industry average knowledge centres and ‘safety contacts’ or VAPs in Belgium over the past 20 years. ‘contacts’ (veiligheidsaanspreekpunt). The knowledge centres specialise in fire and explosions, process, transport, contractors, products at EuroChem and statistics and provides advice, safety tours, Antwerpen support, reviews and other services.
42 EuroChem Sustainability Report 2013 E yo ch for spor A Promo and safe t ch approa o heal o s grap t u ablis ng people t s s s ildren and ildren and t hic th ion e i ce hing ools chools t
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comprehensive local ice sports systems. systems. ice sports comprehensive local developing to crucial are and people young and children for schools sports ice of anetwork for abase as used are arenas new EuroChem’s Y of Council the of chairman I employees. all to distributed were which safety, occupational about comics publish and draw to decided they as Y the However, entrance to the plant. main the at as well as division and workshop each in placed were banners The behaviour. colleagues on responsible occupational safety their to example an show and responsibility encouragingbanners employees personal to take Y The oung Specialists at Kovdorskiy GOK created created GOK Kovdorskiy at Specialists oung t was the idea of Alexander Kunitsyn, Kunitsyn, Alexander of idea the t was oung Specialists did not stop there, there, stop not did Specialists oung oung Specialists and his his and Specialists oung
projects will be delivered across our sites. sites. our across delivered be will projects similar aconsequence, As plants. other from interest awards and generated considerable corporate 2013 our in safety industrial on project information corporate best the as recognised was initiative This later. out handed remainder the with booklets, the of 150 distributed had they minutes five Within work. for arrived they as colleagues their to out Y the and shop printing alocal in produced were copies 200 Some text. relevant added and comics the illustrated who Grinev, J colleagues N already been organised in N have schools figure-skating and Hockey children. 1,300 to up for training provide will and established be to are schools sports ice three least At evinnomyssk, and include newly built arenas. built newly include and evinnomyssk, ulia Akulicheva, Y Akulicheva, ulia E uroChem oung Specialists handed them them handed Specialists oung Sustainability Report 2013 43 Report Sustainability ovomoskovsk and ury B ury orzov and Denis Denis and orzov
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company SOCIAL RESPONSIBILITY
Human capital is as important Engaging with stakeholders as our physical asset base, Employees, including All employees are trained and certified according to their environmental whether in the form of young young professionals responsibilities and specific management routines. Local community Informal and formal meetings and site visits relating to investment professionals or the local representatives projects and environmental monitoring. community. Take people Environmental Consultation in relation to site operations and the results from away from EuroChem and organisations environmental monitoring stations. Universities and E-generation programme provides chemistry and engineering tuition we do not have a business, education institutions for school pupils, students and teachers. and so our relationships Local authorities Consultation and partnership to develop sports arenas, support health and with employees, communities education institutions and report on environmental monitoring activities. and other stakeholders are Non-profit Identifying those organisations that would benefit from financial support vitally important. organisations and volunteering input. Media Providing access to company spokespersons to inform community investments and environmental monitoring activity.
Training and education Aspect Why it is important Who has a stake Indicator Training and education The sustainable growth of our business The Board, employees, Investment in training centres is predicated on our ability to attract and education institutions Training partnerships retain talent, particularly our cohort of Teaching standards young professionals.
Policies and guidelines Aspect boundary Human Resource Policy Internal and external E-generation programme We are working with external educational institutions to enhance Employment laws in countries of operation opportunities for potential recruits and our employees. Industry best practice
44 EuroChem Sustainability Report 2013 communicate with schools and universities. and schools with communicate wealso and in keyregions, parents their and programmes to students and competitions the promote to used are media regional and national and their teams. All Communications and Resources Human of Director, Heads Administrative by our managed are programmes development trainingprofessional and All support. social and development training, incentivisation, remuneration, bonus structure, companies and focuses on recruitment, operating all our to applies policy The targets. and priorities and quantitative sets and qualitative a16-yearover I cycle. operates and strategy business the with aligned is that policy Resources aHuman to all work They in Moscow. Resources Human of Head our into report they and companies in our Departments Resources Human the by co-ordinated are programmes training All education and training manage we How motivated and informed students into universities. into universities. students informed and motivated of intake the reduces This in schools. facilities highquality of lack and competence teacher of levels low the in reflected is this subjects; and engineering technical opting to study are people young fewer that We know growth. this support to weneed that talent technical and engineering of kind the of ashortage faced wehave internationally expanded and capacity in new investment our wehave accelerated As D eveloping talent and enhancing skills enhancing and talent eveloping t determines key indicators keyindicators t determines
sustainable future for our business. our for future sustainable a will underpin who professionals’ ‘young are chemical and mining engineers. I 2,000 which of 6,000, of base employee on-site an require projects potash two our example, for personnel; skilled for demand projected our meet to necessary is This engineers. 1,000 afurther will recruit and programme B 2003. since engineers 1,300young of recruitment the to led has and industrialisation’ of new the leaders is called‘E-generation: programme This lift). (career employees and recruits our of skills the developing and incubation) competence (professional enhancing teachers’education, capabilities university through in schools intervention early chain’ ‘value from employee in the invest to decision astrategic wemade Consequently goal. strategic HR graduates has become akey and students Working with have responsibility. more reformed that so people being is design Organisational moment in strategy. HR the at implemented being changes big several are There prospective employers. prospective are that businesses into and schools into links developing in pro-active been not have and under-resourced also are latter The etween 2014-2016 we are accelerating the 2014-2016 the etween accelerating weare t is these t is these
