ACRON
INVESTOR PRESENTATION
2006
2
COMPANY OVERVIEW





Acron Holding is a major mineral fertilizer producer in the world. It ranks fourth in
Europe in terms of output volume of nitrogen and phosphate fertilizers.
Acron owns and operates three agrochemical facilities: JSC Acron (Veliky
Novgorod, Russia), JSC Dorogobuzh (Smolensk Region, Russia) and Shandong
Hongri Acron Chemical Joint Stock Company, Ltd. (Shandong Province, the PRC)*.
Besides, Acron holds stakes in two producers of raw materials for fertilizer industry
– JSC Apatit, JSC Silvinit, and gas-producing JSC Sibneftegaz.
In addition, in October 2006 CJSC North-Western Phosphorous Company
established by Acron Holding, won the tender for development of two apatitenephelinic ore deposits in Oleniy Ruchey (reserves of 392 million tonnes) and
Partomchorr (reserves of 800 million tonnes), which will provide in full the
Holding’s facilities with the apatite raw material.
Among Acron’s projects is the construction of its own transhipment port terminal in
Sillamae (Estonia) with the capacity of 1 million t/y of ammonia and 700,000 t/y of
liquid fertilizers, which will significantly improve Acron’s logistics.
* Since Hongri Acron was incorporated in Acron Holding in May 2005, all figures through 2004 present consolidated data for JSC
Acron and JSC Dorogobuzh, and exclude Hongri Acron performance.
2005, 2006 and prospective data include JSC Acron, Dorogobuzh and Hongri Acron.
3
COMPANY STRUCTURE
JSC Acron
8.54
65.57%
JSC Dorogobuzh
11.8%
(77,26%)
50.5%
95,0%
(100%)
51%
21%
6.08%
51%
(8.1%)
CJSC Nordic Rus
Holding
(14.28%)
Hongri Acron
CJSC NWPC
AS BCT
JSC Sibneftegaz
JSC Silvinit
7.73%
(10.3%)
JSC Apatit
Figures show stakes in charter capital in percentage terms.
Voting interests in percentage terms are specified in brackets.
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KEY COMPETITIVE ADVANTAGES
Advantageous location in
terms of proximity
to ports

Low gas consumption

Well-diversified product
mix

Well-diversified market

Domestic facilities of the Holding are most advantageously located in
terms of proximity to ports as compared with other producers – the
distance from Acron to the nearest Baltic port is 190 km, from
Dorogobuzh – 680 km, while most plants are 1,500 to 2,500 km
away from main sea terminals.
Acron Holding is one of the most efficient producers of nitrogen
fertilizers in the CIS with gas consumption ratio of 1.147 m3 and
1.212 m3 per ton of ammonia for Acron and Dorogobuzh,
respectively, which is significantly below the CIS average of 1.300 m3
per ton.
A wide product range allows the company to offset the negative
effects of cyclical revenues from the sales of mineral fertilizers.
Regional sales diversification allows the company to respond flexibly
to fall in demand in some regions by increasing deliveries to other
markets (in particular, the company has strong market position in
China and Russia).
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PRODUCTION OF MINERAL FERTILIZERS IN RUSSIA
Production of mineral fertilizers in Russia,
million nutrient tons
BASIC TRENDS
25

Economic downturn in the late 1980s through
early 1990s resulted in a fertilizer consumption
plunge in the domestic market. Between 1988
and 1944 it decreased by more than ten
times.
20
15
10
5
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
Russian
domestically
oriented
fertilizer
producers were forced to notably cut their
production and redirect their sales abroad.
1998 economic crisis led to a considerable
devaluation of the Russian currency and to a
respective improvement of the exporters’
financial standing, which enabled the Russian
fertilizer producers to rise their businesses.
Consequently, in 2005 the domestic fertilizer
output nearly doubled to 1990 level.
Russian fertilizers are highly competitive
globally due to low internal energy tariffs.
It is anticipated that within next years the
domestic fertilizer consumption will increase in
line with a general economic upturn and the
consolidation of farms into large holdings.
0
1988
1990
1992
Nitrogen
1994
1996
1998
2000
Phosphorous
2002
2004
3Q
2006
Potassium
Consumption of mineral fertilizers in Russia,
million nutrient tons
16
14
12
10
8
6
4
2
0
1988
1990
1992
Nitrogen
1994
1996
1998
Phosphorous
2000
2002
2004
Potassium
3Q
2006
6
OPERATIONAL DATA

