Yara extends presence in Brazilian market

The second half of 2006 saw Yara establish itself as the second largest fertilizer company in Brazil following the acquisition of Fertibras.

In 2006 Yara acquired 48.09 percent of the shares in fertilizer producer and distributor Fertibras at a cost of USD 126 million. This represented 99.95 percent of voting shares and Fertibras was therefore consolidated into Yara’s accounts.

The acquisition of Fertibras provided Yara with a solid foundation for future growth in the world’s most promising agricultural market. In the decade up to 2006 Brazil was among the fastest growing fertilizer markets in the world, with an average annual growth rate of six percent.

Brazil has great agricultural growth potential, as it is one of the few countries in the world with large tracts of unexploited arable land. Brazil imports approximately 60 percent of its fertilizer consumption. Moreover, the Brazilian fertilizer industry is still relatively fragmented with many small- and medium-size companies.

Local distribution and production
Fertibras owned a network of warehouses and bulk blending plants and in 2006 was selling volumes of up to one million tonnes of fertilizer annually in Brazil.

Fertibras also owned directly and indirectly 15 percent of Fosfertil, the largest producer of nitrogen and phosphate fertilizers in Brazil, as well as significant mining operations. The ownership in Fosfertil gave Yara access to local production and a distribution network that complemented its existing market positions. This meant Yara was well positioned to balance domestic production with imported sourcing from its global distribution network.

President and CEO of Yara International, Thorleif Enger said of the acquisition: “Brazil is one of the most important fertilizer markets in the world and is key to our growth strategy. Yara already has a strong market position and an efficient operation in the country based on the acquisition of Adubos Trevo in 2000. The acquisition of Fertibras will further strengthen Yara’s position and scale, and create a strong platform for further consolidation of the Brazilian fertilizer industry.”