Phosphate group OCP to acquire 50% stake in Spanish animal nutrition firm

28-Sep-2022 - Last updated on 28-Sep-2022 at 12:58 GMT

Phosphate player, OCP Group, is to purchase a 50% stake in animal nutrition business, GlobalFeed, from Spanish fertilizers group, Fertinagro Biotech.

GlobalFeed produces and distributes a wide range of animal feed products, and has a large global sales presence. Located in Huelva, Spain, it has annual production capacity of 200,000 tons in terms of phosphate-based products and 30,000 tons of iron sulfate products - a portfolio targeted at feed for poultry, pigs, and ruminants and for aquaculture.

Marouane Ameziane, MD, specialty products, OCP Group, said the deal would increase the Moroccan group's footprint in the animal nutrition space: “This acquisition confirms OCP’s objective to diversify its phosphate solutions and become a leading player in the animal nutrition sector, addressing growing demand and expanding its offerings to specialty sustainable and customized products."

Commenting on the deal, Chris Lawson, head of fertilizers, CRU, told us: "OCP already has a presence in Spain through its 20% ownership of Fertinagro Biotech, which is part of the Tervalis group. So this deal is an extension of that, but is more directed towards the animal feed phosphate market."

OCP has been growing its share of that market after building out its own production capacity and marketing capabilities in recent years, he added. "We assume OCP will be the key supplier of phosphoric acid into [the GlobalFeed] plant."

The transaction is subject to customary closing conditions, including regulatory approvals.

Record earnings

In Q2 and H1 2022 earnings results released last week, OCP noted the “exceptional financial performance” for the group in the first half of the year, citing the higher prices across its product categories, together with continued production and operating efficiencies, resulted in an “industry-leading” EBITDA margin of 50%.

H1 2022 revenues significantly increased to US$5.76bn, compared with US$3.65bn in the same period of 2021.

“A confluence of factors notably, increased input costs, supply chain disruptions and export restrictions, layered over growing global demand, have caused average phosphate prices to more than double compared to last year’s first half. Substantial double-digit revenue growth was achieved in each of our three product categories, as higher prices more than offset lower volumes. The sharpest increase was in fertilizers, where revenue increased 69% year-on-year.

“We continued to maintain a geographically diversified customer base, with high demand markets like South America and Africa accounting for 56% of total first half revenues.”