Brazilian oil and gas company Petrobras announced the beginning of negotiations with the Russian fertilizer producer Acron, Vyacheslav Kantor, on the sale of two fertilizer plants - Araucaria Nitrogenados SA (Ansa, Paraná) and an unfinished plant Nitrogen Fertilizer Unit III (Mato Grosso doo- Sul.) The Russian side received exclusive rights to conduct negotiations for a period of 90 days.
Ansa plant with the capacity of 1.3 thousand tons of ammonia and 1.975 thousand tons of carbamide per day was launched in 1982. The company also produces reagent-reductant for automobile engines (ARLA 32). The plant Nitrogen Fertilizer Unit III is built at 80.95%, according to Petrobras. Its construction began in 2011 and was frozen in 2014, potential capacity - 3.6 thousand carbamide and 2.2 thousand tons of ammonia per day.
Petrobras in September 2017 decided to get rid of fertilizer plants as part of a large-scale restructuring program. Analysts polled by the Brazilian newspaper Valor Economico estimated Ansa at $ 350 million, and the unfinished Nitrogen Fertilizer - at $ 700 million. However, according to Valor Economico, for this money - $ 1.05 billion - plants will be very difficult to sell and Petrobras will have to make a big discount .
"Akron" produces ammonia in Russia, nitrogenous and complex mineral fertilizers, and produces phosphate raw materials. The company also owns 19.8% of the shares of the Polish fertilizer producer Grupa Azoty. Acron has three port terminals and distribution networks in Russia and China. Recently, the chairman of the board of directors, Alexander Popov, talked about plans to open trading offices in Brazil and Argentina. "We are focusing on Europe and Latin America. Last year we opened Acron France, which allowed us to increase sales of liquid nitrogen fertilizers in the markets of France and Belgium. Now we are considering the opening of offices in Brazil and Argentina, "he said (quoted by Interfax).
Analysts of BCS warn the company of foreign purchases: international expansion has never brought success to companies in the fertilizer sector, according to a review by the investment company. They believe that the deal with Petrobras will have more negative consequences, because it will lead to an increase in debt and a decrease in dividends. The free cash flow of Acron following the results of 2017 after dividend payment amounted to only $ 91 million. The representative of Akron did not respond to RBC's request.
Completion of the Nitrogen Fertilizer Unit III will require significant investment, considering that the works were stopped almost four years ago, and the Ansa plant was idle for most of the year, says Valor Economico. In addition, the new owner will need to provide factories with natural gas for the synthesis of fertilizers, which will have to be purchased in Bolivia. Negotiations with the government of Bolivia on the supply of gas are not easy, the source said.
In April 2018, the owner of Acron, Vyacheslav Kantor, discussed with the Bolivian authorities gas supply issues, the industry publication Fertilizerdaily reported. "We are exploring several investment opportunities in Latin America, and raw materials for fertilizer production are natural gas, so we discussed with Bolivia the opportunities for gas supply," Kantor said at the time (quoted by Fertilizerdaily).
After completion of the construction, Nitrogen Fertilizer Unit III will consume 2.2 million cubic meters. m of gas per day. Ansa plant consumes 430 thousand cubic meters. m of gas per day. Gas prices in the domestic market of Brazil are higher than internationally, Petrobras has a monopoly on the pipe: the new owner of these two plants will have to buy gas from Petrobras or pay companies to import raw materials through its pipelines. But Petrobras will not enter into a long-term gas supply contract with the buyer of the plants, Interfax reported referring to the materials of the Brazilian company.