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Agrium Corporation Fertilizer Production in Brazil. Eric Balsley Russ Dunlap Dave Jaggard Brad Patt Jordana Weiss. Price of Potash. Competition in Brazil Distribution Conglomerates Canpotex (70% of dsn ) Large Mining Companies Vale – Own potash mines, Brazilian

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Presentation Transcript

Agrium Corporation

Fertilizer Production

in Brazil

Eric Balsley

Russ Dunlap

Dave Jaggard

Brad Patt

Jordana Weiss


Price of Potash

  • Competition in Brazil

  • Distribution Conglomerates

    • Canpotex (70% of dsn)

  • Large Mining Companies

    • Vale – Own potash mines, Brazilian

    • BHP Billiton - capacity

  • Existing Potash Companies

    • Cargill (Mosaic) and Bunge

  • Brazilian Market

  • Currently imports 90% of potash (1st)

    • Largest in world

  • World’s 3rd largest potash reserves

  • Self sufficient in 10 years

  • $1.8B/year potential market

  • 4.1% growth rate (3rd)

  • Agrium Potash

  • 5% of global potash supply

  • Concerns Moving Forward

    • Overreliance on Canpotex for intl. dsn.

    • Distance from growing markets

    • N.A market growth slowing

    • Growing organic sector


Financial considerations
Financial Considerations

  • MACRO-ECONOMIC CONDITIONS

Inevitable demand & profit impact


Political considerations
Political Considerations

  • Federal Republic, robust checks & balances (1988- )

  • Respected world citizen, WTO & IMF member

  • Socialist/populist leanings


Market entry recommendation
Market Entry Recommendation

  • Produce fertilizer in Brazil via JV

  • Focus on large-scale wholesale market

  • Joint Venture Characteristics

    • Leverage Agrium’s capabilities in manufacturing & logistics

    • Partner with other multinational (BHP, Cargill/Mosaic)

    • 30% share in $0.9-$1.1B investment in mining & production

  • Risk assessment

    • Financial & political risks moderate & manageable

    • Domestic entry aligns with government

    • Preserves Agrium presence in Brazil

    • JV model spreads risk & overcomes holdup problems



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