is filling with its E-generation programme. E-generation its with fillingis EuroChem that avacuum left has This pathways. technical/scientific other and chemistry promote that operation of countries other in our and in Russia policies government limited are There • • • • training: and education of areas four in gaps fill to designed is programme The Antwerpen. EuroChem of launch the through B as such into new territories Russia R than I n 2013, the budget for the programme was more more was programme the for n 2013, budget the environment. industrial in an grounding asolid them giving and relevantgraduates qualifications with in recruiting by difficulties characterised is in smaller enterprises experience Work business. and government by both taken view term and generally a short transfer technology and solutions process imported of use growing the by is characterised research Scientific industry. with links poor and facilities of lack research, weak by characterised is university at Chemistry education. higher with links poor and facilities of lack teachers, qualified declining interest, provision, poor inadequately by is characterised at school Chemistry 100m and its reach expanded beyond beyond expanded reach its and 100m UB E uroChem Sustainability Report 2013 45 Report Sustainability elgium,
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company SOCIAL RESPONSIBILITY (continued)
The programme in action Working with universities Developing employee capabilities The programme has three main elements: We have teamed up with seven Russian We operate seven professional training centres 1. p re-university training, motivation of pupils universities to offer scholarships and specialist which provide access to courses on a wide and identification of talented individuals. engineering training to students with a view range of topics. In 2013, 63% of all employees 2. long term collaboration with higher education to them joining EuroChem after graduating. benefited from training at these centres. institutions on relevant education, corporate These institutions are Moscow State University, scholarships and practical training. D. Mendeleev University of Chemical Technology Our succession planning programme provides 3. EuroChem’s network of professional of Russia, Moscow State University of ongoing up-skilling of employees that will fill training centres. Environmental Engineering, Moscow State senior positions when they become available. Mining University, South-Russian State There are currently more than 250 employees Working with schools Technical University, Ivanovo State University fully trained and ready to fill senior positions. We fund a network of 29 laboratories in schools of Chemistry and Technology and Perm State and technical colleges that focus on chemistry, Technical University. Plans for 2014-15 natural sciences and environmental studies. Over the next two years we intend to: Operating across seven Russian regions, the In 2013, 68 students were studying under the • Extend the scale and scope of the laboratories provide a pathway for school students scholarship programme, with plans to involve a programmes, involving new institutions and to enrol on university chemistry courses under a further 200 students. In 2013, we also sponsored academics from other disciplines. scholarship scheme. Over 120 students benefited 120 students through specialist training at one • Enhance the levels of co-operation between from the programme in 2013. of the partner universities, which – with the intake the universities and with EuroChem. from previous years – means that there are over • Enhance teachers’ professional development 300 young people currently involved. We organise annual workshops for chemistry workshops and promote greater interaction and natural sciences teachers that allow them to between schools and universities. explore new methodologies in order to enthuse Recruiting motivated graduates and engage their students. These are tutored Graduates from these training programmes join by senior staff from our partner universities, in EuroChem on a three year ‘Young Employee’ particular the Moscow State Mining University and programme that offers them support from the Chemical Faculty of M.V. Lomonosov Moscow professional tutors, a fast track to careers across State University. the company and the chance to network with their peers at meetings. Three hundred graduates benefited from the programme in 2013, with seven attending meetings.
46 EuroChem Sustainability Report 2013 c ase s ase driving for driving e th are ‘ AN E Ou U dytu ROCH EM T r people people r WERPEN
– – ce’
• • continuity business • maintaining areas: core three on focused has team 2012,Since management Antwerpen’s EuroChem a common approach and co-operation. B EuroChem, by U Operating Technical This plant). B by maintained and operated are but EuroChem to belong site on plants acid nitric Three maintenance. and utilities services, toemergency are made share agreements whereby B with closely work to continues Antwerpen A of annum per NP of annum per tonnes 1.25 million produces and people 370 B in Antwerp of north B of operations I n April 2012, EuroChem took over the fertilizer fertilizer the over took 2012, EuroChem n April such as I as such systems group EuroChem with integration B within stayed finance and HR as such ‘site-services’ for working those all and Antwerpen EuroChem to over moved assets production the operating (employees organisation asustainable up building ASF) T. K fertilizers and 1.025 million tonnes tonnes 1.025 million and K fertilizers ASF on a 598 hectare site to the the to site hectare a598 on ASF N ASF and their employees to provide provide to employees their and ASF /CA ASF (together with a fourth afourth with (together ASF fertilizers. EuroChem EuroChem N fertilizers. elgium. The facility employs employs facility The elgium. nit has been set up up set been has nit ASF, ASF,
fertilizer production in Antwerp. in production fertilizer of years 50 celebrate 2016 will in we addition I employees. former many and current all for event afamily with marked be will that a milestone 2014,in anniversary fiftieth its celebrates site The across the group. B in tournament football sponsored aEuroChem in part I rides! training daily on worn proudly be to continue shirts cycling branded their and EuroChem to commitment a expressing of way their was This Ghent). of asuburb being (Moscou back’ and ‘Moscou I R in the immediate period after the purchase in 2012. in purchase the after period immediate the in company the left employees no almost that ensure to efforts management teammade significant The n August 2013, EuroChem Antwerpen took took Antwerpen 2013, EuroChem n August to 155 km cycled employees 2013, 35 n April ecent initiatives elorechensk, Russia for teams drawn from from drawn teams for Russia elorechensk, E uroChem Sustainability Report 2013 47 Report Sustainability n n
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company SOCIAL RESPONSIBILITY (continued)
Employee relations Aspect Why it is important Who has a stake Indicator Employee relations As we grow internationally this is crucial, The Board, employees, suppliers, Management to employee ratio given we have over 22,000 employees. national and local government, Employee turnover utilities, communities Revenues per employee Production per person Personnel costs
Diversity and equality Diversity and equality We employ more than 22,000 people, The Board, employees, national and Level of investment representing more than 50 different local government, communities, Employee numbers nationalities, working in 19 countries. education institutions Percentage of women in The work is demanding and requires a high management positions level of co-operation and communication.
Remuneration Remuneration In order to attract and retain the best people, we The Board, employees Variable remuneration aim to pay wages that are above average for the Fixed remuneration sector in each operational territory. Average full-time equivalent wage Changes in average monthly wage
Policies and guidelines Aspect boundary Human Resource Policy Internal Employment laws in countries of operation Employee relations, diversity and equality and remuneration are important Industry best practice measures of management competence and success.
