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Agri better poised to meet market head on

February 11, 2002, 00:00 CET

Global market conditions for fertilizers were "pretty good" last year, says Thorleif Enger, executive vice president responsible for the Agri business.

Prices in some of Hydro Agri's markets remained relatively weaker than the average of a normal business cycle , but the organization is stronger as a result of its Turnaround program to cut costs.

Hydro produces the key input for fertilizer manufacture - ammonia - both for its own consumption and for external sales. In the United States, prices for natural gas used to make ammonia started off high in early 2001 but declined during the year, weakening ammonia prices along the way. Hydro sells much of its ammonia production from Trinidad, while the production consumption equation is nearly balanced in Europe.

"In Europe," - Hydro's core market for fertilizers - "prices for our main products continued the positive trend that started in 2000," Enger says.

A key influence on fertilizer prices in Europe is external imports of products from the former Soviet Union countries. In the 2000-2001 season, these imports jumped 30 percent. In the first half of the 2001-2002 season, however, imports are down by almost 20 percent.

Looking ahead to the next two to three years, Enger sees positive trends in international markets. "Still, we can expect global market growth of 2 to 3 percent.

And following the Turnaround program, Agri is better poised than many of its competitors to meet these market conditions," Enger says.

"We will grow more than the market by increasing our market share. That growth will be strong in emerging markets and in high-margin areas.

"The Turnaround program is another reason why we can expect to grow. Our organization is poised to take advantage of the consolidation that's expected in the next years in the industry.

"Our competitors aren't standing still, but the rate of improvement for Hydro has been better.