Yara assumes leadership in fertilizers in Brazil

The participation of the Norwegian company Yara in the Brazilian market of fertilizers is expected to jump from 10% to 25% after completion of the acquisition of Bunge fertilizer business in Brazil, announced on Friday. Accordingly, the company will take over the leadership of the segment in the country.
Buying fertilizer assets that Bunge still held in Brazil by Yara was announced in December 2012 and approved in May this year by the Administrative Council for economic Defense (Cade). The transaction was closed for $ 750 million and includes a net working capital of $ 385 million, in addition to other assets in the amount of US $ 365 million.
The value of working capital is still subject to adjustments. From 2014, Yara plans to obtain annual synergies worth $ 50 million with the integration of operations.
In a statement, Bunge reported that the sale to Yara includes mixing facilities, brands and department stores. The American multinational also revealed that, through a long-term supply contract signed with Yara, will continue to sell fertilizers to farmers in Exchange for future crops as part of their grain origination operations.
Yara had 11 agitators and a phosphate production facility in the country, and now will incorporate more 21 mixers and two production sites also phosphatic fertilizer. With this, the marketing of fertilizers is expected to increase from 3 million to 8 million tons per year, said Lair Hanzen, President of Yara Brazil, to value.
Hanzen stated that the process of integration of Bunge must be finalized by December. Yara began to expand its presence in the country after the purchase of Fertilizers clover, in 2000. In 2006, acquired Fertibras. But the "big step" was even in 2012, with the agreement for the purchase of fertilizer business of Bunge.
"This obviously is not the largest investment held by the company, but is the largest investment that Yara has done throughout its history in distribution," said Hanzen. The Executive stressed that the expansion happens "in a context in which the country has been profiling to be the breadbasket of the world".
According to Carlos Eduardo Florence, Executive Director of the Association of fertilizer Mixers (Ama-Brazil), Yara will assume the role occupied by Bunge in the Brazilian market leader in recent years and will compete in a very competitive market. "Who wins is the producer," he says.
Most of the revenues of Yara in the country comes from the NPK products (traditional fertilizers), but the company also sells micro-nutrients and differentiated products. With a strong presence on the world market, mainly in the area of nitrogenous fertilizers, Yara is present in 50 countries and distributes products to 150 different markets.