We employ more than 22,000 people at 2012 2013 18 operational sites in Russia, Lithuania, Belgium Full-time equivalent employee numbers (people) 22,119 22,327 and Kazakhstan, with sales and distribution sites in a further 12 countries. In 2013 we began new Management to staff ratio (%) 12.6 12.9 developments in Kazakhstan and China, with Staff turnover at production facilities (%) 5.0 4.6 a further site in the USA at the planning stage. This growing geographic reach and continued Group revenues per employee (RUB m/person) 7.5 7.9 need for skilled people means that we need to Productivity per main type of product per person, average (tonnes) 1,471 1,603 create an excellent working environment for our employees. Number of employees receiving professional training 12,607 14,280 Number of participants in ‘Young Specialists’ programme 300 325 Our approach to employee relations, Personnel costs (RUB m) 16,499 19,017 diversity, equality and remuneration Our Head of Human Resources based in Moscow Women in management positions (%) 39 41 oversees the work of Human Resources managers Gender diversity (%) 30 30 in all our subsidiary companies. Variable remuneration (RUB m) 3,562.7 4,796.2 We comply with all relevant labour laws upholding Fixed remuneration (RUB m) 12,936.3 14,220.8 the rights of employees, including the Labour Average full-time equivalent wage (RUB/month) 41,068 48,283 Code of the Russian Federation and international labour conventions. We do not use forced, Changes in average monthly wage (%) 17.0 17.6 compulsory, child or agency labour and respect all human rights under those laws and conventions.
48 EuroChem Sustainability Report 2013 with communities with *including more than R than more *including (R charities and projects associated in communities, Investment investment projects. to identify government and community representatives local with closely work and salaries leading industry pay obligations, tax all local meet also but employment, stable provide to only not undertake we where towns have a presence. We therefore the of most of viability the to crucial are operations Our strategy. business our of akeypart is health and housing facilities for localcommunities developing of form in the responsibility Social O Aspect I operation of in laws countries Employment Human Policy Resource P Local communities ndustry best practice best ndustry ur approach to working olicies and guidelines and olicies charities. The event was themed around a story by by astory around themed was event The charities. childrens’ local for funds raised turn in which organised teamAzot building a sports-based event, I Sp n the summer of 2013, employees at N at 2013, of employees summer n the he teams orts 2006 356 300m (> 300m UB lp l lp oca Why it is important is it Why environments and local economies. and local environments local on impact have asignificant can operations its and employer asignificant is EuroChem U S$ 10m) to construct multi-sports facilities in Kedainiai and B and Kedainiai in facilities multi-sports construct to 10m) S$
l char 2007 470 evinnomysskiy evinnomysskiy i t i es
interest, intrigue and a high level of participation. of level ahigh and intrigue interest, of deal agreat created This Thunder’. of ‘A Sound Ray B writer, fiction science American and rehabilitation facilities for our employees, sports recreation, wehave created Where million one people. than more of population L Russia, in 11 in ongoing and cities and completed towns and private- (public-private I with communitycontact representatives. in teams management plant and corporate Director, based in Moscow, who liaises with Administrative by our co-ordinated are projects B the of control the under are projects associated and investments such importance, strategic their Given 2008 nvestments are made on a co-financing basis basis aco-financing on made are nvestments 449 ithuania and B and ithuania m) UB oard of Directors. I Directors. of oard 2009 203 elgium, with a combined acombined elgium, with Who has astake has Who institutions, communities, suppliers communities, institutions, government,educational local B The and services is a strategic issue for EuroChem. for issue astrategic is services and infrastructure local of development and communities with relationship The E boundary Aspect N xternal GO) and projects are are and projects GO) elorechensk plus ice sport arenas in N in arenas sport ice plus elorechensk oard, employees, national and and national employees, oard, radbury – – radbury ndividual ndividual 2010 418
with R with 2001, since charities and projects associated R all authorities. government relevant and experts/academics international stakeholders, company, relevant the including outside and within from scrutiny to open are partners community local with in conjunction wemake that decisions All heating scheme. adistrict into fed is plant power on-site the from I are made also availablethese residents. to local in 2013. in n some cases, for example, at L at example, for cases, n some 3.8bn has been invested in communities, in communities, invested been has 3.8bn UB 2011 889m (more than U than (more 889m UB 455 evinnomyssk and Kingisepp. and evinnomyssk E uroChem I government and communities and government L L ndicator evel and type of partnerships with with partnerships of type and evel investment community of evels Sustainability Report 2013 49 Report Sustainability 2012 516 S$ 25m) invested invested 25m) S$ ifosa, excess heat heat excess ifosa, 2013 889*
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company case study
EuroChem has partnered with the Russian Ministry public skating as well as offering a high quality A new ice of Sports, the Stavropol Territory Government tournament venue and a winter sports school for and the Nevinnomyssk Administration to create children and young people. The stadium has been a state-of-the-art hockey and figure skating arena, built as part of a three year programme to develop sports arena (the first of its kind) in the Nevinnomyssk region of childrens’ sports in concert with the Ministry of Southern Russia. Built at a cost of RUB311m, the Sports of the Russian Federation. arena can seat 600 spectators and will be open for
EuroChem’s Lifosa plant celebrated its fiftieth Organisations from outside the region are also Lifosa anniversary in 2013 with the opening of a planning to use the arena for a wide range of events. US$ 7.7 million multi-sports arena in Kedainiai, This is the first such facility funded by EuroChem Lithuania. The arena can accommodate over outside Russia and it fits into the company’s strategy celebrates 2,000 spectators for sporting competitions and of developing the sporting skills of young people 3,000 for concerts and other events. It can be in communities near to where we operate. 50 years with a readily configured with three basketball courts and, as a consequence, has become the base for the new community local team and has hosted the national team and tournaments. sports arena