Acron Holding offers over 40 types
of products. Mineral fertilizers
account for more than 80% of total
revenues, while the rest 20% are
generated by organic and nonorganic synthetic products.
Acron Holding mineral fertilizers production,
'000 tons
4500
4000
3500
3000
2500
2000
Key Products:
- ammonia
- urea
- ammonium nitrate
- complex fertilizers
- methanol
- formalin
- urea-formaldehyde resins
- liquid carbon dioxide
- polyethylene and polypropylene products
- catalysts, etc.
1500
1000
500
0
1999

2000
2001
2002
2003
2004
2005
3Q
2006
Acron’s market share of mineral
fertilizer production in Russia
stands at 15%.
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TARGET MARKETS
DOMESTIC MARKET


The Russian fertilizer market offers
huge growth potential.
As Acron production units are
advantageously located close to major
farming regions the company emerged
as one of the leading suppliers of
fertilizers in Russia.
Supplies of mineral fertilizers to the
Russian market, '000 tons
800
700
600
500


Acron Holding sells its products to 55
administrative regions of the Russian
Federation.
The Holding’s distribution network
comprises 10 regional representative
offices and 16 specialized agrochemical businesses, in all key farming
regions of the country. Total capacity of
dedicated storage facilities amounts to
over 200,000 tons.
400
300
200
100
0
1999 2000 2001 2002 2003 2004 2005 3Q
2006
8
TARGET MARKETS
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EXPORTS
Company’s products find a ready
sale on global markets. Acron
exports over 80% of its fertilizers.
Key markets include China, the
USA, Western Europe, and South
America.
Acron
Holding
is
actively
developing the Chinese market,
which accounts for over 50% of
global
mineral
fertilizers
consumption.
In
China,
the
company registered A KANG, a
proprietary brand for complex
fertilizers, which is constantly in
great request.
All products produced by Hongri
Acron are sold on the Chinese
market.
Sales by regions
Russia
18%
Africa
2%
Asia
33%
Americas
19%
CIS
3%
Europe
25%
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FINANCIAL HIGHLIGHTS
• In 2005, Acron Holding managed to materially improve its financial performance due to both
increased physical production volumes and growing prices for the whole range of its products.
Sales revenue,
USD million
900
EBITDA and Net Income,
USD million
240
220
800
200
700
180
600
160
140
500
120
400
100
80
300
60
200
40
100
20
0
0
2001
2002
2003
2004
2005
3Q 2006
2001
EBITDA
2002
2003
2004
Net Income
2005
3Q 2006
10
CAPEX
Investments in
USD mln
Year
Blended fertilizer production facility, 200,000 tpa (Hongri Acron)
2.5
2005
Methanol production facility, 100,000 tpa (Hongri Acron)
24.7
2005-2006
20
2005-2006
Increasing existing methanol capacities to 192,000 tpa (Acron production unit) + ADB
25,1
2006-2007
UAN production facility, 500,000 tpa (Acron production unit)
24,4
2006-2008
Power plant, 100-130 MW (Acron production unit)
80
2006-2008
Urea production facility, 300,000 tpa (Dorogobuzh)
35,2
2006-2008
Construction of transhipment port terminal in Sillamae (Estonia) with the capacity of 1 million t/y of
ammonia and 700,000 t/y of liquid fertilizers.
73,7
2006-2008
Reconstruction of urea production facilities, add 300,000 tpa (Acron production unit)
60
2006-2009
Ammonia production facility, 400,000 tpa (Dorogobuzh)
120
2006-2009
Increasing existing ammonia capacities, add 60,000 tpa (Dorogobuzh)
18,6
2007-2008
Power plant, 50 MW (Dorogobuzh)
50
