ACRONACRON

INVESTOR PRESENTATIONINVESTOR PRESENTATION

20062006

22

33

COMPANY OVERVIEWCOMPANY OVERVIEW

Acron Holding is a major mineral fertilizer producer in the world. It ranks Acron Holding is a major mineral fertilizer producer in the world. It ranks fourth in Europe in terms of output volume of nitrogen and phosphate fourth in Europe in terms of output volume of nitrogen and phosphate fertilizers. fertilizers.

Acron owns and operates three agrochemical facilities: JSC Acron (Veliky Acron owns and operates three agrochemical facilities: JSC Acron (Veliky Novgorod, Russia), JSC Dorogobuzh (Smolensk Region, Russia) and Novgorod, Russia), JSC Dorogobuzh (Smolensk Region, Russia) and Shandong Hongri Acron Chemical Joint Stock Company, Ltd. (Shandong Shandong Hongri Acron Chemical Joint Stock Company, Ltd. (Shandong Province, the PRCProvince, the PRC)*.)*.

Besides, Acron holds stakes in two producers of raw materials for fertilizer Besides, Acron holds stakes in two producers of raw materials for fertilizer industry – JSC Apatit, JSC Silvinit, and gas-producing JSC Sibneftegazindustry – JSC Apatit, JSC Silvinit, and gas-producing JSC Sibneftegaz..

In addition, in October 2006 CJSC North-Western Phosphorous Company In addition, in October 2006 CJSC North-Western Phosphorous Company established by Acron Holding, won the tender for development of two established by Acron Holding, won the tender for development of two apatite-nephelinic ore deposits in Oleniy Ruchey (reserves of 392 million apatite-nephelinic ore deposits in Oleniy Ruchey (reserves of 392 million tonnes) and Partomchorr (reserves of 800 million tonnes), which will provide tonnes) and Partomchorr (reserves of 800 million tonnes), which will provide in full the Holding’s facilities with the apatite raw material.in full the Holding’s facilities with the apatite raw material.

Among Acron’s projects is the construction of its own transhipment port Among Acron’s projects is the construction of its own transhipment port terminal in Sillamae (Estonia) with the capacity of 1 million t/y of ammonia terminal in Sillamae (Estonia) with the capacity of 1 million t/y of ammonia and 700,000 t/y of liquid fertilizers, which will significantly improve Acron’s and 700,000 t/y of liquid fertilizers, which will significantly improve Acron’s logistics. logistics.

** Since Hongri Acron was incorporated in Acron Holding in May 2005, all figures through 2004 present consolidated Since Hongri Acron was incorporated in Acron Holding in May 2005, all figures through 2004 present consolidated data for JSC Acron and JSC Dorogobuzh, and exclude Hongri Acron performance.data for JSC Acron and JSC Dorogobuzh, and exclude Hongri Acron performance. 20052005, 2006, 2006 and prospective data include JSC Acron, Dorogobuzh and Hongri Acron and prospective data include JSC Acron, Dorogobuzh and Hongri Acron. .

44

COMPANY STRUCTURECOMPANY STRUCTURE

JSC Acron

Hongri Acron

JSC SibneftegazJSC Silvinit

JSC Dorogobuzh

CJSC Nordic RusHolding

JSC ApatitFigures show stakes in charter capital in percentage terms.Voting interests in percentage terms are specified in brackets.

7.73%

(10.3%)

11.8%

(14.28%)

65.57%

(77,26%)

51%

50.5%

21%

6.08%

(8.1%)

8.54

CJSC NWPC

AS BCT51%

95,0%

(100%)

55

KEY COMPETITIVE ADVANTAGESKEY COMPETITIVE ADVANTAGES

Domestic facilities of the Holding are most advantageously Domestic facilities of the Holding are most advantageously located in terms of proximity to ports as compared with located in terms of proximity to ports as compared with other producers – the distance from Acron to the nearest other producers – the distance from Acron to the nearest Baltic port is 190 km, from Dorogobuzh – 680 km, while Baltic port is 190 km, from Dorogobuzh – 680 km, while most plants are 1,500 to 2,500 km away from main sea most plants are 1,500 to 2,500 km away from main sea terminals.terminals.

Acron Holding is one of the most efficient producers of Acron Holding is one of the most efficient producers of nitrogen fertilizers in the CIS with gas consumption ratio of nitrogen fertilizers in the CIS with gas consumption ratio of 1.11.1447 m7 m33 and 1.2 and 1.21212 m m33 per ton of ammonia for Acron and per ton of ammonia for Acron and Dorogobuzh, respectively, which is significantly below the Dorogobuzh, respectively, which is significantly below the CIS average of 1.300 mCIS average of 1.300 m33 per ton. per ton.

