Supply chain

PhosAgro strives to make its procurement activities transparent and ensure fair competition and equal conditions for all suppliers of equipment and services. We seek to build strong, trustful and mutually beneficial relationships with our partners in compliance with the applicable laws, regulations, industry standards, contractual and other obligations.

Global Sustainable Development Goals (SDGs)

Procurement principles

Procurement principles

102-12 103

As set out in the relevant policy of Apatit, the Company’s procurement activities should rely on the following principles:

  • be legitimate, competitive, and transparent;
  • factor in the requirements for specifications, quality, customer service, delivery, reliability, eco-friendliness and total cost of equipment and materials ownership, along with legal and social matters;
  • use the best-fitting, sustainable business solutions;
  • protect the Company’s reputation;
  • comply with the Company’s existing procedures and best practices.

Procurement methods

Corporate procurement is a competitive process, with a dedicated commission put in charge of organising tenders for equipment, materials, petroleum products and services.

PhosAgro requests are placed on the Group’s electronic bidding platform (EBP) that meets all applicable requirements set by Russian law.

Key requirements for purchased products

Key requirements for purchased products


When purchasing raw materials, components, packaging, the Company implements a pre-supply evaluation based on verification tests conducted by the Company’s quality control department subject to a report (approval) providing full information about the purchased items.


Suppliers are evaluated and selected in accordance with the Company’s standard STO 7.4-01 outlining the supplier reliability criteria.


As a socially and environmentally responsible business, the Company checks its potential suppliers for compliance with relevant requirements.

Protecting human rights

In line with PhosAgro’s Code of Ethics, the Company may refuse to cooperate with suppliers or business partners discriminating their own or subcontractors’ employees or using forced labour.

Committed to fighting corruption, PhosAgro adheres to the Anti-Corruption Charter of the Russian Business. We are making reasonable efforts to minimise risks of doing business with partners that might be involved in fraud and/or corruption.

In furtherance of our Anti-Corruption Policy, we establish and maintain business relationships with companies that operate in a bona fide manner, care about their own reputation, show commitment to high ethical standards, combat corruption, and take part in joint anti-corruption initiatives in accordance with article 133 of the Federal Law On Combating Corruption.

Transparency and openness of procurement processes

Green procurement

The Procurement Department, as the Company’s other departments, is committed to sustainable development. We bear responsibility not only for what we do but also for what our partner companies, suppliers and service providers do to comply with the sustainability principles. On top of that, we seek to have an entirely sustainable supply chain and adopt the relevant principles across the board to implement a green procurement system.

Pillars of our green procurement system

Creating a sustainable corporate framework for ESG based on internal regulations

Considering suppliers and contractors as vital participants in the Company’s value chain as part of our commitment to the UN Sustainable Development Goals

Covering all aspects of ESG-related activities in the Company’s non-financial disclosures

Discussing supplier and contractor relationships with stakeholders

Focusing the ESG ratings on corporate responsibility, including the value chains and supplier and contractor relationships

Green procurement activities

Highlights of 2020

60 ESG criteria developed to evaluate suppliers and contractors

Category-based supplier and contractor evaluation system created

Code of Conduct for Counterparties drafted and published

ESG criteria integrated into procurement

Regulations drafted to implement the ESG evaluation of suppliers and contractors

ESG evaluation coverage exceeded 4% of purchase volumes, with the average score close to 64 (out of 100)

Action plan for 2021

Automating the assignment and review of supplier and contractor ESG ratings

Expanding the ESG evaluation coverage

Adding the ratings to the counterparty selection criteria

Revising the supplier audit procedure to incorporate ESG requirements

Revising contracts to include a reference to the Code of Conduct for Counterparties

Considering the share of ESG-evaluated suppliers and contractors and their average ESG rating as potential KPIs for the Procurement Department

Code of Conduct for Counterparties

The Code of Conduct for Counterparties only deals with the sustainability-related aspects of counterparty relationships. It seeks to give a clear understanding of our approach to selecting suppliers and partners, along with our priorities in making the choice.

Based on the Code of Conduct for Counterparties, PhosAgro developed a system to evaluate suppliers against ESG criteria that cover environmental issues, social responsibility and quality management.