50 EuroChem Sustainability Report 2013 c ase s ase design f Eu for G h ice Boos u olden D nded bu nded dytu o t ckey ing ju ing roC iploma iploma em hem ilding ilding nior nior with EuroChem facilities. N and Kingisepp B in Antwerp Finland, in Espoo from teams brought together tournament arena. The N in tournament hockey ice junior Cup’ ‘EuroChem I team was awarded the Golden Diploma in the the in Diploma Golden the awarded was team Art’ ‘Green sponsored EuroChem the and judged were planning projects urban and restoration Design, as cityand regional authorities from South Russia. organisations, companies, construction as well project architects, included participants 200 The Volgograd. in held was Russia of South the I n March 2013, we hosted the inaugural inaugural the 2013, hosted we n March Forum of Architects of of Architects of Forum XI 2013, the n May ovomoskovsk, at the EuroChem-built ice sports sports ice EuroChem-built the at ovomoskovsk, ovomoskovsk in Russia – all places places –all Russia in ovomoskovsk elgium, elgium,
teams from Germany and Switzerland. and Germany from teams including players, junior of pool expanded an include will and underway 2014 well is Cup EuroChem the P awards. present to hand on were players L category ‘The B ‘The category and L and I of Kotelnikovo. Capital ‘Complex The District Vostochny the in Hotel Crystal the of design design sector. urban the in work best the as recognised was of Kotelnikovo’ in project District Vostochny the egendary Russianegendary world champion ice hockey andscape Arrangement of Quarter 15-2 Quarter of Arrangement andscape E est Work of the I the of Work est uroChem Sustainability Report 2013 51 Report Sustainability nterior’ for its its for nterior’ mprovement mprovement lanning for for lanning
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company INDEPENDENT ASSURANCE OF NON-FINANCIAL REPORTING
For the attention of EuroChem 5. Assessment of the extent to which the Report • We took into account the results of the external Mineral and Chemical Company OJSC meets the A+ application level (the Company’s audit undertaken in respect of the integrated and its stakeholders self-declaration) in accordance with the GRI. quality management system, the environmental 6. provision of guidance on the preparation of management system, and the occupational Introduction corporate public non-financial reporting in the health and safety management system, future. certified for ISO 9001, ISO 14001, and OHSAS This audit assurance relates to the 2013 18001 international standards. Sustainability Report of EuroChem Mineral and Chemical Company OJSC (hereinafter the Assurance type and level • We reviewed a selection of media and internet “Report”). The Report was prepared by EuroChem The Report assurance is based on the following data referring to the Company’s assurance Mineral and Chemical Company OJSC (hereinafter provisions of the AA1000AS (2008): activities, and third-party statements describing the “Company”) responsible for collecting, • Assurance type: 2 (Type 2 – Accountability the Company’s commitment to its values of summarising and presenting the information Principles and Performance Information), corporate social responsibility, as evidence to included in the Report. Bureau Veritas intended to assess a company’s compliance verify the validity of the statements made Certification Rus is responsible for the work with all of the above-mentioned reporting in the Report. undertaken to provide assurance for this Report principles and to evaluate the credibility of the • We reviewed the draft version of the Report to only to the Company, and is not responsible for performance indicators (data, statements) identify potential inaccuracies, inconsistencies any assurance-related decisions made, delayed included in the Report. and unsubstantiated statements. or revoked by any third party. • Assurance level: moderate. • We verified the information published on the Company’s corporate website against the Assurance scope Assurance methodology and coverage AA1000APS (2008), AA1000SES (2011) and The assurance process is based on the • We interviewed the Company’s top executives the GRI recommendations. methodology formalised in the AA1000 and employees to identify how the Company • We evaluated the availability of the Report Assurance Standard (AS). accounts for key aspects of its corporate social to all stakeholders, and the effectiveness of the responsibility when building a long-term existing feedback mechanisms. During the assurance process the Bureau has set business strategy, and how these aspects are and successfully resolved the following tasks: integrated into the Company’s business We verified the adequacy of a number of 1. Assessment of the 2013 Report’s compliance processes. representations, statements and data included in with the principles of inclusivity, materiality • We confirmed the achievement of the 2013 the Report by applying the social reporting and responsiveness set forth in the AA1000 objectives in corporate social responsibility set assurance procedures and guidelines of Bureau Accountability Principles Standard (APS) by the Company in its reports for preceding Veritas Certification Rus, including: 2008. periods. • A visit to the Company’s head office in May 2. Assessment of the quality and extent to which • We assessed the Company’s internal regulatory 2014 to interview top executives and specialists the Company’s stakeholders were engaged in documents (corporate policies, procedures, on significant economic, social and the Report preparation in accordance with the standards, guidelines, regulations, etc.) and environmental issues included in the Report; AA1000 Stakeholder Engagement Standard data arrays (including primary sources of • An on-site visit made in May 2014 to review (SES) 2011. information) defining the effectiveness of the the production and social infrastructure 3. Assessment of the extent to which the Company’s responsible business practices in facilities of Phosphorit Industrial Group LLC, Company progressed in introducing the corporate social responsibility. a subsidiary of the Company located in principles of the Global Reporting Initiative Kingisepp, Leningrad Region. During the visit Sustainability Reporting Guidelines (GRI), Rev. • We assessed the effectiveness of the Company’s management approach with regard we held meetings with the Administrative G4-2013, in defining the Report’s contents Director and management of the HSE and ensuring its quality, including sustainability to economic, environmental and social performance. Department, HR Department and Public context, completeness of coverage of material Relations Department. We inspected the • We assessed the processes of the Company’s topics and indicators, balance, comparability, defluorinated feed phosphate production unit, interaction with its stakeholders during the accuracy, etc. observed manufacturing processes, spoke with reporting period, with a view to evaluating the 4. Assessment of the adequacy and reliability of the personnel on site, and inspected amenity criteria and procedures for the selection of systems and processes employed by the rooms in the production unit. We had a meeting material economic, social, and environmental Company to collect, summarise, handle, with the municipal authorities, including the aspects to be included in the Report. analyse and record the data included in Chairman of Kingisepp’s Committee for Culture, the Report. Sports and Youth Policy, Head of General and Administrative Department of the Municipal Administration and the senior coach of the
