Incitec Pivot Fertilisers Port Adelaide facility. Photo: IPF

RIDLEY Corporation has confirmed it will acquire Incitec Pivot’s fertiliser distribution business, now operating under the Dyno Nobel name, for $300 million, in a deal that also includes an option to purchase the company’s North Shore site in Geelong for an additional $75M.

Accounting for 46 percent of the eastern Australia’s market, the Incitec Pivot Fertilisers (IPF) network includes 13 primary distribution centres supported by seven regional service centres and three Easy Liquid distribution sites.

Ridley has not purchased the IPF manufacturing assets incorporating the Phosphate Hill operation in north-west Queensland and the manufacturing facility at Geelong in Victoria.

Dyno Nobel has said it is progressing plans to the close the Geelong site, with cessation of manufacturing on track for September, while a strategic review of Phosphate Hill is continuing.

In its half year to March 31, Dyno Nobel announced it had finalised a conditional contract of sale with an unnamed ASX-listed property developer and owner for its 58ha Gibson Island site at Murrarie on the Brisbane River.

The property came to market in January and has sold for a headline price of $194M.

In another move away from the fertiliser industry, Dyno Nobel revealed it had sold the company’s off-take agreement with Perdaman Chemicals and Fertilisers to Macquarie Group’s Commodities and Global Markets business for gross proceeds of up to $145M.

Perdaman is roughly halfway through building a urea plant in Western Australia’s Karratha region, and held a long-term agreement to supply IPF with 2.3 million tonnes (Mt) of granular urea annually for the next 20 years.

Ridley has secured at least 700,000t per year of urea post-commissioning of the Perdaman plant, expected by 2028, on favourable terms relative to its current supply arrangements.

Ridley managing director and chief executive officer Quinton Hildebrand said the company had been “following the Incitec Pivot divestment plans” for several years and “sought ways to introduce ourselves into this process”.

“This strategic acquisition positions Ridley as a leading diversified Australian agricultural services business and establishes a fourth pillar for growth,” Mr Hildebrand said.

“We see significant opportunity for the Incitec Pivot business by bringing focus, investment and leveraging complementary capabilities across the combined entity.”

He said the fertiliser business could also act as a financial counterbalance to Ridley’s existing bulk feed operations, particularly during drought periods like those currently affecting South Australia, parts of Victoria, and southern New South Wales.

He said this dynamic could help offset reduced earnings in either business unit, smoothing out seasonal fluctuations in the company’s overall financial performance.

“We have common customers through the rural retail market and some of the customers for [IPF] are suppliers of grain to Ridley.”

Mr Hildebrand said Ridley will focus on converting the IPF business to an “import model” in line with Dyno Nobel’s focus on reducing and reviewing its operations manufacturing fertiliser.

“[IPF] has been a domestic manufacturing business that won’t be the case going forward; this will be an import model.

“We see the opportunity for us to realign the business to match that model.

“We see the opportunity for us to integrate further through the supply chains to meet the needs of our customers.”

Alongside giving Ridley access to urea made at Perdaman’s Karratha plant, it also provides the company the opportunity to purchase IPF’s Geelong North Shore property.

The North Shore site had operated as a manufacturing and distribution site before IPF in November announced the end of the manufacturing component.

Ridley has agreed to lease the site and holds a put-and-call option to acquire the property for $75M, exercisable either two years after the deal closes, or once manufacturing ceases and remediation work is completed.

Phosphate Hill future in doubt

Ridley has made clear it has no interest in acquiring IPF’s remaining manufacturing asset, now limited to the Phosphate Hill site.

Dyno Nobel is currently undertaking a strategic review of Phosphate Hill with all options considered, including the potential costs involved with closing the site.

The plant has long been hampered by the impacts of cyclones and flooding, disruptions with the supply of gas from Power and Water Corporation, and the costs involved with aging infrastructure.

Dyno Nobel CEO Mauro Neves said the company was “committed to making a decision on the future of Phosphate Hill no later than September this year”.

He said a potential sale was still on the cards for the plant.

Production was 15pc higher at the Phosphate Hill mine in Qld. Photo: Incitec Pivot Limited

“Following extensive engagement with prospective buyers, we are continuing to engage with a party who is conducting due diligence,” Mr Neves said.

Phosphate Hill lifted ammonium phosphate production by 15 percent in the first half of 2025 to 301,300t, putting it on track to reach a full-year output of 740,000-800,000t.

This increase was due to the maintenance activities and weather events that significantly impacted production during HY25.

Fertilisers financials down in HY25

Dyno Nobel has reported a drop in earnings before interest and tax of 50pc or $18M for its fertilisers segment.

Dyno Nobel interim chief financial officer Damian Buttler said this was due to a volume of sales being pushed into the second half of 2025 due to persistent dry conditions across SA, Vic, and southern NSW, and the cyclonic conditions across much of Qld and northern NSW.

“This product has been manufactured and contracted for pick up by customers however the difficult farming conditions has seen if deferred into the second half,” Mr Buttler said.

Total fertilisers sales volumes of 981,000t for HY25 were 3pc down from HY24 sales of 1.007Mt.

Dyno Nobel said this drop in volumes reflected the weaker trading conditions HY25.