OCI and ADNOC merge fertilizer operations

21st June 2019

OCI and ADNOC merge fertilizer operations

The joint venture between Dutch fertilizer and industrial chemical group OCI and Abu Dhabi National Oil Company (ADNOC) will create the world’s largest export-focused nitrogen fertilizer platform as well as the biggest producer, with output of 5 million t/a of urea and 1.5 million t/a of ammonia, of the Middle East and North Africa (MENA). OCI will own 58% and ADNOC 42% in the combined entity, which will be based in Abu Dhabi, United Arab Emirates (UAE), and have annual revenues of $1.74 billion, based on 2018 pro forma figures.

The transaction is expected to close in the third quarter of 2019, subject to the usual legal and regulatory conditions.

OCI’s MENA facilities can produce up to 3.2 million t/a of gross ammonia and 2.9 million t/a of urea. The company’s assets include Egypt Fertilizer Company, a 60% stake in Egypt Basic Industries, a 51% share in Algeria’s Sofert plus a global trading platform based in the UAE.

ADNOC Fertilizers operates two plants in Ruwais – Fertil-1 and Fertil-2 – which have a combined capacity of 1.2 million t/a of ammonia and 2.1 million t/a of urea. The group sells granulated urea to markets in the Indian subcontinent, the US, Latin America and Australia. ADNOC is currently the sole shareholder in ADNOC Fertilizers, having bought Total’s 33% stake late last year.

The companies said the partnership will strengthen their market share and better serve customers, supported by a storage and distribution infrastructure that has access to key ports on the Mediterranean, Red Sea and Arabian Gulf.

ADNOC Fertilizers added that it has also signed a new long-term supply agreement with ADNOC for gas feedstock for its operations at Ruwais.

OCI’s CEO Nassef Sawiris said the partnership creates a “first-of-its-kind export platform with best-in-class cash conversion metrics” and “significant potential for future growth and value creation”.

Sultan Ahmed Al Jaber, ADNOC’s CEO and UAE Minister of State, commented: “Pooling our assets and capabilities is a value-enhancing step for both companies, allowing us to leapfrog competitors to become the top nitrogen export platform globally. It will also enable us to access new markets, benefiting both existing and new customers.”

Al Jaber will be chairman of the joint venture’s board, while Sawiris will be CEO. The board will comprise six members nominated by OCI and four nominated by ADNOC.

Photo: © Singkham/Shutterstock
Dutch fertilizer and industrial chemicals group OCI and Abu Dhabi National Oil Company (ADNOC) are to partner their fertilizer operations in the Middle East and North Africa (MENA).

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