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Eric Balsley Russ Dunlap Dave Jaggard Brad Patt Jordana Weiss

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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Eric Balsley Russ Dunlap Dave Jaggard Brad Patt Jordana Weiss

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  1. Agrium Corporation Fertilizer Production in Brazil Eric Balsley Russ Dunlap Dave Jaggard Brad Patt Jordana Weiss

  2. 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

  3. Financial Considerations • MACRO-ECONOMIC CONDITIONS Inevitable demand & profit impact

  4. Political Considerations • Federal Republic, robust checks & balances (1988- ) • Respected world citizen, WTO & IMF member • Socialist/populist leanings

  5. 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

  6. Q & A

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