Verde to expand potash output in Brazil to counter supply disruption (updated)

Verde AgriTech

03/03/2022 13:25

(Adds context, CEO quotes)
    By Roberto Samora
    SAO PAULO, March 3 (Reuters) - Verde Agritech PLC  NPK.TO 
has decided to expand its potash production in Brazil as the
global fertilizer supply chain faces a major bottleneck owing to
the Russia-Ukraine conflict and Western sanctions on Belarus, an
important producer.
    The company said its board has approved accelerated
investment so it can boost output capacity and become Brazil's
largest potash producer.
    Verde expects to double capacity of its second production
facility in the state of Minas Gerais, currently under
construction, and reach 3 million tonnes of output capacity in
2022.
   Plant 2 - as the venture is called - is on track to start
production in the third quarter of 2022 with initial capacity of
1.2 million tonnes a year, Verde said, while the expanded
production capacity is expected to be set by early fourth
quarter.
    "Given the latest sanctions applied to Belarus and Russia,
we are acutely aware of the collateral impact on Brazil's
agriculture in the case of a potash supply disruption," Verde
President and Chief Executive Cristiano Veloso said. "We are
equally worried about a global food shortage, which might be
unavoidable if there is a breakdown in fertilizer supply."
    Brazil imports about 85% of its fertilizer consumption,
including potash.
    Brazil Agriculture Minister Tereza Cristina Dias on
Wednesday said the country has fertilizer stocks that should
last until October and would soon launch a national plan to
stimulate investments in potash and phosphorus mines.
 urn:newsml:reuters.com:*:nL1N2V5374
    Verde said its board approved an expenditure of 51 million
reais ($10.04 million) to fund the expansion plan, up from the
22 million reais previously approved for the construction of
Plant 2.
    The company also expects to start building its Plant 3 unit
in 2023, but such a move still requires permits.

($1 = 5.0794 reais)

 (Reporting by Roberto Samora; Writing by Gabriel Araujo;
Editing by David Goodman and Mark Porter)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5644 7745;))