Abraaj Group acquires minority stake in Indorama Fertilizers

13 Oct 2016
Financial Nigeria

Summary

The Abraaj Group said the fertilizer industry is expected to experience long-term demand growth as increases in populations and incomes drive demand for food.

Arif Naqvi, Founder and Group Chief Executive, The Abraaj Group

The Abraaj Group has acquired a minority stake in Indorama Fertilizers, the largest urea fertilizer manufacturer in Sub-Saharan Africa, for an undisclosed amount, according to a statement released today.

The Dubai-based private equity firm said the stake was purchased from Indorama Holdings B.V. Netherlands, a wholly-owned subsidiary of Indorama Corporation, a global manufacturer of industrial products including Polyethylene, Polypropylene, Polyester, Spun Yarns, Fabrics, Medical Gloves, and Fertilizers.

“This is a landmark transaction for Abraaj in Sub-Saharan Africa. We are privileged to be partnering with Indorama Corporation to create a global fertilizer leader in Africa,” said Arif Naqvi, Founder and Group Chief Executive, The Abraaj Group. “Having successfully invested in the fertilizer business in North Africa, we look forward to leveraging that know-how and working with the management team in developing the company’s route-to-market infrastructure, build its network and support its capacity expansion and product diversification plans in the region.”

Indorama Fertilizers operates a world-class, 1.4 million metric tonnes per annum urea manufacturing facility based in Port Harcourt, Nigeria. The plant plays a key role in supporting the agricultural sector in Nigeria by providing a reliable supply of fertilizers for local farmers. The plant also serves neighbouring West African countries and key Western hemisphere markets, including North America, South America and Europe.

The Abraaj Group said the fertilizer industry is expected to experience long-term demand growth as increases in populations and incomes drive demand for food. As a result, Indorama Fertilizers is uniquely positioned to become a global fertilizer leader, given its execution capabilities, competitive production costs, and the strength of its management team. The fertilizer company will also establish Nigeria’s reputation as a key producer and exporter of fertilizer, channelling foreign exchange into the country, while also enabling Nigeria to meet the significant requirements of the domestic fertilizer market.

“We are pleased to welcome The Abraaj Group as an investor in our fertilizer business as we endeavour to create a world-class manufacturing and distribution network for fertilizers in the African continent, to meet the needs of underserved farmers and help propel the growth of the agricultural sector even further,” said Sri Prakash Lohia, Founder and Group Chairman, Indorama Corporation.

The Abraaj Group has been present in Africa for two decades, investing over $3 billion in a range of sectors including healthcare, financial services, logistics, consumer goods, and food and beverage. In 2015, the company raised $1.3 billion for its Africa-focused funds.


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