Kenai helps the world grow: Nitrogen fertilizer plant is among the world's top producers.

• Author: Campbell, Melissa
• Position: Company Profile - Statistical Data Included

A lot of fertilizer comes out of the Kenai, and it's not just from tall fishing tales. Agrium U.S. Inc.'s Kenai Nitrogen Operations plants produce enough material annually to fertilize a strip of farmland 16 miles wide stretching from Los Angeles to New York.

And they'd like to expand.

As the world's population grows, so does its need for food. Problem is, the world is turning a lot of good farmland into housing and business complexes. To offset the narrowing acreage, farmers must produce a better crop. That's where fertilizer comes in.

Agrium, headquartered in Calgary, Canada, is among the world's top leaders in producing and marketing fertilizer, and is the world's second largest nitrogen producer.

"In our business, the demand side is a given," said John Van Brunt, Agrium's president and CEO. "People need to eat; they need more meat and more grain."

Agrium produces about 11 million tons of fertilizer a year, more than 8 million tons of which is nitrogen. The company also produces potash and phosphate fertilizers.

The world used about 154 million tons of fertilizer in 1999, according to the International Fertilizer Industry Association. About 94 million tons of that consumption was in nitrogen-based fertilizers. And that is the Kenai plants' specialty.

The Kenai operation produces a total of about 2 million tons of these nitrogen-based fertilizers a year, according to Agrium. Kenai's main products are anhydrous ammonia and urea. Urea is a solid fertilizer made by reacting carbon dioxide and ammonia under pressure. Anhydrous ammonia, a liquid, is made by combining nitrogen gasses from the atmosphere with hydrogen from natural gas and water. Agrium will continue to buy natural gas from Unocal, which is still in the Alaska oil and gas market.

Most of Kenai's products are exported to Pacific Rim nations, such as Korea, Thailand and China. In 2000, more than $154 million worth of Kenai-made products were sold to overseas markets, according to Agrium. And the potential to expand exports to China has grown since that country joined the World Trade Organization this year.

The fertilizer business is not new to the Kenai area, nor is it new to Agrium. Both have been in business for decades. New faces have just been added.

AGRIUM HISTORY

Agrium began operations as a subsidiary of Cominco Ltd., known to Alaskans as the operator of the Red Dog Mine in Kotzebue.

In 1931, the mining company installed equipment in a British Columbia facility to turn...