52 EuroChem Sustainability Report 2013 Standard, principles of defining contents and and contents defining of principles Standard, AA1000A inclusivity, materiality and responsiveness of of principles the to adherence Company’s the to as level assurance moderate the under made be to conclusion a for basis asufficient provides N of allpossible misrepresentations. of identification purposes the for exhaustive considered be cannot by us performed work assurance the Report, in the contained indicators quantitative Regarding level). (high data allof verification complete a than guarantee of level alower gives assurance level moderate the of part as out carried Report the in information selected of verification The limitations. and existing confidentiality industry Company’s the to specific issues account into took We verification. of methods analytical using data public other and data, statistical statutory divisions and P its executives, top company’s management the by provided information aggregated and initial the I opinion our of Basis Company. the of website corporate the on published officially was full of Report version the the before procedures assurance our We began www.kingisepp-mo.ru/). and www.nmosk.ru/ (www.nevinsk.ru/, operations Company’s the of regions in the administrations municipal of sites web official and Gorod-Kingisepp.rf), and information P P i (Energetika agencies press and media analytical B Vostochniy P (Saint Vesti Vedomosti, regional press (EuroChem’s newspaper, corporate and local federal, in the www.eurochem.ru/, at website corporate Company’s the on published information the on relied we also to I n the preparation of our assurance we analysed weanalysed assurance our of preparation n the in addition assurance, our of preparation n the ravda and Ekologicheskiy Dozor), on on Dozor), Ekologicheskiy and ravda Ekologicheskaya AK&M, Rossii, romyshlennost evertheless, the data collected by the assurer assurer by the collected data the evertheless, the information contained in the Report, we visited the I the we visited I Company. the of employees young for housing of site residential construction a children’s visited We team. also hockey the Company. the the war memorial erected and maintained by by and maintained erected war memorial P web portals (Kingisepp Segodnya Segodnya (Kingisepp web portals S (2008) Accountability P Accountability S (2008) ereg (Kingisepp), by cross-industry by cross-industry (Kingisepp), ereg hosphorit I ce P ce alace sports centre and and centre sports alace etersburg) and and etersburg) ndustrial Group LL
rinciples rinciples n addition, n addition,
C, the • • • • • • the Report: on opinion general our express to in aposition are we work, our of scope the account into taking and Following the adopted assurance methodology report the opinion on General GR the and Standard Assurance Sustainability (2008) AA1000AS with in accordance indicators performance ofsustainability disclosure its of quality the and Report, the of quality its operations. its of part them to respond promptly and aspects material of in respect expectations stakeholder improve to related identify processes; and manage plan, to operations; of aspects environmental and social key economic, management enableitto that identify systems effective adopted has Company The Report. the of understanding abetter ensure text the supporting diagrams and Graphs terms. technical and acronyms for explanations contains I details. unnecessary into going without information, sufficient stakeholders offers Report The balanced. and informative accurate, adequately are and language in simple B report. aGR and report –asustainability sections two has Report The issues. previous its with consistent is Report the of structure The mitigation of non-financial risks. aiming development strategy at sustainable the implement to atool as Company the social responsibility is continuously viewed by Corporate period. reporting in the strategy responsibility social corporate its strengthen and improve to continued has Company The data. public other and Report the in disclosures quantitative with consistent are responsibility activities. Qualitative statements information transparency of social corporate its higher for strive to continues Company The operates. Company the which environmental and economic conditions in social, the and performance demonstrated the Company’s strategy, governance, corporate interdependencies reflects between Report The reporting. the purposes of non-financial corporate public for trends development its and period, reporting in the indicators performance and key events Company’s the reflects accurately Report The Guidelines. oth sections of the Report are written written are Report the of sections oth t t G4 I G4 • • • P of AA R • • • • rinciple 1: Inclusivity rinciple eport complianceeport with principles handling, formats. interaction open and other and claims requests written verifications, and audits publications, media website, and newspaper Company’s the fairs, trade negotiations, interviews, releases, press reports, news management personnel, and operating the with executives top subsidiaries’ its and Company’s the of meetings Report, this including reports, are stakeholders with interacting and communicating of means principal The required solutions. the for in searching and process, engagement the in identified aspects all material in addressing approach aligned and consistent I methods. engagement optimal and areas keyinterest stakeholders’ and groups, defined these engagement with for responsible persons appointed groups, stakeholder 13 identified has Company The inclusion in the Report. for information preparing when account into taken were keystakeholders of interests the that demonstrate weobtained data indirect and direct the and Report in the presented information The Company in the final draft of the Report. the of draft final in the Company the by rectified were and performance, Company’s the about conclusions make to ability stakeholders’ the affect nor Report in information the the distort inessential, neither are discrepancies and inaccuracies These disclosures. in quantitative discrepancies and inaccuracies minor weidentified Report, the of draft preliminary the assessing randomly While long-term strategy, risks and opportunities. Company’sthe chain management, influence including development, of sustainable supply keyaspects the how demonstrates Report The the Report. responsibility and directly involved in preparing social corporate of principles the to committed are executives top Company’s The policies, procedures and resources. mission, Company’s by the supported fully theby management are reporting non-financial P rocesses androcesses controls for preparation of public 1000 E uroChem APS (2008) (2008) Sustainability Report 2013 53 Report Sustainability t employs an integrated, integrated, an t employs
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company INDEPENDENT ASSURANCE OF NON-FINANCIAL REPORTING (continued)
