President of Russia Vladimir Putin: Mr Mazepin, good afternoon.
I know that you and your company are implementing an extensive social programme in the regions where you operate. Could start with that?
Uralchem CEO Dmitry Mazepin: Mr President, thank you very much for the opportunity to meet in person during such a difficult pandemic period.
I would like to say a few words about the company. Uralchem employs about 30,000 people. Of these, 60 percent have been vaccinated and 20 percent have recently recovered from COVID-19, so doctors have recommended that they postpone vaccination. The company is operating steadily, and there are no problems. We know how to prevent them and how to tackle them, if necessary.
Along with our focus on public health, we also undertake as much social responsibility as we can handle and participate in many social projects. For example, we have signed an agreement with the government of the Perm Territory and the Berezniki city administration on relocation of employees and residents from dilapidated housing in the area where an industrial accident occurred 15 years ago.
Vladimir Putin: Sinkholes, right?
Dmitry Mazepin: Well, no new sinkholes, and the soil has stabilised. But the exclusion zone is still in place. We have allocated 4.2 billion rubles to build an entire new neighbourhood, Lyubimov. The other districts have been revived, and the city is growing.
The company has also allocated 3.7 billion rubles over the past two years for the creation of social infrastructure. A clinic, a preschool centre, a sports and recreation centre, and an indoor skating rink have been built. We have completed financing for a major church.
We are also building housing for our employees; we have spent about 3 billion rubles to build 730 flats. This summer, we bought 300 flats in the Kirov Region and donated them to social workers.
The company also participates in the large federal project Sirius. We have allocated over 3 billion rubles to build a concert hall.
Vladimir Putin: A theatre. Is the construction progressing?
Dmitry Mazepin: Yes, it is. Work is underway, there will be a huge building near the Formula 1 track. It is a big project that will be very useful to the Sirius Foundation.
If I may, I would like to report briefly on the company’s performance results.
As I have said, the company’s performance is stable, and we are leading the way in mineral fertiliser production. We have every reason to be confident that the company will develop because we believe, the Earth’s population will increase by two billion in the next two or three decades. Global per capita plowland areas will dwindle. It may be strange, but these arable lands continue to expand in Russia, due to changing temperatures. A decade ago, our fertiliser deliveries to Tatarstan, the Kirov Region, Udmurtia and the Perm Territory were not very impressive. To be honest, we have now tripled these volumes. And we have learned to cultivate these lands, with the climate helping us. Therefore we believe that the national agriculture sector will grow, and, of course, it is achieving impressive results.
China, Brazil, the United States, Europe and India consume the bulk of potassium.
I would like to note that, as you know, Africa is unable to buy fertiliser because of skyrocketing prices. And we predict that there will be certain demographic problems.
Vladimir Putin: Food problems, in the first place.
Dmitry Mazepin: Food problems. We are interested in working in Africa, but they have no capabilities. Industrial countries either subsidise or shut down their markets.
Therefore you have made the right decision by instructing us to closely monitor domestic deliveries.
Vladimir Putin: Are European partners also downsizing production? I mean your partners.
Dmitry Mazepin: We have virtually no partners in the potassium sector; this concerns nitrogen fertiliser.
Regarding potassium, you will see potassium sales if we go to the next page. These are global potassium producers. Two Canadian companies control 30 percent of the market, Russia and Belarus control 18 percent each, and China does not operate on foreign markets.
Vladimir Putin: They consume everything at home.
Dmitry Mazepin: And they also buy the same amounts. They consume 16 million and produce eight million.
Vladimir Putin: More than everybody else.
Dmitry Mazepin: Yes.
We sell potassium to 76 countries. These huge deliveries require a solution to logistics problems.
I have a separate report on how we have implemented your instruction to freeze prices. We have voluntarily fixed the prices in May 2021. As for potassium, the Government has no grievances, and potassium is not on the list of quota-controlled mineral fertilisers, because I have promised the heads of ministries, and I am keeping my promise.
There were certain breakdowns and lapses involving nitrogen and phosphorus fertiliser, and therefore the Government decided to introduce quotas.
This is why the situation is stable now, and these charts show that we provide our agriculturists with fertiliser at a third of the price.
Vladimir Putin: Our aim is not to prevent the domestic fertiliser producers from benefitting from the market situation, but to provide our own market with the necessary amount of fertiliser for agriculture. I think that both objectives are reachable, although at first sight it seems that they are mutually exclusive. Nevertheless, our companies will be able to profit from the situation and make decent gains. But in the first place, of course, they should meet the needs of the domestic market.
Dmitry Mazepin: Mr President, you are absolutely right. As a company, we have increased the supply of nitrogen fertiliser to the domestic market by 20 percent over the last two years.
Five years from now, we will celebrate the 100th anniversary of the start of potassium mining. So, we are the oldest company. As I said, Uralkali employs 21,000 personnel. We are based in Berezniki and Solikamsk. The only thing I would like to draw your attention to is that we continue to deal with an old local problem, because there are about 40,000 kilometres of tunnels under Berezniki and Solikamsk. When the construction began, it was under villages that later gave rise to towns. Therefore, we are tackling all these issues jointly with the Ministry of Natural Resources and Environment and the Ministry of Industry and Trade.