Andrey Melnichenko’s holding represents a highly efficient vertically integrated business structure, encompassing the entire production and commercial cycle—from raw material extraction to the delivery of finished products. Its companies operate in the mining, energy, chemical, and logistics sectors.

 

Key Stages of the Production and Business Cycle

Raw Material Extraction

The primary resources include potash and phosphates for fertilizer production, coal for energy and industry, and iron ore and baddeleyite for metallurgy and the chemical industry. Key deposits include the potash fields (Gremyachinskoe and Usolskoe), apatite deposits (Kovdorsky GOK), and coal mines (mines and open-pit sites in Kuzbass, Krasnoyarsk Krai, Khakassia, and other regions). This stage is characterized by high automation and modern technologies aimed at cost minimization and enhancing environmental sustainability.

Raw Material Processing

Fertilizer Production: Potash and phosphate fertilizers are produced from extracted potash salts and phosphates, while nitrogen fertilizers use natural gas as feedstock.

Coal Enrichment: Coal is processed at beneficiation plants to improve its energy value and quality.

Chemical Production: Chemical plants manufacture products such as ammonia, urea, and ammonium nitrate.

Energy Production

Coal is used to generate thermal and electrical energy, which is supplied to industrial facilities and the utility sector. Coal-fired power plants are key elements of the energy infrastructure in the regions where the holding operates. The companies also invest in the development of alternative energy sources, including wind and solar energy, to enhance environmental sustainability.

Logistics

The holding’s proprietary logistics infrastructure includes rail transportation, seaports, and freight terminals, ensuring efficient delivery of raw materials and products. Examples include coal export terminals in Primorsky Krai and fertilizer export terminals. Transportation of coal, fertilizers, and chemical products is carried out in both domestic and international markets, reducing dependence on external contractors and minimizing costs.

Product Distribution

Domestic Market: Supplies coal and energy to industrial enterprises, utility services, and power plants, as well as fertilizers to agricultural enterprises and farms.

Export Markets: Products are exported to Europe, Asia, South America, and Africa. Potash, phosphate, and nitrogen fertilizers are supplied to countries with developing agricultural sectors, while coal is exported to energy-dependent nations such as China, India, and Japan.

Compensatory Approach

Losses in one segment are offset by revenues in another. For example, a decline in coal prices is balanced by increased demand for fertilizers. The companies leverage flexible production capacities and a robust logistics network to adapt to market dynamics.

Investments and Innovations

Investments include the development of technologies such as carbon capture methods, the creation of eco-friendly fertilizers, and the improvement of energy efficiency across facilities. Social projects involve investments in the regions of operation, including the construction of social infrastructure and the development of educational initiatives.

 

An Integrated and Resilient System

 

The production and business cycle of Melnichenko’s holding operates as a closed-loop system, where all elements—extraction, processing, production, logistics, and distribution—function within a unified chain. This ensures maximum business resilience to external fluctuations, high profitability, and global competitiveness.