Code of Conduct for Counterparties

Legal compliance

Internal control and monitoring

Conflict of interest

Fair competition

Safe working environment

Requirements for salary and working time

Equal employment opportunity

Inside information

Freedom of association

Human trafficking and slavery

Confidentiality and data protection

Countering corruption

Confirming consent to this Code’s provisions>

Whistleblowing and safety guarantees

Occupational health and safety

Minimising environmental impact

Key stages in developing our supplier ESG evaluation system
Key elements of supplier evaluation

The evaluation results in an individual supplier/contractor rating (in points). These ratings help us determine the share of ESG-compliant suppliers and contractors and make the right choice.

Human resources


Human resources

Procurement training in 2020

Training under Sergey Dubovik, a leading business coach in Russia 31 people received job-related training
Programmes by Moscow School of Management SKOLKOVO 2 people completed a course by Moscow School of Management SKOLKOVO
Training at the Apatit Training Centre 11 people upgraded their skills
36 webinars, training sessions, workshops were held for the Department’s employees
The Gap Partnership’s and MBA programmes 10 people completed a course by The Gap Partnership
2 people completed an EMBA course


The COVID-19 pandemic triggered fundamental changes to our recruitment approach. Previously, we used to source candidates locally, but the health emergency forced us to take a different route. This resulted in new opportunities, making the search not restricted to the regions we are based in and the candidate’s expertise and business competencies the first consideration. Attracting talent from large and global companies also proved beneficial.

Procurement in figures
Procurement in figures

Number of counterparties in 2020, units
Geography, units
Service tenders in 2020
Tenders Unit of measurement JSC Apatit Balakovo branch Volkhov branch Kirovsk branch Total
Capital construction Procedures 73 33 27 109 242
RUB mln 4,017 307 1,430 4,368 10,122
Maintenance and repairs Procedures 54 42 43 44 183
RUB mln 711 97 300 339 1,447
Transportation, incl. rail Procedures 52 3 2 12 69
RUB mln 3,930 0.5 209 1,568 5,707.5
Corporate and other services Procedures 49 15 15 22 101
RUB mln 1,261 188 201 122 1,772
Total Procedures 228 93 87 187 595
RUB mln 9,919 593 2,140 6,397 19,049
Procurement from local and other businesses in 2020, RUB ths
Asset Local businesses Other businesses Total
JSC Apatit 15,067,520 41,456,426 56,523,946
Balakovo branch 1,875,152 7,133,525 9,008,677
Volkhov branch 3,346,186 6,287,501 9,633,687
Kirovsk branch 3,178,357 25,724,637 28,902,995
Total 23,467,216 80,602,090 104,069,306
Share of local and other counterparties in 2020, %
Procurement from local businesses, %
Procurement in figures
Foreign vs domestic contracts in 2020, RUB ths
Asset Foreign Domestic Total
JSC Apatit 1,113,600 55,410,347 56,523,946
Balakovo branch 22,995 8,985,683 9,008,677
Volkhov branch 242,552 9,391,136 9,633,687
Kirovsk branch 1,499,352 27,403,642 28,902,995
Total 2,878,498 101,190,808 104,069,306
Structure of purchases abroad and in Russia, %
SME procurement in 2020, RUB ths
Asset Other businesses SMEs
JSC Apatit 48,140,395 8,383,552
Balakovo branch 6,636,792 2,371,885
Volkhov branch 7,005,262 2,628,426
Kirovsk branch 22,083,140 6,819,855
Total 83,865,589 20,203,717
Supply chain

Our supply chain represents a set of interconnected processes covering all stages of value creation, from procurement to product delivery. At PhosAgro, supply chain management aims to ensure smooth operation of all facilities, high product quality, and seamless shipments to customers.

PhosAgro’s supply chain

Significant changes to PhosAgro and its supply chain


The reporting year saw some changes to PhosAgro’s supply chain.

Our ammonium sulphate and sulphuric acid projects brought about a significant decrease in external purchases and reduced our dependence on outside suppliers, which had a positive effect on purchase prices. In 2020, ammonium sulphate consumption grew by 23%, while its purchases sank by 42%. Sulphuric acid purchases were down by 31%.

In recent years, urea-formaldehyde concentrate (UFC) consumption has been on the rise as urea production grows. Between 2018 and 2020, urea production increased by 8%, driving UFC purchases up by 16%.