President's Message

Since our last report we have significantly increased our size and global reach. We have also enhanced
our sustainability efforts and improved performance in a number of areas.

Integral to our process is our recent development of a sustainability vision to help guide our employees'
actions and to communicate with stakeholders:

Agrium will make an increasingly positive impact on stakeholders while helping to feed the
world responsibly.

To achieve our vision we must constantly look for ways to increase positive impacts, while decreasing
negative impacts on stakeholders. By continually optimizing this equation we create more value for our
stakeholders and support efforts to nourish the world and protect the environment. In the past two years, we have increased our ability to supply nutrients and other crop production products to growers. We also have increased our capacity to develop and market controlled-release products that not only protect the environment but increase grower profitability. We are well positioned to help meet the global challenge of producing more food in a sustainable manner.

Our vision is focused on creating value with our stakeholders. We have organized this report to discuss how we are working to optimize our positive impact on communities, employees, customers, owners, society and the environment. We believe this report provides a balanced view of stakeholder impacts and what we are doing to continually improve our performance.

You will read about the opportunities and challenges we encounter as we strive for sustainability.

• Managing our growth and change responsibly in a global context.
• Recruiting and retaining the right people in a changing demographic.
• Reducing our greenhouse gas emissions in a changing climate.
• Ensuring product stewardship throughout the lifecycle.

This report communicates our sustainability achievements and disappointments. Some of the highlights from the past two years follow.

• Through our effort to create a safe culture at Agrium, we have been able to reduce employee injury rates to their lowest ever, and by 50 percent in the past eight years. More than 70 percent of our approximately 500 operating locations did not have a single recordable injury in 2007.
• As a result of our acquisitions we have further diversified across the value chain, improving our reliability to customers, communities and shareholders. We now reach more growers more efficiently.
• With a production expansion and the purchase of Nu-Gro and Pursell Technologies Inc., we have become the world's largest supplier of controlled release fertilizers that reduce environmental impacts and create value for our customers.
• We have taken strides to develop comprehensive strategies that build on earlier nutrient best management practices.
• We're proud of our continually high annual governance ratings by independent bodies.

However, we did experience some disappointments and have identified areas for improvement.

• Despite our improvements in safety, serious injuries do occur at Agrium. Regretfully, we experienced an employee fatality and a serious injury of an employee in 2006.
• We continue to look for opportunities to reduce costs and environmental impacts through gasification of lower value hydrocarbons such as asphaltenes and petroleum coke. Despite our best efforts to obtain a secure natural gas supply for our Kenai, Alaska nitrogen facility, we could not resolve the issue and had no option but to close the facility (see Kenai closure). For Kenai, we had investigated the possibility of gasifying coal and capturing the carbondioxide emissions.
• Our energy intensity-the amount of energy used per tonne of production-has increased 12 percent since 2005.
• We have not been able to keep pace with our overall company growth in employee development and learning. We plan to invest additional resources in this area in the coming years.
• We incurred a large fine at one of our newly acquired facilities (see fines and penalties).

Our business is to provide nutrients, products and services to growers. Our vision is to do so in a positive and responsible manner. We undertake actions that protect, sustain and improve humanity and the environment, today and in the future. By working collaboratively with growers, communities, employees, regulatory agencies, industry associations and others, we can enhance the well-being of people, the environment and the economy. I want to take this opportunity to thank those who collaborate with us to help feed the world responsibly.

Mike Wilson
President and Chief Executive Officer
Agrium Inc.

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