Financial message: Positioned for growth

We reduced purchases from third parties, curtailed production, closed smaller and inefficient plants, and focused heavily on assuring financial capacity to maintain operational and strategic flexibility. Throughout the year, we managed to maintain strong cash flow, reduce operating capital and increase our competitiveness.

Overview

Although we have a positive outlook on the fertilizer market, where increasing food consumption is solidly driving demand, we are more vigilant than ever – to remain prepared in the event short-term fluctuations reoccur.

Employing our growth strategy, we saw several key events take place in 2009. Final agreement on the new Lifeco JV in Libya was reached, and we entered an agreement for the construction of the Qafco-6 expansion project in Qatar, both delivering on our strategy to expand in areas with low-cost gas.

Due to increased competitiveness of our European plants we began building the new Urea 7 plant in Sluiskil. The Balderton acquisition similarly adds strong positions in key markets, expanding our presence and sourcing capabilities. 

I am also pleased with the performance of our industrial segment, which showed counter-cyclical development. Here, prices have been far less volatile than in the fertilizer market, and demand remained strong during 2009.

Outlook

At the end of  2009, we saw our NPK production fully-utilized after long-lasting curtailments. We find ourselves better positioned to be the industry shaper than ever before, and through ambitious and disciplined growth, our overall production capacity has increased by more than 50 percent since 2004.

We believe that our industrial segment and our environmental solutions in particular, will continue growing and will account for an even greater part of Yara’s earnings going forward, as governments around the world tighten regulations and seek solutions for better air quality.

Our business is delivering good returns for farmers, industrial customers and shareholders. In a world of great challenges and opportunities, Yara remains dedicated to firm, value-driven growth that strengthens our ability to deliver vital solutions and improve productivity, ultimately increasing yield.