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  KAZAKHSTAN International Business Magazine №1, 2004
 Kazphosphate Continues to Make Headway
Kazphosphate Continues to Make Headway
Alexandr Poyarel, General Director of Kazphosphate LL?
Last year the course taken towards uniting enterprises in the phosphoric industry under the leadership of Kazphosphate LLC, with the aim of improving the quality of products and finding new marketing opportunities, has proved to be very effective. In 2003, Kazphosphate LLC continued its strategy for increasing production and gained the second place for its production growth rate among the mining and chemical companies of the country. As it was reported during the summary meeting of the Ministry of Industry and Trade of the Republic of Kazakhstan, the Company accounts more than 50% of total production output in the chemical industry of the country.
In 2003, Kazphosphate LLC began the production of new types of fertilizers - nitroammophos and feed supplements for cattle and poultry breeding. The company was enlarged by the addition of a new subsidiary - Stepnogorsk Chemical Plant. This plant was disaffiliated from CJSC KazSabton; and it produces mineral fertilizers for agricultural enterprises in Northern Kazakhstan.
In addition, Kazphosphate LLC invested $3.2 m for the renovation of Shymkent Synthetic Detergent Plant.
In 2003 all the enterprises of Kazphosphate LLC, including Novodzhambul Phosphoric Plant, Mineral Fertilizers Plant and Railway Transportation Complex in Taraz, Stepnogorsk Chemical Plant, Karatau Mining and Industrial Complex, and Synthetic Detergent Workshop in Shymkent, produced 14,082 m tenge worth of production, which is 37.6% higher than in 2002. In its turn, the company sold products in the amount of 13,761 m tenge (exclusive of VAT), which is 132.3% of the 2002 level.
As for separate types of products, last year the company produced 60,692 tonnes of phosphorus (152.2%), of which 56,817 tonnes were produced by Novodzhambul Phosphoric Plant and 3,875 tonness by Khimprom-2030 under a tolling contract. In 2004, the company plans to increase the production of yellow phosphorus by 56.9% to reach 95,200 tonnes (Chart 1). In order to achieve this goal the company undertook overhaul of all four furnaces at Novodzhambul Phosphoric Plant, which were all in operation simultaneously last year for the first time in the last twelve years.
In December 2003, the record production rate of 2,760 tonnes of yellow phosphorus of one furnace per month was achieved, that exceeds the rated capacity. This was made possible due to the measures taken to enhance the efficiency of the thermal furnaces, lowering the cost of finished product by means of renovating the technological units of the basic equipment, and due to the introduction of alternative types of raw materials such as anthracite and thin coal.
Even though the production of sodium tripolyphosphate was only 38,673 tonnes last year, which is slightly lower than in 2002, the positive dynamics of the company’s development and the start of production of high hydratation sodium tripolyphosphate and food grade sodium tripolyphosphate raise hopes that in 2004 the company will sell 64,500 tonnes of this type of product as minimum and will meanwhile expand sales on the markets of nearby countries and distant foreign countries.
Production output at Karatau Mining Industrial Complex was lower than the last year’s index (97.5% of 2002 figures), due to the absence of shipment of fine grade phosphate rock to Uzbekistan. Sale agreements and increase in production at our plants raise hopes that this temporary dip will be eliminated in 2004 (Chart 2).
The management of Kazphosphate LLC has made a decision to build two new furnaces at Novodzhambul Phosphoric Plant. This decision is based on a favorable forecast for increase in consumption of yellow phosphorus on international markets. Construction will begin this summer and end in 2006.
In 2003, the plants in Taraz and Stepnogorsk jointly produced 224,900 tonnes of mineral fertilizers (36.8% higher than in 2002), including 34,183 tonnes of subsidized fertilizers being shipped to various parts of Kazakhstan (76.9% higher than in 2002). These figures might have been much higher if the Government and the Ministry of Agriculture of the RK had issued appropriate decrees prior to the beginning of the sowing season in the southern regions of Kazakhstan.
In October 2003 a plant in Aktau came into operation, where Kazphosphate LLC is working on a tolling scheme. This year, 254,000 tonnes of fertilizers are planned to be produced and delivered to customers under existing contracts. The total volume of a mineral fertilizer production at Kazphosphate LLC will, therefore, reach 591,000 tonnes, which is 282.7% above the 2003 level (Chart 3).
Production growth entails an increase in the volume of services rendered by transporters, maintenance staff and others. In 2003, the payments for railway services amounted to 2,521 m tenge (133% of the volume of 2002). The charges for transportation of electricity by KEGOC increased - more than 1,222 m tenge (138%).
Kazphosphate LLC is constantly improving its production process, modernizing existing capacity and developing the infrastructure of the enterprises in the phosphorus industry. This allow ensuring the effective use of the natural recourses of Karatau phosphate basin.
The company has invested about 3,671 m tenge for these purposes, of which 1,131 m tenge - during 2003. As we plan to achieve the production output of 180,000 tonnes of yellow phosphorus and 1 m tonnes of mineral fertilizers per year, including the production at Aktau, the additional investment of more than $50 m is required.
Concerning the factors deterenting the growth of production, there are some objective factors such as remoteness of our enterprises from the sources of raw materials (coke, ammonia, sodium carbonate, etc.) and problems with electricity supplies arising from intergovernmental relationships. Other factors are absense of rolling stock for shipping commodity products and transporting raw materials such as food grade phosphate rock, ammonia and phosphoric solutions in the enterprisers. The solution of these problems requires cooperation with the national company Kazakhstan Temir Zholy.
Kazphosphate LLC pays great attention to social issues on its enterprises. One example is the opening of a dentist service at Novodzhambul Phosphoric Plant with foreign equipment worth 0.5 m tenge. Only last year, 1,650 employees of the company improved their health at the Koktal Therapy Center, which operates all year round. 920 children of miners and chemical plant workers spent their summer holidays at Zhuldyz health camp. The company financed the construction of 10 houses as aid for the victims of an earthquake in Zhambyl region.
Kazphosphate LLC is continually making sponsorships for poor and orphanages in the region. Last New Year Holiday, boarding schools, orphan houses and state schools received 350,000 tenge worth presents from the company.
Biographical note
Poyarel Alexandr Alexandrovitch was born in 1951. He started his working career after graduating from the Kazakh State Polytechnic Institute, where he studied geology and exploration of mineral deposits. He has come a long way from being an ordinary geologist to become the director of the company. In 1977 he began working as a senior geologist In the commercial development department at Zhanatas open mine. In 1979 he became a senior geologist and the head of the Promrazvedka prospecting company. In 1988 he was promoted to Deputy Director General for Quality Assurance. In 1992 he became Chief Engineer. In 1993 he was Vice President and Technical Director of Karatau joint-stock company, in 1997 Chief Executive of Karatau Company, and in 1998 General Director of Karatau Mining and Industrial Complex. In 1999 he was appointed Director General of Zhanatas Mining and Industrial Complex, in 2000 to Kazphosphate. Since September 2001 Poyarel has held the position of Director General of Kazphosphate.
In 2001 Alexandr Poyarel was awarded the order of Kurmet and in 2002 the Plaque of Honored Explorer of Mineral Resources. He is married and has two sons.

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Subsoil Use Contracts: Issues of Legal Classification and Systematization  Yuri G. Bassin, Maidan K. Suleimenov, Erlan B. Osi 
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