2007-2008
Increasing existing methanol capacities to 375,000 tpa (Acron production unit)
58
2007-2010
Railroad from the station to the plant (Hongri Acron)
4.9
2008-2009
Production of acetic acid (methanol processing), 150,000 tpa (Acron production unit)
150
2008-2011
Ammonia production facility, 700,000 tpa (Acron production unit)
170
2008-2012
429,6
2008-2018
Sulphuric acid production facility, 200,000 tpa (Hongri Acron)
6.2
2009-2010
Formalin, urea-formaldehyde concentrate, resins production facilities, 100,000 tpa (Dorogobuzh)
20
2010-2012
Ammonia processing facility (Acron production unit)
220
2010-2015
Ammonia processing facility (Dorogobuzh)
250
2010-2015
1,842.9
2005-2015
Formalin/urea-formaldehyde concentrate, 75,000 tpa and resins, 105,000 tpa production facilities (Acron
production unit)
Development of apatite-nephelinic ore reserves by CJSC North-Western Phosphorous Company with the
capacity of 1.9 million t/y of apatite concentrate and 1.8 million t/y of nephelinic concentrate.
TOTAL
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STOCK MARKET
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
During 2004 and 2005, the aggregate market capitalization of the top ten
Russian producers of mineral fertilizers in the domestic stock market increased
nearly sixfold to USD8.2 billion from USD1.4 billion.
Strong share performance in the industry is explained by enhanced financial
performance, a favorable price environment for mineral fertilizer producers in
global markets, and improved transparency.
Acron share*** price performance, USD
Dorogobuzh share price performance,
USD
40
0,6
35
0,5
30
25
0,4
20
0,3
15
0,2
10
0,1
5
0
11.01.05
0
11.05.05
Bid
11.09.05
11.01.06
11.05.06
Ask
11.09.06
11.01.05
11.05.05
Bid
11.09.05
11.01.06
11.05.06
11.09.06
Ask
*** Shares conversion at 5,800 ratio took place on November 24. After the split 8,222 Acron’s ordinary shares with a par value
of RUR29,000 were converted into 47,687,600 shares with a par value RUR5. Prices on graph reduced to nominal value after
conversion.
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DIVIDEND HISTORY
JSC Acron Dividends
in percentage of its net profit
%%
JSC Dorogobuzh Dividends
in percentage of its net profit
%%
50
50
45
45
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
2001
2002
2003
2004
2005
1H 2006
2001
2002
2003
2004
2005
13
ACRON HOLDING DEVELOPMENT
STRATEGY
Acquisition and construction of new
production facilities (up to USD3 billion
over the next decade)
Maximum transparency
Capitalization growth
An increase in fertilizer deliveries to
the domestic market, while
maintaining current export volumes
Achievement of definite leadership in
the sector
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CORPORATE GOVERNANCE
Quarterly disclosures
since 1998
IAS reporting
since 1997
IAS results auditor
RAS consolidated results auditor
Corporate Governance Code
PriceWaterhouse
Coopers
Baker Tilly
Russaudit
since 2005
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CONTACTS
Acron Holding
Alexander Popov
Vice-President for Corporate Construction and Financial Control
Deputy Chairman of the Administration Board
e-mail: popov@acron.ru
Alexei Milenkov
Head of Information and Analysis Department
e-mail: milenkov@acron.ru
Nadezhda Bashkirtseva
Head of Securities Department
e-mai: NBashkirceva@vnov.acron.ru
37 (2) Prechistenka,
Moscow, 119034, Russia
phone: +7 (495) 246-3326
fax: +7 (495) 777-0862
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