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December 3, 2004

December 1, 2004, Uralkali signed the traditional cooperation agreement with Sverdlovsk Rail Ways (SRW)

Currently the Uralkali's own railway car park exceeds 3.6 thousand cars. The total cost of the SRW's services to Uralkali is expected to account for 1.6 billion rubles in 2004. The transport component in the cost price of Uralkali production is 50 percent.

By visiting Uralkali, one of the Russian largest consignors of goods and rail car owners as well as one of the largest railway operators, SRW has demonstrated a principally new approach in its strategy of working with clients.

"Nowadays, the ideology of railways is changing. The client becomes the main priority for us. We are working not only on how tom transport the cargo but also on how to minimize the transport costs," said Shevket Shaidullin, the chief at SRW.

The SRW's leadership plans to give a hand to Uralkali to improve organization of the transit railway traffic where significant repair works take place, which causes delays in transportation between Berezniki and St. Petersburg (St. Petersburtg Bulk Terminal).

The Uralkali's intention to use the reduction coefficients to transport the industrial raw materials is also welcomed by the SRW.

Also, the SRW leadership has taken the decision to free the repair and service capacities for Uralkjali in Berizniki.

There is an engagement agreement in the document signed. According to the agreement, the two sides tend to use direct contracts on car repair and car service.

Mr. Shaidullin mentioned the need to serve up to 8 thousand cars in the Berezniki service station. "We proceed with direct [contracts] with the car owners. Transportation is our business and we want to quit any middleman services between the owners and the SRW," he said.

Maxim Bakshinsky, general director at Uralkali has secured the orders to serve the Uralkali's car park.

"The transportation volume of our production increasingly grows from year to years. Thus, the demand for the car services is also growing," said Bakshinksy, "Since 2000, Uralkali has been carrying out the policy of quitting rental car use. Because of the logistic chain modernization, Uralkali plans to proceed with transportation by means Uralkali own cars. The fact that our car park has increased by 282 [mineral fertilizer] cars (the rent rate dropped by 1.100 cars) and the transportation volume grew by 19 percent, means how serious the work to increase the transportation effectiveness is. We have joined with the SRW to cope with problems appearing in the shortest time, effectively and with the maximum benefit for the both sides. Today, our relationships get a new development impulse. Investment volumes and the record production of potassium fertilizers correspond to our plans to win fair positions on the Global markets. Thanks to the fruitful cooperation with SRW as well, Uralkali will be able to gain leading positions among the similar companies in the World."

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