Abu Dhabi's Fertiglobe to acquire Wengfu Australia's distribution business
Abu Dhabi-based Fertiglobe has signed an asset sale and purchase agreement to acquire the distribution assets of Wengfu Australia, a leading fertiliser distribution business.
Wengfu operates in South-East Australia from five ports with eight warehouses, distributing 700-800kt of fertilisers annually to over 200 customers. It has the capacity to scale up to 1.1 million tons per annum, making it a leading supplier in one of the world's fastest-growing agricultural markets.
Boosting Fertiglobe's market presence
The purchase price will be determined on the basis of net asset value, consisting of fully recoverable net working capital and liquid inventory, plus a premium of approximately US$8 million. The transaction is expected to be accretive to earnings per share.
Fertiglobe currently supplies nearly 600kt of urea annually to Australia, with the potential to significantly grow supply volumes through the Wengfu platform to meet demand.
The acquisition aligns with Fertiglobe's strategy to expand its presence in key strategic sectors, diversify its global footprint, and build resilience against seasonality. It provides access to a broader customer base, unlocks supply chain efficiencies, and supports the introduction of enhanced-efficiency and sustainable fertilisers. Fertiglobe will also be able to widen its distributed product portfolio to non-nitrogen fertilisers and expand fertiliser sourcing flexibility to supply the wider Asia-Pacific region.
Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe, commented: 'Acquiring Wengfu's assets marks a strategic step in our value-driven growth strategy and accelerates our commercial footprint in Australia – one of the world's fastest-growing agricultural regions.
'It also provides us with a strong distribution platform across the Asia-Pacific region, strengthens access to our customers, 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 acquisition will be financed through pre-arranged trade facilities, with no impact on Fertiglobe's dividend distribution capability and minimal impact on leverage.
Fertiglobe is the world's largest seaborne exporter of urea and net ammonia combined, the largest nitrogen fertiliser producer in the Middle East and North Africa region, and ADNOC's low-carbon ammonia platform. Its production capacity comprises of 6.6 million tons of urea and merchant ammonia, produced at four subsidiaries in the UAE, Egypt and Algeria.
Wengfu Australia is part of China's Guizhou Phosphate & Chemical Group (GPC), which was created in 2019 through a merger of Wengfu Group and Guizhou Kailin Fertilizer Group to create the world's third-largest manufacturer of phosphate fertiliser and phosphate chemical products.
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