Our Employees

PhosAgro's enterprises in Cherepovets provide their employees with additional non-government pension payments. A special programme called "Pensioner" was also introduced at Apatit, which includes an additional payment to support employees during the resettlement process. Pensions are calculated according to the period worked by the employee at PhosAgro or its subsidiaries. In addition, PhosAgro provides World War II veterans and the pensioners with various benefits in relation to public holidays, including Victory Day, Chemist's Day and Old People's Day.

At PhosAgro-Cherepovets we run a programme to improve employees' living conditions. Since the programme's launch more than 1,312 apartments have been provided to employees and their families. In July 2013 we plan to complete construction of a new 90-apartment building, which will further expand housing available for PhosAgro-Cherepovets employees.

Every year more than 600 existing and prospective mining experts undergo training and retraining programmes at the Apatit training centre. Every retrained employee is awarded a higher qualification category, which also leads to an increase in the employee's salary. Apatit sponsors 50 students obtaining professional qualifications that are in demand at the enterprise. Currently Apatit employs one Doctor of Engineering Science and eleven Associates of Science. All of them obtained their degrees on the job.

Goal

Based on research and analysis conducted by our R&D unit NIUIF, we identified optimisation of our mining fleet operations as a key area of potential cost savings in our apatite-nepheline ore mining. NIUIF researchers found that the fleet was losing up to 25% of its potential productivity due to excess idle time. Researchers identified ways to decrease the cost of apatitenepheline ore mining and increase the efficiency of the mining fleet with the help of an automated dispatching system.

KPIs

1. Increase efficiency of Vostochny mining fleet by 5%
2. Decrease diesel fuel use by 5%

The solution

The automated dispatching system enabled us to introduce a KPI-based motivation programme for our mining fleet operators. Drivers' salaries are paid based on data from the automated dispatching system, meaning they are motivated to maximise the productivity, efficiency and uptime of the equipment. It has also enabled us to better manage the fleet, including scheduling maintenance and repair stops more efficiently.

The system collects real time information about the mining fleet and sends it to the central dispatcher, including: speed, geolocation data, incline, fuel levels, RPM, oil pressure, onboard electrical voltage, cooling liquid temperature, uptime and mileage.

The results

We achieved:

• Mass transported per haul has increased from 101 to a maximum of 120 tonnes;
• Monthly fleet productivity has increased approximately 25%;
• Fuel consumption has decreased by 12.6%.

PhosAgro pays particular attention to maintaining a 'staff reserve' of employees, who have demonstrated the potential to advance to more senior roles within the company. We launched our first pilot programme to build and implement a staff reserve at Apatit in 2011. This project was expanded to cover all of our production subsidiaries in 2012, and we plan to complete it in 2013.

The goal of the staff reserve project is to establish a unified, working system at our main production facilities that identifies talent in order to ensure continuity, and to create internal centres of competence within the human resources function.

Our approach to the staff reserve system is to maintain the best practices and successful experience of PhosAgro's production facilities. We take into account the unique features of each of the businesses and, where necessary, adapt the general approach to the specific needs of each business unit. At each stage of this project we actively involve management at the operational and group levels.

The key results of our staff reserve programme in 2012 include:

• Production facilities: created a mechanism for building a 'reserve bench' of potential managers; this system has helped to increase the quality of preparation of future management staff; a transparent system for creating the staff reserve helps retain qualified personnel and makes our subsidiaries more attractive employers in the regions where they operate.
• PhosAgro: established unified standards for personnel management, developed coordinated personnel policies at subsidiaries; put in place group-wide criteria for evaluating staff reserve candidates using competency models for positions such as Production Manager or Head of Service/Department/Division across the business.

In total we plan to evaluate 1,060 employees as part of the staff reserve programme. As of the end of 2012, we had evaluated 570, and we will complete the process in 2013.

We launched our Talented Young Specialists programme in 2011 with the goal of recruiting talented graduates from technical universities to work at PhosAgro. We seek to attract graduates with the potential to address the challenges facing our industry, who have strong leadership qualities and demonstrate a desire to continuously increase their educational and professional qualifications.

The goals of this project are to ensure PhosAgro is able to attract and retain the young specialists it needs to continue its operations in the long term, and to identify candidates for the staff reserves at our subsidiaries.

During 2012 we chose candidates from the top university graduates in several stages: first we evaluated their professional, leadership and personal qualities through the use of questionnaires, testing, competence-based interviews, and university recommendations. PhosAgro and its subsidiaries hired 37 university graduates through this programme in 2012.

In 2012, PhosAgro provided training for 11,002 employees, including 3,055 managers and experts and 7,947 operational personnel. We invested RUB 46 million in the professional and personal development of employees in 2012, including RUB 6 million for special development programmes for 147 current and future managers from the staff reserve.

There are five active trade unions at PhosAgro – at Apatit, PhosAgro-Cherepovets, BMF, NIUIF, and Metachem. These unions represent workers in like production facilities, and function at subsidiaries of one parent company, so they have joined together as the "Minudobreniya" Association of Trade Unions. The trade unions at Apatit, PhosAgro-Cherepovets, BMF and NIUIF are part of the Russian Professional Union of Chemical Industry Workers. The Metachem trade union is part of the Metals & Mining Union of Russia. The majority of PhosAgro employees are members of these unions (see table). The Company's collective bargaining agreements establish the basic principles of the labour relations between the Company and its employees, employees' labour rights and obligations, and the rights and obligations of the Company's trade unions. PhosAgro's management considers its relations with these trade unions and with employees to be satisfactory. The Company has not experienced any collective action by its employees since it was founded in 2001.