Scope#17 | Boric Acid Trading (BOR)

What’s Inside Your Smart Phone?

On the far eastern coast of Russia lies the town of Dalnegorsk. With a population of about 40,000, the tiny town is so compact that one could see everything there is to see in the whole place rather quickly. Dalnegorsk is a quaint little town known for its UFO sightings and as the habitat of a rare species of butterfly.

One large industry sustains this small town – the production of boric acid. While boric acid is an indispensable material in the production of precision instruments such as mobile phones, LCD TV screens, and optical fibers that are an essential part of our daily lives, it is only produced in four countries around the world—Turkey, the US, Chile, and Russia.

“The only area producing boric acid in Russia is Dalnegorsk, and we, BOR, are the one and only manufacturer,” explains Managing Director Dmitry Rachkov. BOR has been trading boric acid in partnership with Marubeni for over 40 years.

BOR manufactures boric acid by mining high-quality ore from a mine owned by the company. Marubeni buys boric acid from BOR and exports it to countries in Asia, including Japan, which is one of the world’s major producers of precision instrument products. 

Shipments are sent out from a port located on the Japan Sea coast that is used exclusively by BOR. Logistically, this location is ideal for Marubeni to export to Japan or to use as an entry point to other APEC regions. 

This is where Marubeni takes over the process from BOR, becoming solely responsible for product delivery and inventory management, and making reliable and speedy deliveries to its customers.

Looking at the entire process, one can see that Marubeni and BOR together make up one professional team. “Marubeni acquires this rare, high-quality boric acid from BOR, and BOR is able to penetrate the Japanese market, the most high-tech market in the world, with its own product. It’s a win-win relationship,” says Mr. Rachkov, emphasizing the reciprocal relationship between the two companies.

This whole process starts with the mining of Datolite ore – a beautiful crystalized mineral. Production Director, Mr. Glaz showed us around the mine.

“Here is an open mine called Zapadnaya, where Datolite ore extraction takes place. The green appearance is due to a component of the Datolite from which the boric acid will be derived.”

The extracted ore is taken by truck from this mine to an ore enrichment factory. BOR uses a uniquely developed technology to produce boric acid from Datolite. “The production method for boric acid differs according to the mineral and scientific composition of the Datolite. Our technology has been developed specifically for the specific type of ore that we mine here.” continues Mr. Rachkov, “Since the production of boric acid began in 1964, the technology used to produce it has been improved over and over again. As we chase after the ever evolving universal trends of boric acid production, BOR employees from a variety of working divisions as well as laboratory researchers are constantly seeking out the best methods for our own unique situation.”

This unique process allows BOR to produce approximately 100,000 tons of boric acid per year. The laboratory at BOR is charged with ensuring the high quality of the product, making it arguably the most important single part of the production cycle. Ms. Boyasheva, the laboratory head researcher, explains, “From our laboratory, we have full control over the boric acid synthesis process, from turning the ore into powder, to mixing it with liquid (slurry) and finally to the creation of the finished product.”

While this is where the story ends for the boric acid, the most important result of this partnership to Mr. Rachkov is not just the boric acid, but the people of Dalnegorsk as well.

“I feel strongly that this cooperation is beneficial not only for the company but also for Dalnegorsk as a whole. The company currently has around 2,500 employees. Including their family members, this is 7,500 people. I was born in this city and have spent the majority of my life here. This is why this partnership with Marubeni is extremely important to us.”

Without BOR and Marubeni, Dalnegorsk would likely be a very different place. After talking with many of the employees here, it is clear that their job is to produce boric acid, but what really motivates their daily activities is the long-term health and success of the people of Dalnegorsk. “While this partnership with Marubeni is almost 40 years old, I hope this continues for at least another 40 years,” says Mr. Rachkov with a smile.

“I hope Marubeni continues its strong growth because Marubeni's development will ultimately lead to BOR's development as well.”

With the ever-increasing demand for high tech devices, boric acid will continue to be an essential ingredient for the manufacturing of these products by companies all over the world. This mutually beneficial partnership between BOR and Marubeni, it seems, is just beginning.

All information contained in this article is based on interviews conducted in September 2017.