The ratings on Norway-based Yara International ASA reflect its leading position as the world's largest distributor of fertilizers and producer of nitrogen. The enhancement of the product mix with the phosphates business of newly acquired Kemira GrowHow (KGH) and several other industrial products is positive, and the integration of KGH is proceeding on plan. The company runs large-scale plants in Europe and has no production assets in the U.S. It benefits from low-cost gas supplies through joint-venture operations (about 30% of total production) in Trinidad, Qatar, Russia, and Australia and from a strong global marketing and distribution network. The ratings remain constrained, however, by the high cyclicality of the nitrogen business, which is very sensitive to supply-and-demand imbalances, often resulting
