Nutrien agrees to sell 50% stake in top Argentina urea producer Profertil

Canadian fertilizer producer Nutrien announced on Sept. 8 an agreement to sell its 50% stake in nitrogen fertilizer producer Profertil in Argentina, valued at $600 million, to Adecoagro and Asociación de Cooperativas Argentinas.

The other half of Profertil, Argentina's main urea producer, is owned by the state-controlled oil company YPF. Its nitrogen plant in Bahía Blanca, Buenos Aires province, has a production capacity of around 1.1 million mt/year of granular urea, making it the largest urea plant in the country, according to S&P Global Energy data.

The transaction is expected to be completed before the end of 2025, as it is subject to customary closing conditions, Nutrien said. YPF holds a 90-day right of first refusal to purchase Nutrien's equity on the same terms and conditions.

The proportionate share of Profertil's earnings recorded in Nutrien's Nitrogen operating segment totaled approximately $60 million over the previous four quarters, Nutrien said.

"The agreement to sell our equity stake in Profertil advances our strategy to focus on assets and geographies that are core to our long-term vision," said Ken Seitz, Nutrien's president and CEO, in a Sept. 8 statement.

Nutrien expects these initiatives to support long-term growth in free cash flow.

"We intend to allocate the sale proceeds to initiatives consistent with our capital allocation priorities, including targeted growth investments, share repurchases, and debt reduction," Seitz said.

Nutrien has also tried to sell its retail assets in Argentina since 2024, but investor interest has not been attracted so far, as the business is not profitable, a source in the market said.

"Profertil and Nutrien are independent companies; this announcement does not change the focus of our Retail team in Argentina, where we operate a network of retail locations that provide a range of products including fertilizers, seeds, and crop protection products," Nutrien's press office told S&P CI when asked about their business in the South American country.

"Our team in Argentina is currently working to further optimize our operations and continue to provide our farming customers with the essential products and services," Nutrien added.

Solid business and possible expansion

Urea is the most widely used fertilizer in Argentina. Nitrogen, compared to phosphates, represents more than half of total consumption, which is projected to reach 5 million mt in 2025.

The total Argentine urea market is approximately 2.1 million mt, around half of which is supplied by Profertil. According to sources, other players import any additional urea demand beyond Profertil's supply.

The sale of Nutrien's stake in Profertil was reported in June. According to sources in the market consulted by Platts, several companies from the energy and agribusiness sectors were interested.

"The market is solid, and as Argentina imports additional tons of urea needed, there's still room to grow, especially with strong demand from Brazil," a market participant said.

"The gas reserves in Argentina are a competitive asset to participate in the fertilizers market," he added.

Profertil has a major expansion in the works valued at about $1.8 billion. It aims to double production to increase its share in the local market and export to Brazil.

The Asociación de Cooperativas Argentinas represents around 50,000 farmers, with a cooperative infrastructure for their agricultural needs. Currently, it produces single superphosphate and P2O5 in partnership with Bunge.

The other buyer in the joint acquisition, Adecoagro, is a leading agro-industrial company in South America. It operates across various sectors, including crop farming, cattle and dairy production, the generation of sugar, ethanol, and energy, and land transformation.

Platts, part of S&P Global Energy, assessed granular urea at $440-$460/mt CFR Brazil on Sept. 4.