ADNOC's Fertiglobe to buy Australia-based fertilizer distribution assets

Dubai: The ADNOC entity Fertiglobe is buying the distribution assets of Wengfu Australia Pty Ltd., a fairly big-sized name in the fertilizer distribution business. The deal firms up Fertiglobe's reach in key overseas markets.

Wengfu operates in South-East Australia from five ports with eight warehouses, and distributing between 700 kilo-tonnes to 800 kilo-tonnes of fertilizers annually to over 200 customers. It has the capacity to scale up to 1.1 million tons per annum.

This makes Wengfu a 'leading supplier in one of the world’s fastest-growing agricultural markets', according to a statement.

The purchase price will be 'based on the net asset value, consisting of fully recoverable net working capital and liquid inventory, plus a premium of about $8 million', the statement added.

"This acquisition aligns with Fertiglobe’s strategy to expand its presence in key strategic sectors, diversify its global footprint, and build resilience against seasonality," the ADNOC entity said.

"This acquisition also enables Fertiglobe to widen its distributed product portfolio to non-nitrogen fertilizers and allows it to expand fertilizer sourcing flexibility to supply the wider Asia-Pacific region."

The buy 'accelerates our commercial footprint in Australia - one of the world’s fastest-growing agricultural regions', said Ahmed El-Hoshy, CEO of Fertiglobe.

"It also provides us with a strong distribution platform across the Asia-Pacific region and enhances our ability to competitively source and deliver our products and services.

"Having known Wengfu’s team for several years, we have strong confidence in their ability to grow the business from here. The transaction is in line with our ambitions to expand our presence in key markets and reinforces our leadership position in the global nitrogen industry.”