Yara International has boosted the "credibility" of its much-vaunted pledge to ramp up fertilizer output through a tie-up with Moroccan phosphate giant OCP, Credit Suisse analysts said.

Norway-based Yara had enhanced its "long-term competitiveness and growth prospects" through closer ties with OCP, the world's biggest supplier of phosphate rock, the bank said.

Indeed, Yara had, by entering a Brazilian joint venture with OCP and securing a deal over supplies of phosphate rock to European plants, made steps towards realising a target issued last week to hike fertilizer output by 40% to 28m tonnes between 2010 and 2016.

"[The] statement adds credibility to the company's growth target and should be positive for the share," Credit Suisse said, restating an "outperform" rating on Yara stock, with a price target of NOK365.

The shares closed 1.4% lower at NOK221.00 in Oslo on weak day for world shares.

Closer ties

Yara late on Tuesday said it had agreed "key terms" in the sale to OCP of a 50% stake in a Brazilian port and fertilizer production operation, which the groups "plan to develop through investments in the short-to-medium term".

The deal will see OCP provide the key raw material of phosphate rock to the plant, which has annual production capacity of 650,000 tonnes of refined "single super phosphate", a product blended into fertilizers as used on-farm.

"In parallel, the two companies will enter into a long-term sourcing agreement for phosphate rock to Yara's European NPK plants," said Yara, the world's biggest producers of nitrogen fertilizers.

Jorgen Ole Haslestad, the Yara chief executive, said that "both of these initiatives strengthen our competitive advantage".

'Significant opportunities'

Yara last week, at the investor day at which its unveiled its production growth target, highlighted its focus on "growth opportunities across all regions", but in particular in emerging markets.

It termed Latin America "a high-growth agricultural region where Yara can leverage an already-significant presence, and where market opportunities for value-added fertilizer are significant".

State-run OCP, meanwhile, is attempting to expand into processing, rather than just supplying, rock, to move further up the phosphate value chain.

PotashCorp, the Canadian fertilizer giant, has forecast that OCP's exports of unprocessed phosphate rock will drop by more than 10% by 2015.