A wide product range allows the company to offset the A wide product range allows the company to offset the negative effects of cyclical revenues from the sales of negative effects of cyclical revenues from the sales of mineral fertilizers.mineral fertilizers.

Regional sales diversification allows the company to respond Regional sales diversification allows the company to respond flexibly to fall in demand in some regions by increasing flexibly to fall in demand in some regions by increasing deliveries to other markets (in particular, the company has deliveries to other markets (in particular, the company has strong market position in China and Russia).strong market position in China and Russia).

Low gas consumptionLow gas consumption

Well-diversified Well-diversified product mixproduct mix

Well-diversified marketWell-diversified market

Advantageous location in Advantageous location in terms of proximity terms of proximity

to portsto ports

66

PRODUCTION OF MINERAL FERTILIZERS IN RUSSIAPRODUCTION OF MINERAL FERTILIZERS IN RUSSIA

BASIC TRENDSBASIC TRENDS

Economic downturn in the late 1980s Economic downturn in the late 1980s through early 1990s resulted in a fertilizer through early 1990s resulted in a fertilizer consumption plunge in the domestic consumption plunge in the domestic market. Between 1988 and 1944 it market. Between 1988 and 1944 it decreased by more than ten times. decreased by more than ten times.

Russian domestically oriented fertilizer Russian domestically oriented fertilizer producers were forced to notably cut their producers were forced to notably cut their production and redirect their sales production and redirect their sales abroad. abroad.

1998 economic crisis led to a considerable 1998 economic crisis led to a considerable devaluation of the Russian currency and devaluation of the Russian currency and to a respective improvement of the to a respective improvement of the exporters’ financial standing, which exporters’ financial standing, which enabled the Russian fertilizer producers to enabled the Russian fertilizer producers to rise their businesses. Consequently, in rise their businesses. Consequently, in 2005 the domestic fertilizer output nearly 2005 the domestic fertilizer output nearly doubled to 1990 level. doubled to 1990 level.

Russian fertilizers are highly competitive Russian fertilizers are highly competitive globally due to low internal energy tariffs.globally due to low internal energy tariffs.

It is anticipated that within next years the It is anticipated that within next years the domestic fertilizer consumption will domestic fertilizer consumption will increase in line with a general economic increase in line with a general economic upturn and the consolidation of farms into upturn and the consolidation of farms into large holdingslarge holdings..

Production of mineral fertilizers in Russia, million nutrient tons

0

5

10

15

20

25

1988 1990 1992 1994 1996 1998 2000 2002 2004 3Q2006

Nitrogen Phosphorous Potassium

Consumption of mineral fertilizers in Russia, million nutrient tons

02468

10121416

1988 1990 1992 1994 1996 1998 2000 2002 2004 3Q2006

Nitrogen Phosphorous Potassium

77

OPERATIONAL DATAOPERATIONAL DATA

Acron Holding offers over 40 types Acron Holding offers over 40 types of products. Mineral fertilizers of products. Mineral fertilizers account for more than 80% of account for more than 80% of total revenues, while the rest 20% total revenues, while the rest 20% are generated by organic and non-are generated by organic and non-organic synthetic products.organic synthetic products.

Key Products:Key Products: - ammonia- ammonia

- urea - urea

- ammonium nitrate- ammonium nitrate

- complex fertilizers- complex fertilizers

- methanol- methanol

- formalin- formalin

- urea-formaldehyde resins- urea-formaldehyde resins

- liquid carbon dioxide- liquid carbon dioxide

- polyethylene and polypropylene products- polyethylene and polypropylene products

- catalysts, etc.- catalysts, etc.

Acron Holding mineral fertilizers production,'000 tons

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1999 2000 2001 2002 2003 2004 2005 3Q2006

Acron’s market share of Acron’s market share of mineral fertilizer production in mineral fertilizer production in Russia stands at 1Russia stands at 155%.%.

88

TARGET MARKETSTARGET MARKETS DOMESTIC DOMESTIC

MARKETMARKET The Russian fertilizer market The Russian fertilizer market

offers huge growth potentialoffers huge growth potential..

As Acron production units are As Acron production units are advantageously located close to advantageously located close to major farming regions the major farming regions the company emerged as one of the company emerged as one of the leading suppliers of fertilizers in leading suppliers of fertilizers in Russia.Russia.

Acron Holding sells its products to Acron Holding sells its products to 55 administrative regions of the 55 administrative regions of the Russian FederationRussian Federation..

The Holding’s distribution network The Holding’s distribution network comprises 10 regional comprises 10 regional representative offices and 16 representative offices and 16 specialized agro-chemical specialized agro-chemical businesses, in all key farming businesses, in all key farming regions of the countryregions of the country. . Total Total capacity of dedicated storage capacity of dedicated storage facilities amounts to over 200,000 facilities amounts to over 200,000 tons.tons.

