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LONDON/MOSCOW, Sept 25 (Reuters) - Russia’s Phosagro plans to increase production of fertilisers to conquer new markets in Europe, the Americas and at home, it said on Wednesday.
One of the world’s largest producers of phosphate-based fertilisers, Phosagro plans to boost production of fertilisers and feed phosphates to 11.7 million tonnes by 2025 from 9.4–9.5 million tonnes in 2019, it said.
“The strategy to 2025 aims to further expand Phosagro’s presence in its priority domestic market, as well as in premium export markets that offer the best netback prices,” Andrey Guryev, its chief executive, said in a statement.
Compared with 2018 levels, the company plans to raise its fertiliser sales volumes by 50% in Russia and by 60% in Europe by 2025.
Phosagro, which competes with other global fertiliser producers such as U.S. firm Mosaic, aims to invest $3 billion in growth and modernisation by 2025 and expects that investment to boost core EBITDA earnings $450 million, it said.
To increase output, Phosagro will construct a new plant in Russia’s north-western Leningrad region and will modernise its production facilities in the central Saratov region, its said.
However, it said it has already passed the peak of its investment cycle, following completion of key parts of its 2020 strategy, and now plans to keep the ratio of its net debt to EBITDA between 1.0x–1.5x by 2025.
On Tuesday, Phosagro disclosed its new dividend policy, which allows to direct 50-75% of free cash flow to dividends if its net debt/EBITDA ratio is between 1.0x and 1.5x. (Reporting by Dmitry Zhdannikov and Polina Devitt; editing by Jason Neely and Louise Heavens)