About Yara

2008: Yara divests to re-deploy funds

Yara made a number of divestments in the first half of 2008, mainly to re-deploy funds to enhance its overall growth strategy. The divestments also complied with EU commitments regarding Yara’s acquisition of Kemira GrowHow Oyj.

Divestments

In early April, Yara announced that it would sell 50 percent of its shares in China Blue Chemical Ltd. The stake in China Blue was acquired in 2006 and constituted 9 percent of the total free float of the company. The net gain from the sale was expected to be approximately USD 22 million. Yara also reaffirmed its strategic intent to increase its presence in China.

In late April, Yara sold its indirect holding in the Chilean mining company, Sociedad Quimica y Minera de Chile, S.A. ("SQM") and followed this by selling some of its chemical supply activities to global chemicals distribution corporation Brenntag.

The SQM divestment yielded a pre-tax profit of approximately USD 80 million. Yara emphasized that its 2001 agreement for the global marketing of specialty SQM fertilizers would continue.

Yara’s sale of various chemical supply activities at its production sites in Köping, Sweden and Tertre, Belgium (formerly Kemira GrowHow) to the Brenntag Group was part of an agreement with the European Union regarding Yara’s acquisition of Kemira GrowHow Oyj. Related production and distribution assets formed part of the sales package, which resulted in a gain of EUR 11 million, booked in Yara's second-quarter results.

Investments

In February Yara announced its plan to establish a joint venture with Deepak Fertilisers and Petrochemicals Limited (DFPCL) based in Pune, India. Yara will own 49 percent of the joint venture company, which aims to produce and market technical ammonium nitrate and specialty fertilizers across India.

Later in February, Yara invested in an 80,000-ton state-of-the-art fertilizer storage facility at the Port of Stockton in California. Scheduled for completion in the first quarter of 2009, the USD 21 million facility aims to improve Yara's reach into the surrounding agricultural areas in Oregon, Washington, Idaho and southern Arizona and to create a platform for growth in the US market.

In May, Yara unveiled plans for a new technical ammonium nitrate (TAN) plant in Australia. Burrup Nitrates, a 50/50 joint venture between Yara International ASA and Burrup Holdings Pty Ltd (BHPL), will own the 350,000-ton capacity plant. The plant will primarily supply the fast-growing iron ore mining operations in the Pilbara region of North Western Australia. Yara already held a 30 percent stake in BHPL, which it boosted to 35 percent in September 2008.

Later in May, Yara increased its presence in North America by acquiring 25 percent of fertilizer products and services supplier Agrico Canada Ltd. The new partnership aims to create logistics synergies and to reinforce Agrico Canada’s focus on value-added services and customer care.

July saw Yara strengthen its scale and position in North America once again by agreeing to acquire Canadian nitrogen producer Saskferco. The CAD 1.6 billion transaction will add production and distribution capabilities that are an excellent strategic fit with Yara’s existing assets in the region.

Yara concluded its 2008 investments with a capacity expansion project at its phosphate rock mine in Siilinjärvi, Finland. The EUR 60 million investment will increase capacity from 850,000 tons to 1 million tons per year. This strengthens the scale and competitiveness of Yara’s rock mining operations in Finland while increasing sourcing flexibility for its NPK fertilizer production. The project is scheduled for completion during the fourth quarter of 2009.

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