At work in the Panorama Digital Command Centre. Bloomberg
At work in the Panorama Digital Command Centre. Bloomberg
At work in the Panorama Digital Command Centre. Bloomberg
At work in the Panorama Digital Command Centre. Bloomberg

Adnoc and Sawiris' OCI create world's largest fertiliser exporter


Jennifer Gnana
  • English
  • Arabic

The Abu Dhabi National Oil Company agreed to form a fertiliser joint venture with Dutch entity OCI as part of an ongoing strategy to expand its downstream assets.

The Abu Dhabi company will combine Adnoc Fertilisers with OCI’s regional nitrogen-based fertiliser platform, to create one of the largest exporters of the product globally. OCI has fertiliser production operations in Egypt and Algeria.

Adnoc will hold a 42 per cent stake in the combined entity, with OCI, which is owned by Egyptian billionaire Nassef Sawiris, taking the majority stake. Combined annual revenues of the entity, which will be registered at the Abu Dhabi Global Market, will be $1.74 billion (Dh6.39bn).

The joint venture will be the largest nitrogen-based fertiliser company in the Middle East and North Africa, with a production capacity of 5 million tonnes of urea and 1.5 million tonnes of sellable ammonia. The bulk of this output is for export purposes, with little sold into local markets. It will be the largest exporter of these products in the world at 6.5 million tonnes per annum and will account for 10 per cent of global seaborne exports for ammonia and urea, based on figures from 2018, OCI noted in an investor presentation. Adnoc’s fertiliser subsidiary also signed a new long-term gas agreement with the state oil company to procure new feedstock for its operations, based on a competitive pricing formula, the company said without specifying volumes.

The merger of fertiliser assets will enable Adnoc to "access new markets, benefitting both existing and new customers”, said Dr Sultan Al Jaber, Adnoc Group chief executive and UAE Minister of State. Dr Al Jaber will be the chairman of the new entity. Currently Adnoc sells fertiliser products to customers in India, the US, Latin America and Australia.

"Pooling our assets and capabilities is a value enhancing step for both companies, allowing us to leapfrog competitors to become the top nitrogen export platform globally,” he said. The new company will have a centralised commercial team and storage and distribution infrastructure with access to key ports in the Mediterranean, Red Sea and Arabian Gulf.

"This unique business combination is in line with Adnoc's approach to value-added partnerships and will improve the profitability and cash flow of our fertiliser portfolio,” he added.

Adnoc said the business will be well positioned to pay its shareholders "attractive dividends". It will also pursue potential acquisitions.

Mr Sawiris, who will be the venture's chief executive, said it has "significant potential for future growth and value creation".

UAE Minister of State and Adnoc chief executive Dr Sultan Al Jaber with Nassef Sawiris, OCI chief executive, in Abu Dhabi on Monday. Photo courtesy of Adnoc
UAE Minister of State and Adnoc chief executive Dr Sultan Al Jaber with Nassef Sawiris, OCI chief executive, in Abu Dhabi on Monday. Photo courtesy of Adnoc

The move comes amid a pivot to build a stronger product portfolio among Middle East national oil companies. Adnoc announced last year it would invest Dh165bn alongside partners in downstream, which refers to the refining and chemicals segments of the energy value chain. The company has also been undergoing a transformation since Dr Al Jaber became chief executive in early 2016, which has allowed Adnoc to pursue more revenue-generating deals and opportunities.

"There haven’t been that many deals on the nitrogen side in the last two or three years, so this would be a fairly large transaction because of the nitrogen element of it," said Arvind Aggarwal, principal Emea at consultancy Nexant.

Adnoc and OCI, which also has a large phosphate base, could leverage their mutual capabilities in the fertilisers business, he added.

"The national oil companies have sulphur in their refineries, and a lot of phosphate companies require sulphur in their business," said Mr Aggarwal. "Having this partnership allows for internal integration."

Adnoc Fertilisers operates two plants in Ruwais – in Abu Dhabi's Al Dhafra Western region – which is set to become a global petrochemicals hub as part of the company's downstream push.

Last year, Adnoc bought a 33 per cent stake in the fertilisers unit owned by France's Total, as it prepared to expand its capabilities in the sector.

Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

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Power: 503hp at 6,000rpm

Torque: 685Nm at 2,000rpm

Transmission: 8-speed auto

Price: from Dh850,000

On sale: now

PROFILE OF INVYGO

Started: 2018

Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

Size: 9 employees

Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri

Six large-scale objects on show
  • Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
  • The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
  • A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
  • Frank Lloyd Wright’s 1930s Kaufmann Office
  • A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
  • Torrijos Palace dome
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The biog

Name: Marie Byrne

Nationality: Irish

Favourite film: The Shawshank Redemption

Book: Seagull by Jonathan Livingston

Life lesson: A person is not old until regret takes the place of their dreams

PAKISTAN SQUAD

Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah. 

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Engine: six-litre W12 twin-turbo

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Power: 626bhp

Torque: 900Nm

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On sale: Q1 2020

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Dates for the diary

To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:

  • September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
  • October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
  • October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
  • November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
  • December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
  • February 2, 2018 Bodytree will host its 4th annual yoga market.
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MATCH INFO

Manchester City 3
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Brighton & Hove Albion 1
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The Bloomberg Billionaire Index in full

1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion

UAE'S%20YOUNG%20GUNS
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Lily Allen

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Directed by: Craig Gillespie

Starring: Emma Stone, Emma Thompson, Joel Fry

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Name: Carzaty

Founders: Marwan Chaar and Hassan Jaffar

Launched: 2017

Employees: 22

Based: Dubai and Muscat

Sector: Automobile retail

Funding to date: $5.5 million

Company%20Profile
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Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

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