Supplies of mineral fertilizers to the Russian market, '000 tons

0

100

200

300

400

500

600

700

800

1999 2000 2001 2002 2003 2004 2005 3Q2006

99

TARGET MARKETSTARGET MARKETS

EXPORTSEXPORTS Company’s products find a Company’s products find a

ready sale on global markets. ready sale on global markets. Acron exports over 80% of its Acron exports over 80% of its fertilizers. fertilizers.

Key markets include China, the Key markets include China, the USA, Western Europe, and USA, Western Europe, and South AmericaSouth America. .

Acron Holding is actively Acron Holding is actively developing the Chinese developing the Chinese market, which accounts for market, which accounts for over 50% of global mineral over 50% of global mineral fertilizers consumption. In fertilizers consumption. In China, the company registered China, the company registered A KANG, a proprietary brand A KANG, a proprietary brand for complex fertilizers, which is for complex fertilizers, which is constantly in great request.constantly in great request.

All products produced by All products produced by Hongri Acron are sold on the Hongri Acron are sold on the Chinese market.Chinese market.

Sales by regions

Asia33%

Europe25%

CIS3%

Americas19%

Russia18%

Africa2%

1010

FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

• In 2005, Acron Holding managed to materially improve its financial performance due to both increased physical production volumes and growing prices for the whole range of its products.

Sales revenue, USD million

0

100

200

300

400

500

600

700

800

900

2001 2002 2003 2004 2005 3Q 2006

EBITDA and Net Income,USD million

0

20

40

60

80

100

120

140

160

180

200

220

240

2001 2002 2003 2004 2005 3Q 2006

EBITDA Net Income

1111

CAPEXCAPEXInvestments inInvestments in USD mlnUSD mln YearYear

Blended fertilizer production facility, 200,000 tpa (Hongri Acron)Blended fertilizer production facility, 200,000 tpa (Hongri Acron) 22..55 20052005

Methanol production facility, 100,000 tpa (Hongri Acron)Methanol production facility, 100,000 tpa (Hongri Acron) 2424..77 2005-20062005-2006

FormalinFormalin//urea-formaldehyde concentrate, 75,000 tpa and resins, 105,000 tpa production urea-formaldehyde concentrate, 75,000 tpa and resins, 105,000 tpa production facilities (Acron production unitfacilities (Acron production unit))

2020 20052005-2006-2006

Increasing existing methanol capacities to 1Increasing existing methanol capacities to 19292,000 tpa ,000 tpa ((Acron production unitAcron production unit) + ) + ADBADB 25,125,1 2006-20072006-2007

UAN production facility, 500,000 tpa (Acron production unit)UAN production facility, 500,000 tpa (Acron production unit) 24,424,4 2006-20082006-2008

Power plant,Power plant, 100-130 100-130 MWMW ( (Acron production unitAcron production unit)) 8080 2006-20082006-2008

Urea production facility, 300,000 tpa (Dorogobuzh)Urea production facility, 300,000 tpa (Dorogobuzh) 35,235,2 2006-20082006-2008

Construction of transhipment port terminal in Sillamae (Estonia) with the capacity of 1 Construction of transhipment port terminal in Sillamae (Estonia) with the capacity of 1 million t/y of ammonia and 700,000 t/y of liquid fertilizers.million t/y of ammonia and 700,000 t/y of liquid fertilizers.

73,773,7 2006-20082006-2008

Reconstruction of urea production facilities, add 300,000 tpa (Acron production unit)Reconstruction of urea production facilities, add 300,000 tpa (Acron production unit) 6060 20020066-200-20099

Ammonia production facility, 400,000 tpaAmmonia production facility, 400,000 tpa ( (Dorogobuzh)Dorogobuzh) 120120 20020066-2009-2009

Increasing existing ammonia capacities, add 60,000 tpa (Increasing existing ammonia capacities, add 60,000 tpa (DorogobuDorogobuzhzh)) 18,618,6 2002007-20087-2008

Power plant,Power plant, 550 0 MW MW ((DorogobuzhDorogobuzh)) 5050 20020077-200-20088

Increasing existing methanol capacities to 375,000 tpa Increasing existing methanol capacities to 375,000 tpa ((Acron production unitAcron production unit)) 5858 20020077-20-201010

Railroad from the station to the plant Railroad from the station to the plant ((Hongri Acron)Hongri Acron) 44..99 20020088-200-20099

Production of acetic acid (methanol processing), 150,000 tpa Production of acetic acid (methanol processing), 150,000 tpa ((Acron production unitAcron production unit)) 150150 20020088-201-20111

Ammonia production facility, 700,000 tpa (Acron production unit)Ammonia production facility, 700,000 tpa (Acron production unit) 170170 20020088-20-201212

Development of apatite-nephelinic ore reserves by CJSC North-Western Phosphorous Development of apatite-nephelinic ore reserves by CJSC North-Western Phosphorous Company with the capacity of 1.9 million t/y of apatite concentrate and 1.8 million t/y of Company with the capacity of 1.9 million t/y of apatite concentrate and 1.8 million t/y of nephelinic concentrate.nephelinic concentrate.

