Yara intervention throws fertiliser joint venture into doubt

Plans for fertiliser producers Terra and Kemira to run their UK operations as a joint venture appeared to be under threat today after rival company Yara bought a controlling share in Kemira’s parent company.

Yara acquired a 30.5% share in Scandinavian firm Kemira and at the same time made an offer for the remaining shares in the €671.8m (£454.5m) company.

Yara said the deal would secure a strong European-based fertiliser industry which would be able to compete effectively in the global fertiliser market.

Industry consultant Roger Chesher said the acquisition fitted in with Yara’s growth plans, but expressed concern over what the deal could mean for competition within the UK fertiliser market.

“Yara has said it wants 10% of the global share of the fertiliser market and currently it owns 6%,” he said. “The purchase of Kemira would take it to 8%, so it is clearly on an acquisitional spree.”

Kemira and Terra announced plans last October to merge their UK operations to help them fend off increasing competition in the fertiliser market and guard against cheaper imports.

Kemira and Terra currently account for about 60% of the UK’s 1.8m tonne fertiliser market, with the remaining demand filled by imports.