Fertiliser supplier in negotiations with offshore buyer

Ownership of Australia’s largest supplier of fertilisers may soon be taken offshore, with the potential acquisition to be scrutinised by the Foreign Investment Review Board.

Ownership of Australia’s largest supplier of fertilisers may soon be taken offshore, with concerns the possible move is not in the interest of Australian farmers.

Incitec Pivot Limited, who own mine and manufacturing plant Phosphate Hill in north west Queensland, announced on Wednesday they are in advanced negotiations with Indonesian state-owned enterprise PT Pupuk Kalimantan Timur to sell its fertilisers business, Incitec Pivot Fertilisers, for cash considerations.

This comes after months of reports that PKT was in the box seat for the potential acquisition, with the size of the sale expected to come under the scrutiny of the Foreign Investment Review Board.

GrainGowers chair Rhys Turton said the FIRB need to ensure Australian farmers still have access to a healthy level of supply of fertiliser product if the sale goes ahead.

“We’re not arguing about the price, but we’re just saying that here is an Australian asset, … (so) if it’s sold, the FIRB needs to do their job, and make sure that a percentage of the sale is given to Australian farmers as a priority,” he said.

Mr Turton said Australian farmers are sick of seeing Australian assets, particularly around fertiliser, go to foreign ownership.

“We’re competing with global pension funds to buy land, and we’re buying most of our inputs from foreign owned suppliers, and we’re just getting squeezed all the time,” he said.

“Foreign ownership of Australian fertiliser assets is absolutely not in the interest of Australian farmers.”

GrainGowers chair Rhys Turton. Picture: Richard Wainwright

While PKT have confirmed, subject to the acquisition going ahead, they will continue to supply fertilisers to the Australian market, Mr Turton’s understanding when talks initially began between IPL and PKT was the acquisition would shore up domestic supplies for PKT in south-east Asia.

“That is of no benefit to Australian farmers, if that’s what their objective is.”

Grain Producers Australia chief executive Colin Bettles.

Grain Producers Australia chief executive Colin Bettles said GPA would like to see the FIRB reach out and speak to farm groups about how the potential sale would impact local manufacturing and supply, and that no decisions are made that are contrary to the national interest.

“The national interest test or screening (needs to) include that there’s equal opportunity for Australians to invest (in manufacturing),” he said.

AgForce grains board president Brendan Taylor said more broadly Australia has all the resources necessary to produce its own fertiliser, but government policies need to be encouraging domestic production.

“We’ve got all the ingredients here in Australia for domestically produced fertiliser including urea,” he said.

“If we rely on imported products all the time, we do set ourselves up for failure.”

IPL has been plagued by disruptions in the past year, including the resignation of their chief executive and production difficulties caused by the impact of Cyclone Kirrily.