A convenient and efficient place for business

THE ADVANTAGES that the Principality can offer to an international company are the reason Fedcominvest Monaco SAM, a leading supplier of sulphur and fertilizer products from the former Soviet Union (FSU), has chosen to locate there.
“We find it a real privilege to be in Monaco,” says the company’s founder and chairman, Alexei Fedoricsev. “Monaco is a very convenient and efficient business center, and has all the business attributes that a large European city provides.”

Since it was founded in 1996, Fedcominvest has focused on establishing a long-term strategic supply partnership with major phosphate producers within the FSU and with customers in the Mediterranean region.
“Our presence here in Monaco has allowed us to build a bridge between the FSU and the West,” says Mr. Fedoricsev. “We are proud that in our small way we can mesh together the vast resources and export capabilities of countries like Russia and the Ukraine with the import requirements of Europe and the Mediterranean region.”

About 12 million tons of sulphur are traded annually on sea-going vessels, while equally sizeable quantities are moved by rail within the C.I.S., North America and Europe.
“We participate in about three million tons of that global transoceanic volume,” says Mr. Fedoricsev.
Sulphur is an essential raw material used mainly in production of phosphate fertilizer products, and Russia has become one of the largest sources of supply in the world.

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“Prior to the break-up of the former Soviet Union, exports of fertilizer products and sulphur did not take place in any noticeable volume,” says Mr. Fedoricsev. “The introduction of such products to world markets in the early Nineties was quite challenging.”
Fedcominvest started by entering into a long-term joint venture with Astrakhangazprom, the largest gas and oil refinery in Russia. “A sizeable investment was made in 1996 to construct sulphur granulation facilities there,” says Mr. Fedoricsev.
“This enabled us to construct and produce around 1.5 million tons of granular sulphur a year. About 2.5 million tons of sulphur continue to be recovered in either liquid or crushed lumpy form.”
Some 4.5 million tons of sulphur are produced annually in Astrakhan. Fedcominvest exports around three million tons to strategic users in the Mediterranean region, North and West Africa and Brazil.

“Close to two million tons of this sulphur is still being shipped in crushed lumpy form,” says Mr. Fedoricsev. “Plans already exist for constructing additional granulation facilities to comply with the increasing demand for this preferred grade by world users.”
Fedcominvest is further consolidating its competitive edge by continuously enhancing its logistical systems. This involves long-term transportation agreements with railway systems, acquisition and chartering of river barges and sea-going vessels, as well as the establishment of terminals and large warehouses closer to shipping ports.

“Sulphur and fertilizer products are produced at distant locations within the FSU, while export markets are serviced by large ships loaded in the Black Sea. Fedcominvest has, and will continue to invest heavily in this regard,” says Mr. Fedoricsev.
Thus far, Fedcominvest’s major investments have been financed internally. As well as the granulation facilities at Astrakhan, these include the TIS terminal in Yuzhny on the Black Sea, which started out as a fertilizer export terminal and is now being developed as a world-class grain terminal, and the company’s current investment in a new terminal in Ust Donetsk.

“These are all investments made with the earnings generated from our marketing activities,” says Mr. Fedoricsev.
Sulphur, as a low unit cost commodity, is highly sensitive to fluctuations in transportation and ocean freight rates. Fedcominvest’s position in the Black Sea enables the company to remain competitive due to the freight advantage it has over suppliers from more distant supply regions.
“Our commitment to invest heavily in the upgrading of our product and the logistics involved in handling it, ought to enhance our ability to remain competitive in world markets,” says Mr. Fedoricsev.

The company’s two largest buyers are phosphate producers in Tunisia and Morocco. These account for around two-thirds of the Fedcominvest’s exports. The balance is sold, under long-term supply agreements, to customers in Israel, Greece, Italy, Lebanon, Turkey and Egypt.
Recently the company has entered into supply contracts with key customers in Senegal, Brazil and India.
“Our current contracts add up to more than two million tons in total,” says Mr. Fedoricsev. “We have also supplied the bulk of sulphur requirements of Société Financiere et Industrielle d’Egypte (SFIE) in Egypt in the last two years. South Africa is the only other major importer of sulphur in the African continent that we do not have business with.

“Other than that, Africa represents more than two-thirds of our total exports. Our African customers are very strategically important for our future growth, and we have every intention of sustaining the excellent relationships we have developed for several years now.”
Mr. Fedoricsev still sees plenty of potential for growth in the company’s existing market without having to look further afield. “Our market share in the Mediterranean/North African region is not much above 50 percent on average,” he says. “Therefore we can still afford to grow vertically in these strategic markets before we consider further horizontal expansion in distant

Fedcominvest’s commitment to Monaco is exemplified by its sponsorship of the Monaco soccer team, AS Monaco—and reflects the interest of the company’s founder, a former player with Dynamo Moscow.
Fedcominvest also contributes to other community activities and organizations, including the beach soccer tournament, the ATP Tennis Masters tournament, the police, and the Red Cross.

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