Agrium Inc. will immediately begin construction on the expansion of its patented-process controlled release nitrogen fertilizer product line. Agrium will invest approximately $40-million to expand its capability to convert traditional nitrogen fertilizer into controlled release products. The expansion will increase annual coating capacity for ESN(R) from 30,000 to 150,000 tonnes and Duration CR(R) from 10,000 to 40,000 tonnes with completion expected in January 2006.

"This project represents a critical step as we move towards our goal of world scale production and marketing of ESN(R)", said Mike Wilson, Agrium's President and CEO. "Demand for ESN(R) has been exceptional and has prompted us to accelerate our expansion plans. With ESN(R), we are pioneering the introduction of a high-value branded fertilizer product into commodity agriculture markets, creating value for customers and shareholders alike."

ESN(R), or Smart Nitrogen, has a unique semi-permeable polymer coating that allows water to enter the urea granule and dissolve the nitrogen. The nitrogen release rate is controlled by soil temperature, which similarly determines plant growth and nutrient demand. Prior to ESN(R), the use of controlled release products was restricted to golf courses and specialty crops. ESN(R)'s proven technology delivers a solid return for growers by improving nitrogen use efficiency, increasing yields, and reducing application costs. ESN(R) provides these benefits while also providing significant environmental benefits over traditional nitrogen products.

Research results demonstrate the ESN(R) resulted in increased corn yields averaging 12 to 15 bushels per acre over conventional UAN (liquid nitrogen fertilizer) application, delivering superior value to growers, and as a result, commands a premium price over traditional nitrogen fertilizers.

Duration CR(R) is a controlled release nitrogen fertilizer specifically for specialty applications such as turf, fruits and vegetables. This expansion will also allow us to meet the growing demand for this high value product.

Source: Company Release