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KF Production CJSC
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KF Production CJSC
Compound fertilizer production

Contact information Type of company: Enterprise
1 ap., 36/4 Mamikonyanc str.
Field of activity: Production
0010 Yerevan
Armenia
Phone:
Fax:
E-mail: a.chilingaryan[ta]gmail.zu
Homepage:
Sector of activity
Agribusiness
Company profile
The company is engaged in the production of compound fertilizer
Cooperation proposal
We offer an investment project which is designed to arrange the production of slow-acting and longlasting fertilizer based on the resources of Armenian rhyolite dacitic tuff (processed), the sales is
planned in Armenia and Georgia with further expansion to other markets. The project´s success is
pre-conditioned by the following key market conditions: Brisk demand for potash fertilizers in terms of
negligibly low consumption by farmers, price advantage over similar products and useful side
properties such as improved efficiency of other fertilizers.The key scientific preconditions include
captive R&D and numerous tests both in Armenia and In Russia. The project will be implemented in 2
main preliminary stages. The first stage (till 2016) provides for the production capacity of 30.000 tons
and 100.000 tons in the second stage (after 2016). Financial analysis: the financial analysis
envisages a high investment attractiveness of this project. The internal rate of return (IRR) is
estimated as 23%. Operational parameters are very high: by 2020 the gross income ,argin will 63%
while the operational income margin will be 38%. the annual average proceed growth is estimated to
be 56%. There is practically no import of potash in Armenia. Potassium is delivered to Armenia as
part of NPK fertilizers in a cumulative quantity in the total amount for about 200.000USD. The more
developed farming segment estimated in the aggregate at approximately 30.000ha can be considered
as a potential target niche for PDT. Small farms will be a secondary target since they are less
developed and have a significantly lower purchasing power. The total market of the company´s
potential sales in Armenia is valued at 15-20 thousand tons of PDT with an aim to cover 40.000ha. In
total, the market of potash fertilizers in Georgia as well as in Armenia is in the embryonic condition.
Therefore, the first step to enter the Georgian market will be to establish the relevant market.
Approximately 35% of the Georgian lands are fertilized by nitrogen fertilizers. Farmers able to buy
nitrogen fertilizers purchase them in sufficient quantities required for fertilizing.Thus, having no need
to buy extra nitrogen fertilizers the said Georgian farmers can buy other products (including potash
fertilizers) in case they are confident about short-term (higher level of crop yield) as well as long-term
results (improved hardiness). In the context of the current agricultural conditions the potential demand
for PDT in Georgia may go up to 75 thousand tons in the medium term (500kg/ha-this estimation is
given for large farmers only, with the total area of 150.000h). In the long term the potential growth of
the Armenian and Georgian markets is seen as higher prosperity of farmers matched by the general
economic development of the country as well as farm expansion trends (investments, cooperative
establishment). Among CIS countries considered (countries bordering Armenia, CIS and Black Sea
countries), Poland,Ukraine, Turkey, Iran and Hungary seem to be the most attractive. These
countries are net importers of significant quantities of potash fertilizers. Market Promotion: the
company plans to implement large scale marketing measures including research and practice
conferences, fertilizer provision to local farmers for approbation, involvement of international and
other networks and organizations maintaining direct cooperation with farmers (multi-level marketing).
Innovative aspects and/or main advantages of the proposal
Armenia has resources of rhyolite dacitic tuff which can increase the productivity of the compound
fertilizer. Key advantages, important features, experiment summary of the product, as well as
financial indicators are outlined in the project. We can provide it in case of interest.

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