Fertilizer supply firm Agrico Canada has reported the end of its two-year-old partnership deal with Norway’s Yara International.
Oslo-based Yara bought a 25 per cent stake in Agrico in May 2008 with an option to buy full ownership by August this year, but has now exercised a put option that will see other Agrico shareholders buy back their shares, Agrico said last week.
“My understanding is the main reason for the cancellation of the deal is that Yara has set a new course for their core business, to be production-orientated,” Agrico president Bob Whitelaw said in a release.
“We are satisfied this change in direction has nothing to do with what Agrico did or didn’t do that led Yara to this decision.”
Yara, whose other Canadian assets include the former Saskferco nitrogen fertilizer manufacturing plant at Belle Plaine in south-central Saskatchewan, as well as some sales operations and fertilizer terminals in Eastern Canada, had no official comment as of Monday.
Yara bills itself as the world’s largest supplier of mineral fertilizers and largest supplier and trader of ammonia, with positions in downstream fertilizer sales and production of industrial chemicals, such as ammonia-derived products, industrial explosives and carbon dioxide for the food and beverage sectors.
Yara had said in 2008 that the aim of its investment in Agrico was to create “logistics synergies” and to reinforce Agrico Canada’s focus on value-added services and customer care.
Whitelaw added that Agrico was “disappointed” in Yara’s change of direction, but said “it will not affect how we, at Agrico, conduct our core business and continue to maintain our excellent working relationship with Yara.”
The news also does not change Agrico’s commitment to its other joint venture partners, Agrico said.
Agrico, based at Mississauga, operates dry and liquid fertilizer supply warehouses in Ontario, Quebec, Saskatchewan, Manitoba and Minnesota and also runs a number of farm centres.