Yara Concerned About Battle Near Libyan Factory

Norwegian fertilizer producer Yara International ASA (YAR.OS) Wednesday said Libyan rebels and pro-Muammar Gadhafi forces have been battling near its factory on the Mediterranean coast at Marsa El Brega, but that there are no reports of damage to the property so far.

Yara, which has a 50% stake in the Libyan Norwegian Fertiliser Co., or Lifeco, a joint venture with the National Oil Corp. of Libya and the Libyan Investment Authority, halted production at the Lifeco factory in February and evacuated all European employees and surplus ammonium.

"We are of course very concerned about the situation," Asle Skredderberget, vice president of corporate communications at Yara, told Dow Jones Newswires.

He said there have been no reports of fighting taking place inside the factory or damage to the building, which is closed.

Skredderberget confirmed reports that pro-Gadhafi forces have lost control to the rebels of the petrochemical industrial area, where the Lifeco factory is situated in eastern Libya.

Yara set up the joint venture in 2009 to export urea and ammonium. The plant has an annual capacity of 900,000 tons of urea and 700,000 tons of ammonia. Lifeco represented 188 million kroner ($33.7 million), or 3%, of Yara's operating profit in 2010.

Shares in Yara have fallen 17% since the political unrest in the North African nation escalated on Feb. 15. At around 0917 GMT, shares were down 0.8% at NOK277, underperforming a 0.4% drop in the broader Oslo index.

-By Christina Zander, Dow Jones Newswires; [phone]; [e-mail]