The JV is anticipated to become the largest export-focused nitrogen fertilizer platform globally and the largest producer in the MENA region with a production capacity of 5 million t of urea and 1.5 million t of sellable ammonia. Annual revenues for the combined entity are US$1.74 billion, based on 2018 pro forma figures. ADNOC and OCI will own a 42% and 58% stake in the JV respectively.
In conjunction with the JV, ADNOC Fertilizers has also signed a new long-term gas supply agreement with ADNOC, which will provide its facilities in Ruwais, United Arab Emirates, with the required feedstock for its operations based on a competitive pricing formula.
The JV will be based in Abu Dhabi and registered in the Emirate’s international financial centre, Abu Dhabi Global Market (ADGM). The board of the new entity will consist of 6 members nominated by OCI and 4 nominated by ADNOC. H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and Chief Executive Officer (CEO) of the ADNOC Group, will be Chairman of the Board.
Nassef Sawiris will assume the role of CEO of the JV, alongside his current role as CEO of OCI. His leadership will be supported by a joint management team of experienced key executives from OCI and ADNOC.
H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “We are extremely pleased to have created this new joint venture with OCI who are a world leader in nitrogen fertilizers and share our ambition and vision to grow our new combined fertilizer business. 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. It will also enable us to access new markets, benefitting both existing and new customers.”
He added, “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 fertilizer portfolio. It also supports ADNOC’s objectives to attract investors to Ruwais by leveraging its strategic location, world-class logistics and the UAE’s abundant gas resources at commercially attractive terms. It is another milestone in the delivery of ADNOC’s 2030 strategy and our ambitions to expand ADNOC’s Downstream portfolio.”
Nassef Sawiris, CEO of OCI N.V. commented: “I am very pleased to start a long-term strategic partnership with ADNOC, a company which has a clear downstream strategy and drive to unlock value. This partnership creates a first-of-its-kind export platform with best-in-class cash conversion metrics. I believe that this platform has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders”.
Read the article online at: https://www.worldfertilizer.com/nitrogen/19062019/adnoc-and-oci-form-joint-venture/