429,6429,6 2008-20182008-2018

Sulphuric acid production facility, 200,000 tpaSulphuric acid production facility, 200,000 tpa ( (Hongri AcronHongri Acron)) 66..22 20020099-20-201010

Formalin, Formalin, urea-formaldehyde concentrate, resins production facilities, 100,000 tpaurea-formaldehyde concentrate, resins production facilities, 100,000 tpa (Dorogobuzh(Dorogobuzh))

2020 20201010-20-201212

Ammonia processing facility Ammonia processing facility ((Acron production unitAcron production unit)) 222200 2010-20152010-2015

Ammonia processing facility Ammonia processing facility ((DorogobuzhDorogobuzh)) 250250 2010-20152010-2015

TOTALTOTAL 11,842.9,842.9 2005-20152005-2015

1212

STOCK MARKETSTOCK MARKET

During 2004 and 2005, the aggregate market capitalization of the top During 2004 and 2005, the aggregate market capitalization of the top ten Russian producers of mineral fertilizers in the domestic stock ten Russian producers of mineral fertilizers in the domestic stock market increased nearly sixfold to USD8.2 billion from USD1.4 billion.market increased nearly sixfold to USD8.2 billion from USD1.4 billion.

Strong share performance in the industry is explained by enhanced Strong share performance in the industry is explained by enhanced

financial performance, a favorable price environment for mineral financial performance, a favorable price environment for mineral fertilizer producers in global markets, and improved transparency.fertilizer producers in global markets, and improved transparency.

Acron share*** price performance, USD

0

5

10

15

20

25

30

35

40

11.01.05 11.05.05 11.09.05 11.01.06 11.05.06 11.09.06

Bid Ask

*** Shares conversion at 5,800 ratio took place on November 24. After the split 8,222 Acron’s ordinary shares with a par value of RUR29,000 were converted into 47,687,600 shares with a par value RUR5. Prices on graph reduced to nominal value after conversion.

Dorogobuzh share price performance, USD

0

0,1

0,2

0,3

0,4

0,5

0,6

11.01.05 11.05.05 11.09.05 11.01.06 11.05.06 11.09.06

Bid Ask

1313

DIVIDEND HISTORYDIVIDEND HISTORY

JSC Acron Dividends in percentage of its net profit

0

5

10

15

20

25

30

35

40

45

50

2001 2002 2003 2004 2005 1H 2006

JSC Dorogobuzh Dividendsin percentage of its net profit

0

5

10

15

20

25

30

35

40

45

50

2001 2002 2003 2004 2005

%% %%

1414

ACRON HOLDING DEVELOPMENT ACRON HOLDING DEVELOPMENT STRATEGYSTRATEGY

Acquisition and construction of new production facilities (up to

USD3 billion over the next decade)

Maximum transparency

Capitalization growth

An increase in fertilizer deliveries to the domestic market, while

maintaining current export volumes

Achievement of definite leadership in the sector

1515

CORPORATE GOVERNANCECORPORATE GOVERNANCE

IAS reporting

Quarterly disclosures

IAS results auditor

RAS consolidated results auditor

since 1998

since 1997

PriceWaterhouseCoopers

Baker Tilly Russaudit

Corporate Governance Codesince 2005

1616

CONTACTSCONTACTS

Acron HoldingAcron Holding

Alexander PopovAlexander PopovVice-President for Corporate Construction and Financial ControlVice-President for Corporate Construction and Financial Control

Deputy Chairman of the Administration BoardDeputy Chairman of the Administration Boarde-mail: e-mail: popov@acron.rupopov@acron.ru

Alexei MilenkovAlexei MilenkovHead of Information and Analysis DepartmentHead of Information and Analysis Department

e-mail: e-mail: milenkov@acron.rumilenkov@acron.ru

Nadezhda BashkirtsevaNadezhda BashkirtsevaHead of Securities DepartmentHead of Securities Department

e-mai: e-mai: NBashkirceva@vnov.acron.ruNBashkirceva@vnov.acron.ru

37 (2) Prechistenka,37 (2) Prechistenka,Moscow, 119034, RussiaMoscow, 119034, Russia

phone: +7 (495) 246-3326phone: +7 (495) 246-3326fax: +7 (495) 777-0862fax: +7 (495) 777-0862