Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, has signed an initial agreement with AD Ports Group to explore storage and shipping opportunities at ports in Egypt and the UAE.
Fertiglobe will look to leverage AD Ports' cargo handling and storage infrastructure to strengthen its urea and ammonia storage and shipping capabilities, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
“We will identify compelling opportunities across our logistics and supply chain, management requirements, enabling us to bolster our ability to store and ship urea and ammonia from Egypt and further optimise our logistics’ cost structure,” said Ahmed El-Hoshy, chief executive of Fertiglobe.
“Today, our strategically located production facilities benefit from direct access to international ports and distribution hubs, allowing us to easily access major end-markets and regions with high demand,” he said.
Fertiglobe, a joint venture between Adnoc and the Netherlands-listed OCI, raised about $795 million from its initial public offering in 2021, amid strong demand from international, regional and local investors.
The company’s output includes 6.7 million tonnes of urea and ammonia produced each year at four units in the UAE, Egypt and Algeria, making it the largest producer of nitrogen fertilisers in the Mena region.
On Monday, Fertiglobe said it aimed to capitalise on AD Ports’ supply chain capabilities to further lower costs related to logistics, with the company aiming for $50 million in recurring annualised cost savings by the end of 2024.
“We anticipate that this will become a remarkable step towards a greener, more efficient future. As two home-grown champions, AD Ports Group and Fertiglobe are embarking on this strategic collaboration that holds immense potential,” said Captain Mohamed Al Shamisi, managing director and group chief executive of AD Ports.
Fertiglobe and AD Ports will also explore “potential collaboration opportunities” in other locations as well as the development of supply chain solutions for green ammonia, a hydrogen carrier.
Fertiglobe expects a slump in nitrogen prices that dragged its first-half profit lower to reverse course this year.
Net profit attributable to owners of the company for the six months to the end of June fell to $214.9 million from $786 million in the year-ago period. First-half revenue fell to $1.25 billion from $2.66 billion a year earlier.
Established in 2006, AD Ports, which owns and operates 10 ports in the UAE, has been expanding its operations globally.
In recent quarters, the group has acquired several assets and signed port management concession agreements across multiple markets in a bid to expand its global reach.
In July, AD Ports acquired Spanish integrated logistics platform Noatum after receiving final approval for the deal from the Spanish authorities.
Noatum, with an enterprise value of Dh2.5 billion ($680 million), has a presence in 26 global markets.