QAFCO, established in 1969, is said to be the world’s largest single-site urea producer
Qatar Petroleum (QP) has agreed to acquire Norway-based Yara’s 25% stake in Qatar Fertiliser Company (QAFCO) for $1bn.
QAFCO has turned into the world’s largest single-site urea producer since the creation of the joint-venture company in 1969.
The remaining 75% stake in QAFCO is owned by Industries Qatar (IQ), which in turn is owned 51% by QP.
QAFCO produces fertiliser products such as ammonia and urea
QAFCO’s fertiliser products include ammonia, urea and Urea Formaldehyde Condensate (UFC-85). The firm uses around 80% of ammonia as a feedstock for urea production, and the remaining quantity is exported to India, Jordan and the US.
The exported ammonia serves as a feedstock for urea and ammonium phosphate production.
QAFCO’s prilled and granular urea, which are both solid fertilisers, are exported to more than 20 countries across the world.
The UFC-85 is an anti-caking agent incorporated into urea products to enhance its strength.
QAFCO operates six advanced plants, which have an annual capacity of 3.8 million MT of ammonia and 5.6 million MT of urea.
The deal is subject to local regulatory approvals and customary closing conditions.
Upon completion of the deal, Yara will assess potential extraordinary dividends and share buy-backs to maintain a mid to long-term net debt/EBITDA range of 1.5-2.0.
Yara president and CEO Svein Tore Holsether said: “We are very proud of our partnership with Qatar Petroleum and Industries Qatar over the past half century, where we have succeeded in delivering a top quartile venture in every respect.”
In January this year, Yara International and IBM have launched a new open collaboration platform for farm and field data to advance sustainable food production.