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Focus on fertile growth Yara International

FOCUS ON FERTILE GROWTH

Yara International is a global leader in the development and manufacture of nitrogen-based fertilisers. Today the company continues to see strong growth in all its product sectors. With new acquisitions in the US and South America, Yara is set to significantly increase its global market share, as Philip Yorke reports.

Yara International is headquartered in Oslo, Norway and its core business is the production of nitrogen-based fertilisers, which is closely connected to global agricultural productivity and food production. The company’s development is rooted in the Norwegian industrial company, Norsk Hydro, which was founded in 1905. In that year Sam Eyde, Ktistian Birkeland and Marcus Wallenberg tapped into Norway’s large energy resources to produce the company’s first agro-chemical product: mineral fertiliser. This new product attracted interest worldwide since it enabled farmers to significantly boost their yields.

Decades later the company’s agricultural products and co-products were spun off to become Yara International ASA, which

debuted on the Oslo Stock Exchange in 2004. In 2013 Yara recorded sales of more than NOK 84 billion and employed over 9700 people. Today Yara has a global presence with operations and offices in more than 50 countries worldwide and sales to over 150 others.

Innovative industrial solutions

Yara offers the most comprehensive range of fertilisers in the industry and its portfolio runs from single nutrient fertilisers to highly complex compounds and micronutrients for feeding plants. The company is a leading producer of ammonia, nitrates, NPK (nitrogen, phosphorus and potassium) and speciality fertilisers.

Today Yara International offers tailor made and integrated solutions for optimising industrial processes, water treatment and the prevention of air pollution. This includes innovative NOx abatement solutions for industrial plants, vehicles and vessels. Other areas of expertise include in CO2, dry ice and innovative solutions for the civil explosives and mining industries.

Expanding global operations

Spearheading the company’s drive for an increased global presence is Yara’s newly appointed CEO, Torgeir Kvidal, who had served as chief financial officer since May 2012 and was previously in an executive position with Norsk Hydro. Kvidal takes over from Jorgen Ole Halstead who pioneered the global expansion of Yara in recent years.

In October this year Yara International significantly increased its presence in the US and its global sales with the acquisition of OFD Holding Inc. OFD owns and operates a major fertiliser production facility in Cartagena, with an annual capacity of over 320 kilotons (kt) compound NPK, 100kt calcium nitrate (CN) and 70kt of ammonium nitrate (AN). OFD also controls approximately 700kt of NPK blending capacity across 12 sites throughout Columbia, Mexico, Peru, Bolivia, Costa Rica and Panama.

This expansion represents an important milestone for Yara as it paves the way for further development in Latin America and follows on from an earlier acquisition of a similar scale in Galvani, Brazil only a couple of months earlier. Galvani is a leading player in the production of phosphate mining and the distribution of fertilisers in the centre and

north-east of Brazil. This important acquisition will also help Yara to a secure phosphate fertiliser capacity in the centre of the country, with cost-effective solutions for mining, production, blending and warehousing facilities.

Increasing fertiliser capacity in Norway

In October this year, the board of Yara International approved an investment of NOK 2.25 billion in order to increase its value-added fertiliser capacity at its Porsgrunn plant in Norway. This significant new investment will add 50kt of compound NPK annual capacity and a further 200kt of calcium nitrate. In addition, the investment will enable optimisation of production in Yara’s Glomfjord and Usikaupunki plants, thus adding a further 150kt of annual NPK production to the company’s output.

Acting CEO and president of Yara, Torgeir Kvidal, said, “This investment confirms Yara’s ambition to create value through brownfield expansions and de-bottlenecking projects. Furthermore, it strengthens our position as the global NPK leader and shows our dedication to provide farmers with premium products and agronomic competence to increase agricultural productivity.”

This major project also includes a new-build nitric acid plant and innovative technology applications, which bring down greenhouse emissions, improve energy efficiency and reduce waste. Construction of the site has already begun and is expected to be completed in 2017.

Record sales

Yara’s global fertiliser deliveries were up by 16 per cent compared with the same period last year, mainly driven by Brazil with the inclusion of Bunge volumes from August 2013. Excluding Brazil, fertiliser deliveries achieved 6 per cent growth compared with the same period last year. Yara’s margins also benefited from lower energy costs, as the company’s average oil and gas cost decreased by 19 per cent.

Based on current forward markets for oil products and natural gas, Yara’s European energy costs over the next two quarters are expected to be NOK 1.15 billion lower than a year ago. The company acknowledges that its many suppliers of high quality raw materials, manufacturing equipment and logistics play a vital role in its on-going success and this will be reflected in the company’s plans for 2015, at which time it celebrates its 110th anniversary. n

For further details of Yara International’s innovative products and services visit: www.yara.com

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