Yara eyes Petrobras-owned fertilizer plants

According to sources familiar with the situation, the recent attempts to sell two Petrobras fertilizer plants are drawing the attention of corporations such as European agricultural fertilizers powerhouse Yara International.

Once an important player in the fertilizer sector, the state-owned company chose to exit the market in 2018, but the divestment process proved challenging.

Now, there is renewed interest after the war in Ukraine disrupted supplies and pushed prices to all-time highs.

The list of potential stakeholders in Petrobras’ assets includes CSN and Russian fertilizer maker EuroChem, said sources who asked not to be identified.

Petrobras wants to divest non-core assets to focus on the so-called pre-salt offshore region, which holds its most significant and profitable hydrocarbon discoveries.

The oil company has been in talks with Yara for more than a year about the sale of Araucaria Nitrogenados, a plant known as ANSA in Paraná state, commented the sources.

However, Petrobras’ board unanimously rejected an offer from the Oslo-based company last week.

With a daily production capacity of 1,975 metric tonnes of urea and 1,303 tonnes of ammonia, ANSA was deactivated in early 2020 after a series of losses since its acquisition in 2013.

Yara is still interested in the plant, and the election of a new board of directors at Petrobras, scheduled for Aug. 19, reopens the door for approval.

The divestment process of the other unit, the nitrogen fertilizer manufacturer UFN-III in the state of Mato Grosso do Sul, was resumed after the sale to Russian Acron PJSC was aborted.

Petrobras said the proposed business plan would preclude government approvals for the transaction at the time.

According to the paperwork for the sale of the asset released by the state-owned firm, a minimum obligation placed on the buyer is the promise to finish the building works of the UFN-III.

UFN-III is attracting interest from CSN, EuroChem, and Yara, among others, although no proposals have been made in a process that is still at an early stage, said a source.

In April, Unigel president Roberto Noronha Santos told Reuters that the Brazilian company is also interested in UFN-III.

Located in the city of Três Lagoas, UFN-III has a projected urea capacity of almost 20% of Brazil’s perceived consumption in 2020, plus 2,200 tonnes of ammonia per day, with consumption of 2.2 million cubic meters of natural gas per day.

Brazil is an agricultural superpower, which strongly demands nutrients for soybean and corn producers.

Rising gas prices, the primary input for nitrogen-rich ammonia fertilizer, increased production costs and reduced part of global production.

Source: Money Times

To read the full original article, please go to: https://www.moneytimes.com.br/fabricas-de-fertlizantes-da-petrobras-atraem-interesse-da-yara/

Sharing is caring!