National interest at stake in potential Incitec sale

Australia’s national interest could be at stake if Incitec Pivot’s fertiliser business is sold to foreign interests, an industry group has warned.

Grain Producers Australia chief executive Colin Bettles: “We would expect that the FIRB (Foreign Investment Review Board) would go through a rigorous and thorough process to assess whether or not this (sale) is contrary to Australia’s national interests.”

A farming group has raised concerns about the potential sale of one of Australia’s largest fertiliser manufacturers to foreign interests.

Incitec Pivot last month confirmed it had received approaches to buy its fertiliser business, worth a reported $1.5 billion. Media reports suggest Indonesian government-backed fertiliser giant Pupuk Kaltim is the preferred bidder.

Grain Producers Australia chief executive Colin Bettles said: “We would expect that the FIRB (Foreign Investment Review Board) would go through a rigorous and thorough process to assess whether or not this (sale) is contrary to Australia’s national interests.

“And we would expect that farmers would be at the forefront of that discussion.”

Incitec Pivot is one of Australia’s largest fertiliser manufacturers and distributors, supplying phosphate and urea to farmers across the country.

Mr Bettles said Australian farmers needed a reliable domestic supply of fertilisers, and there was a risk, if IPL was bought by foreign interests, that Australian farmers could miss out or be forced to pay more when they needed fertiliser most.

Australian farmers could be vulnerable fertiliser supply issues if domestic producer Incitec Pivot is sold to foreign interests, Grain Producers Australia has warned. Picture: Tara Croser.

“In a year where there’s tight (fertiliser) supply, a foreign owned entity could potentially send that supply to their country of origin, rather than supporting local producers. And as we know, that could lead to cost shifting onto Australian farmers, or that the domestic supply suddenly is lower and the prices we pay are higher because there’s a significant impact on our ability to source that local supply,” Mr Bettles said.

“We can’t keep selling the back paddock and still be expected to pay the bills.”

Incitec Pivot has the rights to all of the 2.3 million tonnes of urea expected to be produced by fertiliser manufacturer Perdaman’s planned $4.5 billion Western Australian fertiliser plant, which expects to enter production in 2027.

The plant will be Australia’s largest, producing the equivalent to 96 per cent of the volume of urea currently imported into Australia, and has been lauded by industry groups as a key domestic supplier of the farming input after Incitec Pivot closed its Gibson Island manufacturing plant last year.

Incitec Pivot has signed an offtake agreement for 2.3 million tonnes of urea from Perdaman’s Western Australian plant — all the urea the plant is expected to produce. Picture: iStock

The Perdaman plant has received a huge injection of taxpayer funds, in the form of a federal government loan worth $255 million.

IPL is also a major phosphate producer. Its Phosphate Hill mine, near Mt Isa in Queensland, produces about double Australia’s annual phosphate demand of 400,000 tonnes.

Pupuk Kaltim is a major fertiliser player in Asia, but does not have any interests in Australia.

Media reported in May it was accelerating its expansion to fill a global market gap left following Russia’s invasion of Ukraine.

Global gas shortages last year as a result of Russia’s invasion led to record urea price spikes and enormous global demand for fertilisers.

Incitec Pivot declined to comment.