NEW YORK ( TheStreet) -- Agrium (AGU - Get Report) raised its dividend significantly and increased its brownfield potash capacity by 1 million tonnes at a Saskatchewan plant, which will raise its production about 50%.
The plant produced a little more than 2 million tonnes in 2010. The expansion is expected to cost $1,500 a tonne and be completed in the second half of 2014. Potash sales made up $646 million of Agrium's $10.5 billion in net sales in 2010.
Rival Potash Corp. of Saskatchewan (POT - Get Report) had operational capacity in 2010 of 11.2 million tonnes, which it hopes to increase to 17.1 million tonnes by 2015. The second phase of construction at Potash Corp.'s Cory facility in Saskatoon, Canada, is expected to be completed by the end of 2012 and its operational capacity is anticipated to increase 1.2 million tonnes to 2.7 million tonnes. Most of Potash's $2 billion capital spending budget in 2010 was spent on potash expansion projects.
Agrium almost quadrupled its dividend to 22.5 cents a share on a semi-annual basis, up from 5.5 cents."The increase in our dividend is a result of the continued growth in stable earnings from our Retail business and the strength in our Wholesale earnings profile and outlook," President and CEO Mike Wilson said in a statement Wednesday. Agrium shares fell 1.7% to $64.06 in trading Wednesday. -- Written by Alexandra Zendrian
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