• The Company has many years’ track record • The information provided on the material • The Company responds to the needs of the of preparing sustainability reports with direct aspects of the Company’s sustainable regions where it operates through a wide range involvement of stakeholders, and ensures development can be easily traced back to the of social initiatives and projects. The Company’s year-by-year consistency and transparency processes of its selection, processing, enterprises are major contributors to the of the reporting process. transmission, and presentation. Inaccuracies of development of the regions of their operations, • Stakeholder engagement processes used to the initial data used by the Company to prepare both as major taxpayers and employers. The make decisions when preparing the Report are the Report are within tolerable limits. key efforts of the Company in the reporting in line with its scope and limits. • The Report reflects important events occurred period were focused on activities to develop the in the reporting period and capable of creative potential of children and teenagers and Principle 2: Materiality influencing the decision-making process and support junior sports, health, environment, • The Company continues to apply consistent behaviour of stakeholders towards the culture and vocational training projects. methods and procedures to identify material Company as well as notable impacts on the • The public right to enjoy a favourable aspects related to its operations, products, economy, environment and society. environment is ensured by the Company’s services, regions of operations and • Based on the analysis of the data contained in planned environmental activities and ongoing subsidiaries. In addition, the Company the Report and our interviews, we cannot point environmental risk management. The Company continuously updates all material aspects to any material aspect of corporate social has introduced a system of environmental throughout the reporting period. responsibility relevant for the Company’s management in line with the ISO 14001:2004. • The Report offers a balanced and well- stakeholders that was overlooked or wrongly Environmental aspects have always been a part grounded presentation of material economic, excluded from the Report. of the Company’s managerial and investment social and environmental aspects of the decision-making processes. Production sites Company’s operations from the stakeholders’ Principle 3: Responsiveness have ongoing environmental controls in place. point of view. The Report presents a list of • We are currently unaware of any areas that could The Company continues to support air 2013 key events in the sustainability context. have been, but were not, disclosed in the Report monitoring programmes in its regional locations. • When identifying material aspects, the and where the Company would not be able to • We are currently unaware of any areas that Company relied on its external and internal respond to stakeholders’ reasonable requests. could have been, but were not, disclosed operating conditions, risks, key success • The cornerstone of the Company’s operations in the Report and where the Company would factors, laws and other regulations having is its focus on consumers. A strategic priority of not be able to respond to stakeholders’ strategic importance for the Company and its marketing and distribution policies is to reasonable requests. its stakeholders. ensure guaranteed domestic and international • The Report focuses on the Company’s youth supplies of mineral fertilizers of the required Report compliance with the GRI guidelines policy as a priority area and an essential driver of quality. The Company is committed to The Report takes into account the the Company’s long-term strategic development. improvement of its quality management system recommendations of the GRI G4 (the fourth • The emphasis in the Report on certain subjects in accordance with ISO 9001 and innovation- generation of the GRI’s Sustainability Reporting reflects their relative importance (materiality) based construction and technical upgrades of Guidelines). The Report covers all standard GRI for the Company. its production facilities. reporting elements and the required number of key GRI performance indicators to meet the A+ • The Company displays an understanding of the • The views and expectations of the Company’s application level. The table of GRI Guidelines concepts of corporate social responsibility and shareholders are taken into account by indicators presented in the Report accurately sustainability, using objective information in incorporation into the corporate governance reflects the actual disclosure level. The principles covering various subjects in its Report. framework. The Company views the of defining contents and quality of the Report, • Information and data are displayed in the improvement of its corporate governance and operating transparency as one of the key including the sustainability context, timeliness, Report in a format that helps users to identify balance, comparability, accuracy, reliability, clarity, existing trends in the Company’s performance, focuses of its long-term development strategy. • The interests of the Company’s employees are etc., have been duly followed. Absence of detailed its achievements and, in part, unresolved information on certain GRI performance indicators economic, environmental, and social issues. taken into account in the collective agreements entered into between the management and the in the Report is explained by the Company’s trade union committees (working committees) current effort to accumulate statistics to support of the Company and its subsidiaries them. Besides, the Company believes that certain and affiliates. performance indicators are immaterial for stakeholders and can therefore be omitted in the Report.
54 EuroChem Sustainability Report 2013 • • • • • limitations Assurance is regularlyefficiency measured andassessed. engagement engagement. The stakeholder of methods best the and priorities identify to them using stakeholders, its of expectations and needs keyinterests, the updates and monitors regularly Company The needed. resources the receive and defined are clearly engaging stakeholders with in employees and executives top Company’s Responsibilities and of areas the of authority wellpreparation of in reports corporate advance. in the part take to engaged are Stakeholders map. astakeholder updates constantly and develops Company The etc. influence, responsibility, a multi-criteria approach based on dependence, stakeholder identification methodology relying on the maintain to continues Company The (2011). AA1000SES of requirements the to corresponds in general of public accountability process The AA1000S with in accordance E xtent and quality of stakeholder engagement engagement stakeholder of quality and xtent the Report. of held during preparation the public hearings) meetings, (dialogue events public of assurer the by attendance involve not did stakeholders with Company’s interaction the of verification The date.reporting the of as Company by the immaterial deemed are they if Guidelines Reporting Sustainability GR the of indicators performance account into take not does assurance The future. in the actions any to take intentions or beliefs, assumptions, expressing