QAFCO, established in 1969, is mainly involved in the production of urea and ammonia
Industries Qatar has agreed to acquire QP’s 25% interest in QAFCO. (Credit: Gerd Altmann from Pixabay)
Industries Qatar (IQ) has agreed to acquire Qatar Petroleum’s (QP) 25% stake in Qatar Fertiliser Company (QAFCO) for a consideration of $1bn.
The deal will allow IQ to become 100% owner of the world’s largest single-site urea producer, in addition to expanding its presence in a fertiliser business.
The purchase of QP’s interest in QAFCO is in line with IQ’s strategy to establish its presence and create value across the downstream sector. In March this year, QP agreed to acquire Norway-based Yara’s 25% stake in QAFCO.
QAFCO, which was established as a joint venture in 1969, is mainly involved in the production of urea and ammonia. The company was created to expand the economy and use the nation’s immense gas reserve.
QAFCO also produces urea-formaldehyde condensate (UFC-85) and melamine, in addition to ammonia and urea.
QAFCO produces around 3.8 million metric tonnes of ammonia per annum
The company produces around 3.8 million metric tonnes of ammonia per annum, of which 80% is used as a feedstock for urea production and the remaining is exported to Indian-Subcontinent, Asia, North America and South America.
QAFCO produces between 5.7 and 5.8 million metric tonnes of urea per year. It mainly produces prilled and granular urea, which are both solid fertilisers and exported to over 20 countries across the world.
The UFC-85 is an anti-caking agent that is added to urea products to improve its strength. With a design capacity of 60,000Mt per year, the company’s melamine plant is claimed to be the largest one in the Middle East.
At present, QAFCO also has a subsidiary level stake in Gulf Formaldehyde Company (70%) and Qatar Melamine Company (60%).
IQ’s board of directors also approved QAFCO’s acquisition of Qatar Petroleum’s 40% stake in Qatar Melamine Company (QMC), as part of the same deal.