Jørgen Ole Haslestad, President and CEO

Positioned for growth
In 2009 our business model was put to the  test following the dramatic decline in fertilizer sales at the end of 2008. We reacted with determination, employing our scale advantage, unique flexibility and unrivalled presence. We reduced purchases from third parties, curtailed production, and closed smaller and inefficient plants.  We focused on assuring financial capacity to support operational and strategic flexibility. Throughout the year, we managed to maintain strong cash flow, reduce operating capital and increase our competitiveness.

OVERVIEW
Although the outlook for the fertilizer market is positive, with increasing food consumption solidly driving demand, we are more vigilant than ever. We remain prepared for new short-term fluctuations.

Several key events in 2009 contributed to our growth strategy. We reached final agreement on the new Lifeco JV in Libya, and signed an agreement for the construction of the Qafco-6 expansion project in Qatar, delivering on our strategy of expanding in low-cost gas areas.

Due to the increased competitiveness of our European plants we commenced construction of the new Urea 7 plant in Sluiskil. Similarly the Balderton acquisition added strong positions in key markets, expanding our presence and sourcing capabilities.

I am also pleased with the performance of our industrial segment, which showed countercyclical development. Here, prices were 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 lengthy curtailments. We are better positioned than ever before to be the industry shaper, 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 to grow and will account for an even greater part of Yara’s earnings in the future, as governments around the world tighten regulations and seek solutions for better air quality.

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

Annual Reporting 2009