Australian agribusiness group Elders Ltd. sees the potential for a national fertilizer business to emerge from the possible sale of Incitec Pivot Ltd.’s (IPL) fertilizer assets, Bloomberg reported, citing Elders Managing Director and CEO Mark Allison.
IPL announced on Sept. 2 that it is starting a strategic review of its Fertilisers Asia Pacific business segment (Incitec Pivot Fertilisers), and would evaluate various options, including a potential sale or de-merger, or retaining the business and continuing to invest for growth (GM Sept. 6, p. 1).
Allison said Elders was interested in IPL’s fertilizer blending facilities if they were included in the sale, as they would fill a gap in the agribusiness group’s ability to service tropical horticulture and sugar-cane growers on Australia’s East Coast, according to Bloomberg. Elders is said to have discussed buying IPL’s fertilizer blending assets around 18 months ago.
However, Allison emphasized that Elders was not interested in IPL’s Gibson Island, Queensland, nitrogen manufacturing facilities, or its Duchess phosphate mine and ammonia and DAP/MAP manufacturing facilities at Phosphate Hill in Western Queensland.
The Elders CEO believes that Wesfarmers’ fertilizer arm, CSBP Ltd., the dominant Western Australian fertilizer business, could be a potential new owner of IPL’s fertilizers assets, should they be offered for sale. IPL’s fertilizer business has long been seen as an ideal fit for Perth-based Wesfarmers’ CSBP, according to analysts (GM Sept. 6, p. 1).
Bloomberg reported Allison as saying that CSBP – where he was first Deputy Managing Director and then Managing Director in the early 2000s, as well as being General Manager of Fertilizer at Incitec in the mid-1990s – has always been interested in geographical expansion at the right price.
Wesfarmers has not commented publicly on whether it has interest in IPL’s fertilizer assets.
Allison also sees interest coming from Nutrien Ltd., Saskatoon, and from Yara International ASA, Oslo. Nutrien, which operates in Australia through its wholly-owned subsidiary, Landmark, is currently further strengthening its presence in the country by the expected formal completion at the end of this month of its US$469 million takeover of rural services company Ruralco Holdings Ltd. (GM March 1, p. 1; Aug. 23, p. 1).
Incitec Pivot Fertilisers is Australia’s largest distributor of fertilizers by volume, supplying 2.2 million mt of fertilizers to the domestic market in 2018. It is the country’s sole manufacturer of phosphate fertilizers, and the only producer of nitrogen fertilizers on Australia’s East Coast.