Investor Relations

Operational Performance 2008

Challenges and Issues

Yara applies its core business and key knowledge to make positive impacts within four prioritized areas – four shaping issues. At the same time, these issues are essential in Yara’s own business development.

Energy supply

In 2008, Yara strengthened its efforts to improve energy efficiency in its global production base. Through a new energy savings initiative, Energy Hunters were introduced at all production plants to drive energy improvements by supporting and pushing the production organization and establishing energy saving projects at each plant.

In 2008, the “Systematic Energy Management” initiative was anchored as one of four global top priorities in Yara’s Upstream segment. Facilitated by a newly developed software tool, the energy management system will be implemented and mandatory for all sites in 2009, aiming to improve reporting of energy consumption and support daily energy efficiency follow-up and analysis of savings potentials.

Climate change

In 2008, Yara reached its ambitious goal of reducing the company’s carbon footprint by 25 percent from 2004 to 2009, a year ahead of schedule. This was made possible by Yara’s technology innovation, specifically the N2O catalyst technology that reduces N2O emissions from nitric acid production by 70–90 percent.

In 2008, Yara installed this technology in several of the company’s nitric acid plants. Furthermore, the technology is used in nearly half of all projects for nitric acid plants covered by the Clean Development Mechanism under the Kyoto Protocol worldwide. Globally, it has a ­potential to reduce GHG emissions from such plants by close to 100 million tons of CO2 equivalents per year.

Greenhouse gas emissions vs target

Greenhouse gas emissions vs target View graph

Reduction potential with N2O catalyst

Reduction potential with N2O catalyst View graph

Food security

In 2008, Yara reiterated its commitment to the African green revolution, including the novel private-public partnership ‘Agricultural Growth Corridor Initiative’, aiming at upgrading port facilities at Beira, Mozambique and Dar es Salaam, Tanzania. This is part of a regional strategy for harmonizing transport hubs in the fertilizer delivery chain, linked to partnerships to improve input efficiency.

In 2008, Yara contributed to global food production and food security through its global reach, with sales of 20.5 million tons of crop nutrients, and sharing its extensive agronomic knowledge on how to improve agricultural productivity. All in all, about one third of the protein consumed by mankind is estimated to be the direct result of the application of ­mineral fertilizers.

Health concern

In 2008, Yara’s NOx abatement technologies contributed to a reduction of approximately 440 000 tons of NOx emissions from customers’ applications in Europe, including reductions from vehicles as well as stationary and maritime applications. Yara’s sales of NOx solutions grew throughout 2008, with significant increases in the sales of Air1®, which is available across Europe.

Contributions to reduce NOx emissions

Contributions to reduce NOx emissions View graph

Production development

Yara’s plants have shown a solid production increase for ammonia and finished fertilizer products over the years, improvements being driven by continuous production enhancements. Recent growth has been driven by the acquisitions of Kemira GrowHow (Finland) in 2007 and Saskferco (Canada) in 2008, and the establishment of the Lifeco joint venture company (Libya), which was completed in 2009.

Yara’s operation – like other parts of the industry – was affected by the market turmoil at the end of 2008, experiencing a sharp drop in demand, resulting in major sales reductions in the fourth quarter. Yara management decided to reduce third-party sourcing and curtail own production, at the same time building stocks, in order to handle the market volatility.

Yara is one of the most energy efficient fertilizer producers, and the company has technically upgraded most of its ammonia plants to optimize their energy efficiency. As a result, nine of Yara’s 15 ammonia plants perform better than the European average with regard to energy efficiency, according to Plant Surveys International’s benchmarking surveys for EFMA and IFA 2006/2007.

In Norway, Yara and the Norwegian public enterprise Enova are investing heavily in efforts to improve energy efficiency at the Yara Glomfjord and Yara Porsgrunn production sites. At Yara Porsgrunn, which is the company’s – as well as Europe’s – largest NPK plant, the project aims to reduce annual energy consumption at the plant by 300 GWh by 2011. Yara will receive project funding of up to 20 percent from Enova, whose main mission is to encourage energy savings and efficiency in Norwegian industry and households. The agreement with Enova is the largest of its kind to date.

Energy Hunters

Yara has a so-called Energy Hunters in place at the Porsgrunn plant as well as in other major production plants. The Energy Hunters are local drivers of Yara’s “Systematic Energy Management” initiative (see fact box page 17). Yara Sluiskil has piloted the initiative, and installation of a newly developed software tool monitoring and analyzing energy losses has already led to 0.55 percent decrease in energy consumption, equaling annual energy costs of close to EUR 2 million.

At Yara Brunsbüttel, systematic root cause analysis using a tailored technique to identify leakages has led to energy savings worth up to EUR 800,000, demonstrating the value of systematic energy management. Under this initiative, Yara also intends to develop a central strategy for making use of waste energy.

People development

In the face of the economic slow-down, with sharply reduced demand for fertilizers in the fourth quarter, Yara followed up on its policy of avoiding unscheduled or temporary layoffs of employees throughout 2008.

Diversity and equal opportunities are fundamental principles in Yara’s people development policy, aiming to take the company’s global talent pool to its full potential. In 2008, the first class of employees graduated from Yara’s Leadership Assessment and Development Program (LEAD), with 20 different nationalities represented, of which 23 percent were women.

Since its launch in 2006, LEAD has provided great insight in the company’s pool of talented individuals. In 2008, Yara launched a new employee engagement initiative, Yara Essential, aiming to enhance networking and knowledge transfer between leaders and specialists within the global organization. Also, Yara’s induction and training program, The Yara World, proved its success and will be further developed.

Product Stewardship

The principles of Product Stewardship, as set out by the European Fertilizer Manufacturers Association (EFMA), guide all of Yara’s activities. In 2008, Yara scored well above acceptance levels and was recertified to EFMA’s Product Stewardship Program by independent auditors as part of the triennial certification process required by EFMA.

The European Union regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) came into force in 2007 and requires extensive testing, evaluation and registration of chemicals to safeguard human health and the environment. In 2008, Yara completed the pre-registration of all relevant manufactured and imported critical substances in accordance with REACH. Yara is cooperating closely with suppliers, customers and the industry to carry out the extensive testing and documentation needed to ensure compliance with the requirements by 2010. 

As the world’s leading supplier of fertilizer, Yara is strongly committed to improved management practices: optimizing yield while minimizing application of mineral fertilizers. The production of fertilizer is energy-consuming – causing emission of greenhouse gases to air, at the application can have detrimental effects on the environment – causing leakage to water. Yara constantly works to develop improved ways to apply fertilizers, reducing the amounts of nutrients as well as the water needed. Through developing new fertilizer products and sharing its application knowledge, Yara promotes balanced fertilization and support the development of sustainable agriculture.

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