Russian fertilizer group Uralchem JSC has finalized a deal to buy Brazilian fertilizer blender Adubos Vera Cruz Ltda. The deal was finalized at the end of January, according to Uralchem CEO Dmitry Konyaev in a Feb. 10 interview with Bloomberg.
It is understood that the negotiations have been ongoing for some while.
According to the UK’s Financial Times, the deal was announced publicly on Dec. 28 last year, and may have been done via potash producer Uralkali PAO, which is owned by Uralchem. But it is unclear if Uralchem/Uralkali bought 100% of Adubos Vera Cruz’s shares.
The transaction value has not been disclosed.
A spokesperson for Adubos Vera Cruz confirmed to Bloomberg that the company had been sold, but declined to provide further comment.
Founded in 1941, and located in the city of Ibaté, São Paulo state, Adubos Vera Cruz – until the sale – was a family-owned company, with the Financial Times listing the company’s managing partner since July 1986 as Henrique Duchene, and Eliana Aparecida Tangerino Duchene as a partner since December 2012.
Adubos Vera Cruz does not list its fertilizer blending capacity on its website, but indicates that as of 2018 it had storage capacity of 61,000 mt of fertilizers. Russia historically has been among its product import sources, according to media reports, but this could not be confirmed by Green Markets.
Konyaev told Bloomberg that the acquisition of the Brazilian fertilizer blending company comes as Uralchem seeks out new markets amid concern among European buyers about sanctions. Russian fertilizers are exempt from European Union and US sanctions targeting the Vladimir Putin regime, but many buyers are wary of buying Russian product.
The Uralchem CEO told Bloomberg that the company lost sales in Europe and of course needs to place its volumes, and wants to have a stronger presence in a major agricultural fertilizer market, such as Brazil.
Konyaev expects to move up to half-a-million mt through Adubos Vera Cruz, selling its own volumes through the blending company instead of the company buying from different sources.
Uralchem has had plans to expand its presence in Brazil for a long time, dating back well before Russia’s invasion of Ukraine in February last year.
Uralchem and Uralkali in 2019 pursued a deal to buy a controlling stake in Brazilian fertilizer company Fertilizantes Heringer SA in Viana, Espirito Santo state.
But their plans bit the dust after protracted negotiations between the Russian companies and Heringer’s controlling shareholder, Heringer Participações Ltda., fell apart (GM Jan. 10, 2020). Brazil’s antitrust regulator Cade’s superintendence had approved the deal without restrictions (GM Jan. 3, 2020).
A Uralchem spokesperson, in response to Green Markets’ inquiries about the Adubos Vera Cruz acquisition, said that Uralchem was not ready to disclose further information on the acquisition at this time. GM’s inquiries included information about Adubos Vera Cruz’s current blending capacity and any plans Uralchem had for expansion of that capacity.