theCompany’s opinions, statements cover not does assurance The auditors. by other independent verified indicators financial to apply not does assurance The cycle. reporting 2013 the beyond indicators performance the to apply not does assurance The E S (2011) I ’s • • • • • • • • global best practices the with in accordance reporting non-financial Recommendations public for corporate relevant mineral for the and chemical industry. indicators performance industry-specific of alist stakeholders, with jointly Develop, operates. Company including in regions discussions the where development, of sustainable aspects significant most the over stakeholders with discussions public holding of practice the Expand Company’s operations. of Continue developing infographic practices in Company’sperformance the influencing risks I development targets. inand negativetrends meeting sustainable P aspects. material identified the to related impacts or performance social and environmental economic, Company’s the reflecting indicators disclosed of list the Expand reports. in previous out set commitments and plans against performance its and subjects, Company’s actions to address these raised the period, reporting in the Company the with interacting when by raised stakeholders subjects I years. few next the for plans – year next the for –plans completed tasks information inReport the following sequence: ncrease the disclosure level in respect of key key of in level respect disclosure the ncrease ncrease attention towards key impacts and and keyimpacts towards attention ncrease rovide balanced disclosure of both positive positive both of disclosure balanced rovide sustainable development. sustainable disclosing material aspects of the of the aspects material disclosing Moscow I P L Mityashin, Vladimir • • competence and independence,on impartiality V by Bureau Statement B Assurer • 31 May 201431 May RCA N RCA h.D. in Economics in h.D. ureau Veritas Certification Rus C Rus Certification Veritas ureau auditor. B athird-party of assessment independent an is Assurance this that declares officially B etc.). responsibility, social and safety, stewardship,health environmental management for quality, systems occupational as (such systems management of various of providing on accredited services certification professional company with an 180-year history B global practices in their work. in their practices global best the and procedures internal our apply and industries incompanies’ different operations of aspects social and environmental along with the of knowledge economic, assurance of public non-financial reporting in independent record track years’ have many C Rus Certification provided.services assurance the for except Company, the of business in the interest commercial no has Auditors engaged by B engaged Auditors ureau Veritas Certification Rus C Rus Certification Veritas ureau isindependent ureau an international Veritas o. 01191213 E ureau Veritas Certification Rus C Rus Certification Veritas ureau uroChem eading Auditor eading J Sustainability Report 2013 55 Report Sustainability SC are duly qualified and and qualified duly are SC eritas Certification Rus Rus Certification eritas ureau Veritas Veritas ureau J SC J SC SC J SC SC
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Summary table of standard disclosures under GRI G4 reporting
The Global Reporting Initiative (GRI) is a global, Indicator Response multi-stakeholder organisation that has developed STRATEGY AND ANALYSIS guidelines for sustainability reporting. Known as G4-1 ✓ the G4 Guidelines, these include a list of indicators G4-2 ✓ that companies should consider reporting against. ORGANIZATIONAL PROFILE The index below lists each of the GRI G4 G4-3 ✓ indicators, whether we report against them. G4-4 ✓ G4-5 ✓ G4-6 ✓ G4-7 ✓ G4-8 ✓ G4-9 ✓ G4-10 ✓ G4-11 ✓ G4-12 ✓ G4-13 ✓ G4-14 ✓ G4-15 ✓ G4-16 ✓ IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-17 ✓ G4-18 ✓ G4-19 ✓ G4-20 ✓ G4-21 ✓ G4-22 ✓ G4-23 ✓
56 EuroChem Sustainability Report 2013 G4-55 G4-54 G4-53 G4-52 G4-51 G4-50 G4-49 G4-48 G4-47 G4-46 G4-45 G4-44 G4-43 G4-42 G4-41 G4-40 G4-39 G4-38 G4-37 G4-36 G4-35 G4-34 GOVER G4-33 G4-32 G4-31 G4-30 G4-29 G4-28 RE G4-27 G4-26 G4-25 G4-24 STAKEHOL Indicator I P Fully reported Response Key: nformation not reported (not considered material considered to business operation) (not not reported nformation artially reported artially P ORT P NA ROF DER E CE IL E NGAGEME N T Response
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ETH Indicator G4-EN Materials G4-EN G4-EN G4-EN8 Water G4-EN G4-EN G4-E G4-EN G4-EN Energy G4-EN D G4-58 G4-57 G4-56 CATEGOR G4-EC9 Practices Procurement G4-EC8 G4-EC7 Indirect Economic Impacts G4-EC6 G4-EC5 Market Presence G4-EC4 G4-EC3 G4-EC2 G4-EC1 Economic Performance CATEGOR byIndicators Aspects G4-DMA Y www.eurochem.ru/reports/sustainability-reports at website our 2013 on ISCL ou can find the complete GR complete the find can ou I CS A N5 OS 1 10 7 2 3 4 9 6 U N Y Y RES O : E : : ECONOM D INTEGR N V I N RO MA
N I T ME I C N Y table with all data for for data all with I table AGEME N TA L N T A E PP uroChem ROACH
Sustainability Report 2013 57 Report Sustainability Response ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Summary table of standard disclosures under GRI G4 reporting (continued)
Indicator Response Indicator Response Biodiversity CATEGORY: SOCIAL G4-EN11 ✓ LABOR PRACTICES AND DECENT WORK G4-EN12 ✓ Employment G4-EN13 ✓ G4-LA1 ✓ G4-EN14 ✓ G4-LA2 ✓ Emissions G4-LA3 ✓ G4-EN15 ✓ Labor/Management Relations G4-EN16 ✓ G4-LA4 ✓ G4-EN17 ✓ Occupational Health and Safety G4-EN18 ✓ G4-LA5 ✓ G4-EN19 ✓ G4-LA6 ✓ G4-EN20 ✓ G4-LA7 ✓ G4-EN21 ✓ G4-LA8 ✓ Effluents and Waste Training and Education G4-EN22 ✓ G4-LA9 ✓ G4-EN23 ✓ G4-LA10 ✓ G4-EN24 ✓ G4-LA11 ✓ G4-EN25 ✓ Diversity and Equal Opportunity G4-EN26 ✓ G4-LA12 ✓ Products and Services Equal Remuneration for Women and Men G4-EN27 ✓ G4-LA13 ✓ G4-EN28 ✓ Supplier Assessment for Labor Practices Compliance G4-LA14 ✓ G4-EN29 ✓ G4-LA15 ✓ Transport Labor Practices Grievance Mechanisms G4-EN30 ✓ G4-LA16 ✓ Overall G4-EN31 ✓ Supplier Environmental Assessment G4-EN32 ✓ G4-EN33 ✓ Environmental Grievance Mechanisms G4-EN34 ✓
58 EuroChem Sustainability Report 2013 H Indicator I P Fully reported Response Key: SOC G4-HR12 Human Rights Grievance Mechanisms G4-HR11 G4-HR10 Assessment Supplier Human Rights G4-HR9 Assessment G4-HR8 Indigenous Rights G4-HR7 Practices Security G4-HR6 Labor orForced Compulsory G4-HR5 Child Labor G4-HR4 Freedom of Association and Collective Bargaining G4-HR3 Non-discrimination G4-HR2 G4-HR1 Investment G4-SO5 G4-SO4 G4-SO3 Anti-corruption G4-SO2 G4-SO1 Communities Local nformation not reported (not considered material considered to business operation) (not not reported nformation artially reported artially U MA I ET N R Y I GHTS Response ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ G4- Customer Health and Safety P G4-SO11 Grievance Mechanisms on for Impacts Society G4-SO10 G4-SO9 on Society Impacts for Supplier Assessment G4-SO8 Compliance G4-SO7 Anti-competitive Behavior G4-SO6 Public Policy Indicator G4- G4- G4- Labeling Service and Product G4- G4- Communications Marketing G4- G4-P Compliance G4- Privacy Customer www.eurochem.ru/reports/sustainability-reports Y 2013 on our website at website our 2013 on RODUCT RES ou can find the complete GR complete the find can ou P P P PR3 P P P PR8 R1 R2 R4 R5 R6 R9 R7 P O N
