North America Giant Fertilizer Merger

Fertilizer prices have been falling in the recent years causing an erosion in the fundamentals of the industry, to which is has responded consolidating.

PotashCorp (POT) and Agrium (AGU) announced a merger of equals expected to be completed by the middle of 2017 that would create the world’s largest crop-nutrient supplier with a market value of about $26 billion. For an understanding of the significance of this new enterprise compare with the market capitalization of Mosaic (MOS) of $8.9 billion or CF Industries (CF) of $5.6 billion.



PotashCorp Allan Potash Operations


This is a deal of giants. PotashCorp is the largest world fertilizer company by nutrient capacity (14.2 million tonnes p.a.) and they are a low-cost potash producer (in the recent quarter they outflanked competition with the lowest cost per ton at $127 of potash produced). Agrium is a leading global producer and marketer of agricultural nutrients with a 4% of the global production capacity of potash, a 2% of ammonia, a 1% of urea, and 1% of phosphate. Agrium’s retail unit buys 10 million tons of fertilizer annually. The combined company would control the majority of North America’s potash production and more than 30 percent of North American nitrogen and phosphate production.



Agrium Vanscoy Potash Operations


The new company will be a leader in the fertilizer industry with close to 20,000 employees and operations and investments in 18 countries. PotashCorp shareholders will own 52% of new company.

The merger will result in low regional market overlap as the majority of PotashCorp fertilizer assets are in the eastern half of the U.S., Agrium’s nitrogen and phosphate assets are concentrated in western North America.  It is expected to generate up to US$500 million of annual operating synergies mainly from distribution and retail integration, production and SG&A optimization, and procurement.

The merger of the world’s largest fertilizer producer with the world’s largest ag-retailer is drawing the attention of the regulators and farmer groups.


Fertilizer Consumption Snapshot













Lithuania: Plans for food-grade phosacid production

EuroChem Group 100% owned company Lifosa plans to invest approximately 75 million euros in the production of food-grade phosphoric acid.

The Kedainiai headquartered company was founded in 1963 and deals with the production and wholesale of nitrogen-phosphorus fertilizers, feed phosphates, and aluminum fluoride.

Lifosa netted a profit of 61.617 million euros last year, up by 35.2% from 45.579 million euros in 2014. Its sales revenue rose by an annual 18.3% to 412.687 million euros.

Main Fertilizer Companies

Top10 Companies Capacity

Top10 Companies Sales




Russia: Uralchem increased phosphate processing

Despite the weak global fertiliser demand, Russian producer Uralchem, one of the world’s largest ammonia and nitrogen fertilisers producer, is increasing its phosphoric acid production by the end of 2016. The ramp-up is part of the group’s long-term strategy to reinforce existing market share.  Following the reopening of its Voskresensk Mineral Fertilizers business, Uralchem quadrupled MAP output in the first half of the year despite the current “complex global market”. Average MAP and DAP (FOB Baltic Sea) prices for the first three months of 2016 were $353/tonne and 366$/tonne, respectively, trailing their first quarter 2015 average prices by 27%for MAP and 25% for DAP.

Fertilizer Prices


India: Greenstar Fertilizers will double its phosphoric acid capacity

Tuticorin-based Greenstar Fertilizers (GSFL) acquired its phosphoric acid capacity from SPIC and now they plan to double their 75,000 tonnes per annum nameplate capacity. The revamping program is expected to take 12 to 18 months to be completed. They also plan to create in the next three years an additional 15,000 tonnes ammonia storage facility and a 600,000 tonnes DAP production facility.

India’s current phosphoric acid capacity is slightly over two million tonnes P2O5 and it’s DAP capacity is over 3.5 million tonnes P2O5.

Mineral Production Used by the Fertilizer Industry





Potash Fertilizers Snapshot

Potassium is an essential plant nutrient and an essential nutritional requirement for both humans and animals, for which there is no effective substitute. Potassium is used to make fertilizer, biofuels, gunpowder, and various industrial chemicals. About ninety percent of potash is used for fertilizer manufacture. Potassium Chloride (KCl) is the most common source of potassium. The mineral plays a vital role in crop growth and helps plants resist cold and drought. Due to its high chlorine content, MOP is widely used in chlorine resistant crops such as wheat, rice, soya, maize, and pastures.

Potassium intake is also important in animal nutrition and milk production.

Potassium sulphate and potassium nitrate are the main non-chloride K fertilizers.



Potash reserves are concentrated in just a few areas: major producing regions include the FSU, North America, Germany, and the Dead Sea area.



k_production 2014

Compared with other fertilizer nutrients, the potash industry is much consolidated, with Canada, Russia, Belarus and Germany accounting for more than 3/4 of world production. There are about twelve large potash manufacturers, most of them non-governmental owned.



         Source: Agrium Fact Book 2014-2015


Potash changes are driven mainly by the demand of the global fertilizer industry, in particular the Indian and the Chinese one, but also by the growth of the agrofuel production. The key crops influencing the potash price are first of all corn, and then soybeans and rice.


Potash Production Process



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