Wednesday 28 October 2020

Adnoc, Dutch group set up $1.7bn chemical company

ABU DHABI, September 30, 2019

Abu Dhabi National Oil Company (Adnoc) has signed an agreement with OCI NV, a leading chemical company headquartered in Netherland to combine its fertiliser business into the latter's nitrogen fertiliser platform in the Middle East and North Africa (Mena) region, thus creating a world-leading joint venture.

The new company, Fertiglobe, which will be based in the international financial centre Abu Dhabi Global Market, has over $1.7 billion of annual revenues based on 2018 pro forma figures. OCI will fully consolidate the combined business.

Once completed, Fertiglobe will be the largest export-focused nitrogen fertiliser platform globally, and the largest producer in the region with a production capacity of five million tonnes of urea and 1.5 million tonnes of merchant ammonia.

Combining their Mena crop-nutrient businesses, the new company will emerge as a major player in the region posing a challenge to the US and Russian exporters.

It is underpinned by a young asset base and a robust storage and distribution infrastructure with access to key ports on the Mediterranean, Red Sea and Arabian Gulf, said a statement from Adnoc.

Fertiglobe’s complementary production and distribution locations bring geographic diversity and enhanced market access, benefitting both existing and new customers.

Following the close of the transaction, Fertiglobe will focus on the integration of the two businesses, which is expected to create significant value through the unlocking of commercial and technical synergies, it added.

On the new venture, Dr Sultan bin Ahmad Sultan Al Jaber, Minister of State, Adnoc Group CEO, and also Chairman of Fertiglobe, said: "The efficiency we have shown in completing this milestone transaction so quickly is a strong indication of the way that Fertiglobe will operate in the future and a hallmark of what we hope to achieve by combining Adnoc’s fertiliser platform and OCI’s Mena-based fertiliser assets."

"We have laid careful groundwork to extract and promote synergies throughout our strategically placed production assets and distribution network," stated Al Jaber.

"Working alongside our partner OCI, we look forward to significantly growing our newly combined fertiliser businesses, accessing new markets and bringing significant benefits to all our customers," he noted.

"The close of this transaction is yet another example of the further progress that Adnoc is making in delivering on its 2030 strategy and specifically its ambitions to expand its Downstream portfolio," he added.

Nassef Sawiris, the chief executive of OCI and also the new JV Fertiglobe, said:: "I am very pleased that we have completed this landmark transaction in such a short time frame, which brings together two like-minded partners."

"It underscores our commitment to create value in the fertiliser industry, at the same time helping develop a more efficient market place for our customers. This platform has a solid financial profile and has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders," he noted.

This transaction will place the companies EBIC, EFC, Sorfert, and Fertil (formerly Adnoc Fertilisers) under the ownership of the new joint venture Fertiglobe, he added.-TradeArabia News Service


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