Vale to Acquire Fertilizer Companies: Major Plans

"Vale is investing in the fertilizer industry in order to become a leader in the
global market."

Even though it is not bidding for Potash, Vale says it has ambitious plans for the fertilizer sector, including acquisition of assets in the coming years. There is already the expectation that the company will fatten its budget for the sector, currently at $12 billion by 2014.

Mário Barbosa, executive director of fertilizers Vale, said that the mining company is attentive to the current environment of consolidation in the sector: "There are companies in the process of consolidation that will become small if they do not join others," "If opportunities arise that make sense, we always look."

With the profile of a buyer, Barbosa led Bunge and Fosfértil and bought almost one new company per year. "You know my past. (...) I bought some 14 companies over these 15 years," he said.

Personal friend of the President of Potash, Bill Doyle, Barbosa said he believed that entering the race for the Canadian company would be a "very big step" for Vale right now. It was BHP Billiton that made a hostile bid of $ 38.6 billion for Potash, a low value that was flatly rejected.

Barbosa confirms by saying that "We're talking about $ 45 billion" he says.

The greater appetite for the mining assets of fertilizers has as its background the prospect of expanding global demand for food.

Barbosa is adamant that he wants Vale as the second in the world in four to five years. Today the mining giant ranks ninth in the potassium sector and fifth in phosphate.

With information from O Estado de S. Paulo.

From Vale's site:

"Vale is investing in fertilizers to supply the Brazilian market and contribute to the development of agriculture in the country. The industry is divided into three important groups of nutrients: potash, phosphates and nitrogen.

Phosphate production consists of mining phosphate rock and then transforming it into phosphoric acid. The main input for the production of many types of fertilizers, phosphate is absorbed by plants in the form of P2O5, among many other micronutrients.

Potassium is a basic nutrient for plant life and promotes resistance to diseases, attacks by insects, low water availability and temperature extremes.

The company has been developing projects and acquiring fertilizer assets with the aim of transforming Vale into one of the world’s largest producers over the next seven years. Vale’s annual output targets for 2017 are approximately 10.7 million tons of potash and 19.2 million tons of phosphate rock."