Yara pays US$425mn for Latin America fertilizer company

Norway-based fertilizer firm Yara International said it has agreed to acquire a number of fertilizer assets in Latin America from Omimex Resources for US$425mn, increasing its share of the region's fast growing agricultural markets.

 

The main companies included in the transaction are Abocol (Colombia), Misti (Peru), Omagro (Mexico), Fertitec (Panama and Costa Rica), Cafesa (Costa Rica) and Norsa (Bolivia).

 

Yara said the acquisition of Omimex's fertilizer business, OFD, strengthens Yara's downstream footprint and growth platform in Latin America, and is highly complementary to its recent acquisition of Bunge's fertilizer business in Brazil.

 

"I am excited to announce this agreement, which re-confirms Yara's long-term commitment to Latin America. OFD fits well with Yara, and will further improve our downstream positioning within the fast-growing cash-crop markets in the region," Jørgen Ole Haslestad, president and CEO of Yara, said in a statement.

 

"This deal marks a further step for our global growth ambition, adding almost half a million tons of upstream fertilizer capacity."

 

The assets to be acquired by Yara include a fertilizer production facility in Cartagena with an annual capacity of approximately 320,000t of compound NPK, 100,000t of calcium nitrate and 70,000t ammonium nitrate, with integrated ammonia production.

 

In addition, OFD has a production capacity of 25,000t single super phosphate (SSP) per annum through Fosfatos de Boyaca in Colombia. Finally, OFD controls approximately 700,000t of NPK blending capacity across 12 sites and 100,000t liquid fertilizer capacity as part of its fertilizer distribution network across Colombia, Mexico, Peru, Bolivia, Costa Rica and Panama.

 

In 2012 OFD sold 1.13Mt of fertilizer, generating net revenues of US$796mn.

 

Yara said it was also in the market for more upstream acquisitions in Brazil, in the nitrogen and phosphate sectors, or investing in new capacity in the country. Last year, Yara paid US$750mn for Bunge's fertilizer assets in Brazil, one of the world's largest agricultural producers and exporters.