The ratings on Norway-based Yara International ASA reflect its position as the world's largest distributor of fertilizers, with a strong marketing network, and as a leading producer of nitrogen fertilizer. The ratings further reflect the company's operational flexibility with respect to sourcing and production capacity. Yara's production is geographically well diversified: The company runs large-scale plants in Europe and Canada. In addition, it sources low-cost gas supplies through joint-venture operations in Trinidad, Qatar, Australia, and Russia. In its strategy to continue to source from low-cost gas regions, Yara recently entered into a joint venture in Libya. The ratings are constrained, however, by the high cyclicality of the nitrogen business--which is very sensitive to supply-and-demand imbalances--exposure to volatile and rising energy
