Norway's Yara earmarks US$275mn for Brazil expansion

Norwegian fertilizer company Yara International announced investments of about 1bn reais (US$275mn) in expanding and modernizing the company's Rio Grande plant in southern Brazil.

"This expansion represents another step in our Brazil growth strategy, further establishing our position in Brazil as a long-term industry player, committed to developing and investing in Brazilian agribusiness," Yara president and CEO Svein Tore Holsether said in a release.

The expansion project will double the site's current 800,000t/y fertilizer output and blending capacity, helping reduce reliance on finished fertilizer imports. The plant already operates its own recently modernized and expanded wharf, which is connected to the railway network and the industrial complex, the release said.

The investment follows about US$1.5bn in expansions and acquisitions by Yara in Brazil in recent years, including the Bunge (2013) and Brazilian miner and fertilizer company Galvani (2014) acquisitions and the recent construction of blending and bagging terminals in the country.

The investment is set to be completed by 2020, Yara said.

BRAZIL OPERATIONS

In November 2015, Yara paid 1.09bn kroner (around US$231mn) deferred consideration and capital injection on behalf of minority shareholders for the Salitre phosphate project, based on project progress and in accordance with agreements entered into with the acquisition of 60% of Galvani on December 1, 2014.

Last year, Yara made a US$132mn capital injection in the Salitre phosphate project upon confirmation of phosphate reserves. The company also increased capacity at its Rondonópolis blending unit by 350,000t.

Last month Yara reported that revenue from its Brazilian operations reached 26.4bn kroner, accounting for 24% of the group's total. Brazilian revenue was the second highest for the company, behind that generated by its operations in Europe.

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