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Summary

Brazil has emerged as a global agricultural powerhouse, contributing to world food security. Yara is a leading partner in Brazilian agriculture, with crop nutrition solutions helping to cope with climate change.

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Growing in Brazil – Creating Impact

Oslo, March 24, 2014

Yara has established a strong position in the still growing farming sector of Brazil, one of the world’s major agricultural producers. Brazil is our largest single market for mineral fertilizers, where we support improved productivity and engage in agronomic research.

Brazil is a major growth market. The country’s economy has grown to become the world’s sixth largest – and Brazil is now the third biggest agricultural exporter in the world. As the world’s leading provider of high-quality crop nutrition, Yara has been engaged in this market – and the Brazilian agricultural success story – since the 1970s. In recent years we have executed our growth strategy by increasing our footprint in Brazil.

“Improved agricultural productivity is a key concern that preoccupies Brazil and Yara alike.”

Strategic position

With agricultural expansion really taking off in Brazil in the 1990s, Yara (then Norsk Hydro) took an early decision to position itself strategically in the emerging market. After having opened a sales office in Rio de Janeiro in 1977, Hydro started a limited operation with small blenders.

Entering the new millennium, we made our first major investment in Brazil, acquiring the Porto Alegre-based fertilizer company Adubos Trevo. With the acquisition of Fertibràs in 2006 we became Brazil’s second largest fertilizer company. We expanded our presence further by obtaining the fertilizer business of Bunge in 2013. This made Brazil our single largest market, taking off about a quarter of our global fertilizer sales. Sales of our environmental solutions have increased since the introduction of our NOx emissions abatement reagent Air1 (known as Arla 32 in Brazil) in 2011.

Yara Brazil is now the largest downstream business within the company – and it profits from scale advantages. Considering additional growth opportunities, our main attention is on increasing sales of premium offerings – increasing yields.

Agricultural growth

Brazil’s farming sector has grown tremendously and is destined for further growth. As the world’s third largest agricultural exporter Brazil has taken a lead position for several crops – and is expected to reinforce its position. Main crops include soybeans, maize and sugarcane; the latter is used in the country’s vital bio-energy (ethanol) sector, while soybeans constitute an important feedstock.

The major challenges facing Brazilian agriculture are those of logistical hurdles and environmental concerns. Continued growth depends on improved productivity, as well as on expanding agricultural land. In Brazil, the latter is an option – even at limited environmental costs. An official estimate says that an additional 250 million hectares can, theoretically, be added to Brazil’s existing farmland of 69 million ha. No other country has comparable land resources fit for farming – and the supporting water resources.

Improved agricultural productivity is a key concern that preoccupies Brazil and Yara alike. Scientific research has been a key to Brazil’s agronomic success, and innovation is still high on the agenda. Yara’s crop nutrition solutions aim at improving productivity and profitability, underpinning sustainable agriculture. Our nitrogen fertilizers help realize the great potential of a second harvest for major crops, especially maize. In 2012 we entered into an agreement with Brazil’s foremost agricultural research institution, Embrapa, to improve efficiency of nitrogen fertilizers in tropical soils – increasing yields while minimizing the carbon footprint.

Brazil is the world’s fifth largest country in terms of land size, and logistics - bringing inputs to farmers and transporting their produce to markets - are a challenge. For Yara, both port capacity and distribution systems have high priority. We have an extensive distribution system throughout the country, also involving major retailers.

Creating impact

Brazil makes a global difference with its agricultural production; feeding its own population and producing a surplus constituting a major contribution towards food security. As a market leader in nitrogen fertilizers – vital to crop growth – Yara is a part of this feat, creating impact in Brazil, and with Brazil.

Looking ahead, the major impact to be created in and by Brazilian agriculture is by realizing the potential of further productivity improvements. Thereby, growth can continue to buttress the Brazilian economy and improve global food security – while reducing the climate effects of farming by minimizing land use change and the emission of greenhouse gases.


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