INDUSTRY body GrainGrowers has called for additional information about the potential sale of Incitec Pivot’s fertiliser business to foreign interests, citing growing concerns from members over future supply.

GrainGrowers chair Rhys Turton said the industry required assurance that the sale to the preferred bidder, the Indonesian Government-backed fertiliser company Pupuk Kaltim, was in the national interest and would allow growers to access consistent supply levels.

“The Foreign Investment Review Board  and ultimately the Treasurer need to reassure the industry that any purchase is not just an asset grab at the expense of Australian producers,” Mr Turton said.

“Incitec Pivot is Australia’s largest fertiliser manufacturer and distributor, so the genuine concern is that additional product could be moved offshore, impacting our longer-term food security, reducing supply and increasing costs to producers.

Mr Turton said Pupuk Kaltim claimed to be South-east Asia’s largest urea fertiliser producer and had previously stated a desire to purchase phosphate and potash fertiliser assets, unavailable in Indonesia.

“Access to Australian assets and resources must not be allowed to come at the expense of Australian producers.”

Mr Turton said GrainGrowers had contacted the FIRB to understand the next steps as the sale process continues.

“Given the business is expected to bring about $1.5 billion, the deal will be subject to close FIRB scrutiny and approval.

“Ultimately, however, it will be up to the government to ensure that any sale is in the national interest, and to include growers and industry in those discussions.”

“The guarantees that we need to see in place cover the ongoing and uninterrupted supply of fertiliser products; no long-term impact on Australian food security and the future development of fertilisers assets such as Phosphate Hill in Queensland.”

“Growers are concerned and need answers and more information about a sale that can potentially seriously impact their business operations.”

In a statement issued to the ASX on July 12, Incitec Pivot Fertilisers’ parent Incitec Pivot Limited said it noted there had been speculation that it may be considering a potential sale of its fertilisers business, but has not named any interested parties.

“IPL confirms that it has received a number of approaches for the potential acquisition of its fertilisers business,” IPL stated.

“The Board’s assessment of a potential sale is being considered alongside the proposed demerger, which remains a strategic priority for the Board.

“The Board will continually assess all options to ensure shareholder value is maximised.

“Discussions are incomplete, and there is no certainty that any agreement will be reached or that any sale transaction will occur.”

Source: GrainGrowers, Incitec Pivot Limited