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What Is Mosaic’s International Distribution Segment?

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Mar. 29 2016, Published 1:16 p.m. ET

International distribution

The International Distribution segment provides Mosaic (MOS) with access to markets outside of North America. In 2015, this segment generated $2.4 billion (excluding intersegment sales), or 28% of net sales and 8.3% of gross profits, for the company.

What Is Mosaic's International Distribution Segment?

The South America and Asia-Pacific regions make up the international markets under this segment. Mosaic produces and distributes all three NPK (nitrogen, phosphate, and potassium) fertilizers along with related services to farmers, retailers, cooperatives, and wholesalers in this region.

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Segment operations

Each region has different fertilizer requirements based on soil composition and weather. The International Distribution segment purchases NPK fertilizers from its own segments (intersegment sales) as well as third parties. It then blends these fertilizers, offering a tailored solution to customers in their respective regions.

The company has sales offices, warehouses, blending and bagging infrastructure, and port terminals in its international markets. The three key international markets for Mosaic are India, China, and Brazil, which are also key to companies such as PotashCorp (POT), Agrium (AGU), and Israel Chemicals (ICL). Some of these companies are held by the VanEck Vectors Agribusiness ETF (MOO), which invests about 32% of its portfolio in chemicals.

ADM acquisition

The International Distribution segment also includes the Archer Daniels Midland Company (ADM) acquisition in Brazil, which helped Mosaic to drive additional sales of about 1.5 million tons in the region in 2015.

Like the Phosphates and Potash segments, the International Distribution segment is also impacted by price and shipments. In recent years, prices have had a more pronounced impact on the company’s sales.

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