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Sustainability Report 2013 59 Report Sustainability Response ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company 2013 KEY FACTS
EuroChem’s global Economic Health ranking sustainability & safety
• >100 countries global presence • RUB 176.9bn sales • 1.00 Lost Time Injury Frequency Rate • 2% of the world’s production of fertilizers • US$1.3bn EBITDA • 38 Lost-time injuries (employee) (in nutrient content) • 2.07x net debt/EBITDA • No 5 globally in potash reserves • US$5.6bn total revenues (+6%) (licensed) • +20MMT amounts of products sold • 7.8% market share in Europe • +8% increase in sales volumes for • 13% market share in CIS nitrogen and phosphate products • US$1.0bn total capex • US$0.4bn potash capex • BB ‘stable’ rating from Fitch and S&P
Environmental Social sustainability sustainability
• RUB 1.16bn environmental protection • 22,327 employees (+1%) expenditure • 12.9% management to staff ratio • 125.10kWh/t energy consumption • 41% women in management • 2.91m3/t non-recycle water consumption • 4.6% staff turnover at production facilities • 1.04kg/t atmospheric emissions • RUB 7.9m/person group revenues • 2.93m3/t effluent discharges per employee • Eco-monitoring network • 48,283 RUB/month average full-time equivalent wage • RUB 19m personnel costs • US$25m investment in communities and charities (+40%) • 2 development projects (2.8 thousand homes) and 7 sport centers
60 EuroChem Sustainability Report 2013 “Sochi-2013”. at 12th the I “ the and Sector” “ the as recognized is report EuroChem’s annual Awards P N 2nd wonthe Annual «E-Generation» EuroChem’s programme engineering education agency. rating RA” “Expert by held reports annual of competition 14th the at design annual its for award an received report EuroChem’s annual awarded of aexcellence. certificate Company’s is Responsibility Social Report The Competition. Report Annual Exchange I in the a N “ wins EuroChem as well.as year previous the award this received EuroChem rogramme “The B “The rogramme on- ndustrial Sector” at the 16th Moscow Stock Stock 16th Moscow the at Sector” ndustrial L B isted Company” and “ and Company” isted est Annual Report in the I in the Report Annual est nternational I nternational B B est Annual Report for for Report Annual est est Online Annual Report” Report” Annual Online est est Social P Social est nvestment Forum Forum nvestment B rojects of Russia”. of rojects est Annual Report Report Annual est ndustrial ndustrial
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EuroChem receives the “ the receives EuroChem future potash Company’s the of one of site and Region, Volgograd Kotelnikovo, in “Vostochny” area residential the of design landscape and architectural its with Russia of South the of 11th the of scope Architects of Forum the within held acompetition won EuroChem (AKMR). Russia of Media Corporate and Communications for Directors of Association by the awards top received EuroChem’s corporate newspaper and video industry. chemicals Russian the within activities charity corporate for ranking the led EuroChem running, year fifth well, the for As Forum. Donors Vedomosti, P newspaper business by the held is which competition L Charity Corporate Russian “2013 the at acertificate awarded was EuroChem ricewaterhouseCoopers and the mines. N ational Tax Award”.ational eaders” annual annual eaders”
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Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company Glossary
Abbreviations used in the report EuroChem EuroChem Mineral and Chemical Company OJSC bn Billion CIS Commonwealth of Independent States CSR Corporate social responsibility EBITDA Earnings before interest, taxes, depreciation, and amortisation GRI Global Reporting Initiative G3.1 HR Human resources HSE Health, safety and environment HSE&Q Health, safety, environment and quality JORC Australasian Joint Ore Reserves Committee KPI(s) Key performance indicator(s) LTIR Lost time incident rate m Million MMT Million metric tonnes NGO Non-governmental organisation p.a. Per annum PPP Public-private partnership RAFP Russian Association of Fertilizer Producers RUB Roubles RUIE Russian Union of Industrialists and Entrepreneurs Russia Russian Federation USD US dollars CAN Calcium ammonium nitrate DAP Diammonium phosphate DFP Defluorinated feed phosphate K Potassium
K2O Potash MAP Monoammonium phosphate MCP Monocalcium phosphate N Nitrogen NP Nitrogen – phosphorus NPK Nitrogen – phosphorus – potassium P Phosphorus
P2O5 Phosphate pp percentage points UAN Urea ammonium nitrate
62 EuroChem Sustainability Report 2013 published separately. book data the or document the within stated are Where conversion factors have been used, these system. information management bespoke own our from derived is report in the used data The capacity. production new wehave added where and regime G4 the under particularly reports, previous with continuity maintain to us allows This production. K of afunction as I Kazakhstan. in 2013, excluding operating all sites to relates document in this used data performance The environment agrochemicalindustry. for the regulatory and business wider the and we operate in which territories the changes tobusiness, the stakeholders, our of views the with along reports, in previous covered as issues these to reference made We have this. also do to wehave endeavoured business; the to importance material of be to wedeem that sustainability of aspects on report and identify to us requires GR the of ‘core’ the requirement with accordance in report to wehave chosen document this For GR the of conventions the have followed reports sustainability previous Our keystakeholders. other and suppliers customers, agencies, government communities, local with interactions well as as sites the at contractors and employees of I in development. I report. 2012 the from sustainability on follows and 2013 year calendar the covers document This f t covers all current operating sites and those those and sites operating all current t covers u G4 Guidelines published in 2013. The latter in 2013. latter published The Guidelines I G4 r er informa er th n most cases this data is presented presented is data this cases n most t also refers to the activities activities the to refers t also PI s, chiefly per tonne of of tonne per chiefly s, I 3.1 Guidelines. t
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[email protected] 2527 795 Tel.: +7 (495) Responsibility Social Kuznetsov Vladimir Communications of Head TorinVladimir co CSR for 2013 on our website at www.eurochem.ru at 2013for website our on P new operations. in 2013, of that including performance our reflects data All reports. in previous contained information of restatement no been has There lease find the complete GR complete the find lease n tact table with all data all data with I table
E uroChem Sustainability Report 2013 63 Report Sustainability
Further information Social responsibility Health & safety Environmental sustainability Economic sustainability Our company notes
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