It's no bull that Agrium is a top producer and marketer of fertilizers in the Americas. A leader in the production of nitrogen, the company operates plants in 14 countries on six continents, producing about 10 million tons of nitrogen, potash, and phosphate products per year. In addition to supplying wholesalers, Agrium operates more than 800 fertilizer retail outlets in the US and South America. The company also owns 50% of Profertil, a joint venture with Spain's Repsol YPF that runs Argentina's largest nitrogen plant, and 25% of a nitrogen fertilizers plant in Egypt. After a 2009 bid for CF Industries fell short, Agrium acquired Australian wheat exporter AWB Ltd. for $1.2 billion in 2010.
Agrium's revenues increased 18% in 2010 due to higher sales volumes and stronger product prices. Its Retail segment saw a 13% increase in sales based on higher crop nutrient margins and volumes; the Wholesale group was up 24% on stronger demand for potash, while the Advanced Technologies unit sales grew 29% on increased sales of its Smart Nitrogen product. Global sales saw major gains in the Asia/Pacific and South America regions. Agrium's net income jumped 95% in 2010, due primarily to the rebound in crop nutrient demand and increased margins across all three business units.
The company's strategy is to expand across all three of its business segments with both strategic acquisitions and organic growth through a combination of capacity expansions, improvements to its operating model, and maintaining strong industry fundamentals. The company has primarily used acquisitions to expand its Retail and Advanced Technologies segments, but finds growing its Wholesale business to be more capital-intensive.
Agrium sees the AWB deal as a way to enhance its market presence and improve its product and service offerings in Australia and New Zealand. However, soon after the deal closed, Agrium sold AWB's commodity management businesses to Cargill Incorporated in a deal valued at $917 million. Agrium absorbed the rest of AWB's assets.
In 2012 Agrium expanded its presence in retail operations by agreeing to acquire the agri-products business of Viterra from Glencore International after Glencore closes on its acquisition of Viterra. The buy, for about $1.8 billion, will give Agrium about 90% of Viterra's Canadian retail facilities, all of its Australian retail facilities, and a minority stake in its nitrogen plant in Alberta.
In 2011 Agrium acquired CerealToscana S.A., a fertilizer distribution company in Italy, and Agroport, its subsidiary in Romania, for $27 million. The combined companies have a stable financial record with gross sales of some $200 million. The deal enhances Agrium Europe's existing fertilizer distribution business.
Agrium made its $5.2 billion hostile offer for CF Industries amidst a four-company, year-long bidding war that also included Yara Industries and Terra Industries. Agrium withdrew its offer to buy CF Industries after that company successfully acquired Terra.
The company also purchased 24 retail farm centers in Argentina in 2010 from DuPont Crop Protection. The deal will expand Agrium's Loveland crop-protection products into additional South American countries.
In 2008 it bought agricultural products retailer UAP for $2.5 billion, including assumed debt. In the latter half of the decade, Agrium has implemented an aggressive expansion strategy by acquiring a number of businesses throughout the Americas. The deal for UAP was the largest by far. It greatly added to Agrium's North American retail operations and also expanded the company's international reach.
Other acquisitions have included agricultural products distributor Royster-Clark and two divisions of Spectrum Brands' Nu-Gro subsidiary. The Nu-Gro deal formed the base of Agrium's Advanced Technologies unit, which supplies agricultural products and services in North and South America and sells branded micronutrients and other industrial products worldwide (such as control-released fertilizers for the turf grass, horticulture, and consumer agriculture markets). – less