SAFCO's turnaround helps units capitalize on operational integration, says Chairman
19/11/2020 Argaam Special
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Saudi Arabian Fertilizer Co.’s (SAFCO) strategic turnaround will help National Chemical Fertilizers Co. (Ibn Al Baytar), Al Jubail Fertilizer Co. (Al Bayroni) and Gulf Petrochemical Industries Co. (GPIC) capitalize on operational integration, SAFCO Chairman Yousef Abdullah Al-Benyan told Argaam during a virtual press conference.
The three units will be integrated into SABIC Agri-Nutrients Investment Co. (SANIC), which will be 100% acquired by SAFCO, Al-Benyan said, adding that this will reflect positively on agribusiness companies.
The integration will enhance reliability as well as cost efficiency, while making the optimum usage of feedstock input, he added.
SABIC -- which had been seeking to consolidate its holdings in companies specializing in agri-nutrient and fertilizer production -- signed a preliminary deal with SAFCO in Nov. 2018 to divest the resulting combined business.
SAFCO’s acquisition will help the company boost its agri-nutrient product portfolio, strengthen relations with clients, provide full-fledged agricultural solutions and offer value-added services in a more competitive manner, Al-Benyan said.
The company’s turnaround strategy will focus on offering a diversified product portfolio, while enhancing the growth of organic and inorganic operations. SAFCO will expand in the promising markets including Africa, North America and Latin America, while also bolstering the company’s existing operations in Southeast Asia, and creating a global leadership in agri-nutrients.
The deal offers the highest value to all parties. It offers customers the most affordable options to improve quality and cut water consumption, while implementing a vertical integration strategy, Al-Benyan noted.
It sets an operational efficiency model to provide digitized services and agriculture options, turning challenges into promising opportunities, the Chairman said.
SAFCO’s shareholders approved yesterday a 14.25% capital increase to SAR 4.76 billion from SAR 4.17 billion to fund the acquisition of SABIC Agri-Nutrients Investment Co. (SANIC) from SABIC.
SANIC owns 50% of issued capital in the three units; Ibn Al Baytar, Al Bayroni and GPIC.
Shareholders also approved amending the company’s name to “SABIC Agri-Nutrients Co.”, Argaam reported.