Major Fertilizer Project Completed in Canada, More to Follow

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Researched by Industrial Info Resources (Sugar Land, Texas)--Yara Belle Plaine Incorporated (Belle Plaine, Saskatchewan), a subsidiary of Yara International ASA (OTC:YARIY) (Oslo, Norway), is nearing the completion of a major expansion of the company's nitrogen fertilizer plant located in Belle Plaine. Construction of the estimated $100 million expansion project began early last year under then-owner Saskferco Products Incorporated. In the summer of 2008, Yara entered an agreement to purchase the plant site, and the progress of the expansion maintained momentum. Upon final startup, the expansion will increase the plant's capacity by 200 tons per day of urea and 400 tons per day of ammonia, making Yara among the largest fertilizer producers in Canada.

Yara Belle Plaine is one of several fertilizer producers in Canada and is certainly not alone in its plans to increase or expand capacity. Canadian Fertilizers Limited (Medicine Hat, Alberta) has been considering options for expanding ammonia production for nearly two years, according to project information reported by Industrial Info as part of its North American Projects Database. Canadian Fertilizers operates two ammonia-production units at its Medicine Hat plant and is considering the expansion of one or both units. CF Industries Holdings Incorporated (NYSE:CF) (Deerfield, Illinois) is in the early stages of considering expansion options for its fertilizer complex in Medicine Hat. Expansion plans by CF include the possibility of constructing an entirely new urea unit at the site.

The agricultural chemical producers, specifically the fertilizers segment of the North American Chemical Processing Industry (CPI), are suffering far less than many of their peers in the current economic recession. Farm plantings have remained steady for the past year, while the price of natural-gas feedstock has remained low. The cost of fuel for farmers has also dropped substantially from the highs of summer 2008. In addition to the projects mentioned, there are nearly a dozen other Canadian capital and maintenance projects in this segment that are planned to occur within the next couple of years. Considering that much of the planned future capacity is not forecast to come online until 2011 or 2012, the timing of this could play out well, as the overall CPI should have recovered significantly by this time.

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