Fertiberia, S.A.
Head of Grupo Fertiberia.
- Second largest Spanish company in the chemical sector.
- A leader in the fertilizer industry in the European Union.
- One of the main operators in the world in the ammonia sector.
- Modern, profitable, competitive and fully committed to the environment.
Leadership
- This leadership position is the result of the actions taken and investments made in all the areas of the company since it became part of Grupo Villar Mir.
- Fertiberia S.A. has designed a growth policy based on internationalisation, diversification of its activities and constantly fostering research, thus creating the major multinational group in the chemical sector we know today on the foundations of this historic company.
Fostering sustainable agriculture
The company's
Agricultural Service is in charge of disseminating information about the best fertilizing practices, and each year conducts more than 8,000 soil, plant and water analyses free of charge.
Products
- Fertilizers
The widest possible range of fertilizers for agricultural use: solid and liquid, simple and complex fertilizers
- Industrial products
As a result of its diversification, the company is present in numerous industrial sectors, sales in this area representing 36% of the company's revenue.
- Gardening and Landscaping Line
Structure of Grupo Fertiberia
Production Capacity
Over 5 million tons, representing approximately 80% of the Spanish fertilizer sector.
Industrial structure
At the forefront of the industry, boasting the most advanced technologies worldwide.
- Plants in Huelva, Palos de la Frontera, Puertollano, Sagunto and Avilés.
- Plants owned by the subsidiary, Agralia, in Altorricón, Huesca, engaging in the manufacture of liquid fertilizers for combined fertilizing-irrigation.
- Química del Estroncio, engaging in the production of strontium carbonate, is located in Cartagena.
- In Portugal, ADP Fertilizantes has production centres in Alverca and Setúbal.
Trends for the year
The trend that began in summer 2010, when there was a sharp recovery in demand and prices for agricultural products, and consequently, a recovery was seen in the fertilizer market, continued.
Within the global financial crisis setting, the countries still referred to as emerging countries continue to show strong demand for agricultural products. This provides
stability to the fertilizer industry.
- High raw materials prices, which were noted quite particularly starting in the second quarter of 2011.
- Strength in agricultural product prices, reaching record levels, according to the FAO’s food price index, but declining in the fourth quarter.
- The G-20 made ensuring global food safety an absolute priority, avoiding volatility in food prices and increasing agricultural production by 70%.
- The uncertainty caused by the economic and financial crisis, especially in the United States and the European Union, continued.
World Consumption of Nutrients
Global consumption of nutrients for the 2010/11 farming campaign came to 173 million tons,
6% more than in the previous campaign.
The greatest increases occurred in the Americas, South and East Asia, and Western and Central Europe, whereas the declines took place in Eastern Europe, and Central and Western Asia.
Consumption in the European Union
Fertilizer consumption in the European Union increased by 8%, with a volume of 16.1 million tons: 10.8 million tons of nitrogen, 2.5 million tons of phosphorus pentoxide and 2.8 million tons of potassium oxide, representing increases of 7%, 8% and 15%, respectively.
In the EU-15, there was 9% growth, with an 8% increase in the case of nitrogen and phosphorus, and up to 17% in the case of potash. The EU-12 countries experienced more limited increases, of 5% overall for nutrients.
Forecasts
Global forecasts for the 2011/12 farming campaign show a 3% increase in consumption, with the highest demand occurring in South and East Asia, and in Latin America.
Fertilizer consumption in Europe in upcoming years will be marked by the new Common Agricultural Policy reform, two basic goals of which are to achieve more productive and competitive agriculture and greater environmental restrictions, which will affect fertilizer consumption.
Financing obstacles will require farmers to optimise the profitability of their production, leading them to use fertilizers in the most efficient manner possible.
Estimates by Fertilizer Europe on consumption in Europe over the next ten years show a slight increase in demand, namely 3%, with a volume of 10.8 million tons of nitrogen, 2.6 million tons of phosphorus and 3.2 million tons of potassium.
The longterm forecast shows upward trends for the EU-12 and the three main nutrients and, conversely, the trend is negative for the EU-15 in the cases of nitrogen and phosphorus.
Spanish agriculture in 2011
The agricultural sector is faring the tough economic situation better than other sectors, registering lower numbers of job losses. In general, 2011 should be considered a good year, with satisfactory harvests and consumption, and stable prices.
Relevant details:
- Highly irregular weather conditions, with a dry winter season, followed by months of heavy rains until April, then experiencing a completely dry spring and summer.
- Irregular progress of autumn-winter grain crops, although the harvest was 10% higher than the previous year.
- Relevant details regarding the most generic crops:
- High prices for cereals and oil-producing plants.
- 25% increase in corn production
- Rice production remains stable.
- Reduction in fruit and vegetable production, strongly affected by the E. Coli crisis.
- Price and market crises for olive oil and citrus plants.
- Increase in surface areas for pulses and sunflowers due to price levels.
- Rising production costs in general, because of high energy costs, a situation that persisted throughout the year.
Fertilizer market volume
According to data provided by the National Association of Fertilizer Manufacturers (ANFFE),
in 2011 a total of 4.2 million tons of fertilizer was consumed, representing a 6% decrease from the previous year.
The
simple nitrogenous fertilizer market was 2.1 million tons, which is 10% lower, demand for
ammonium and ammonium-calcium nitrates fell by 12%, nitrosulphate did so by 22% and
urea by 11%. Demand for
nitrogenous fertilizers also dropped, as a result of the competition from strong imports.
The complex NPK fertilizer market was 1.5 million tons, slightly lower than in 2010, while ammonium phosphate consumption registered a 2% drop. In both markets there was a decrease in imports.
Plant Production fell in value by 1.8% while Agricultural Income, totalling EUR 21,932 million, experienced a 4.5% drop.
Fertiberia, S.A. Trends for the year
Revenue at Fertiberia came to EUR 796 million, 16% more than the previous year. Of this total, 522 million pertain to the domestic market and 274 million to exports.
The
sales registered on the domestic fertilizer market, including special products, reached 1.3 million tons, with revenue of EUR 397 million, which is 11.5% higher than the previous year.
Per product, on the domestic market, the ammonium and ammonium-calcium nitrate market came to 552,000 tons, and in the case of urea, 215,000 tons were sold, 113,000 tons of nitrogenous solutions and 53,000 tons of ammonium nitrosulphates. In general, these figures are slightly lower than those for the previous year.
Fertiberia placed 237,000 tons of complex NPK fertilizers on the market, and the volume of ammonium phosphate sold was 105,000 tons.
Industrial product sales totalled 935,000 tons in volume, compared to 902,000 tons sold in 2010. Revenue came to EUR 302 million, compared to EUR 231 million registered the previous year. Exports represented 48% of the volume of industrial chemical product sales.
On the
foreign fertilizer market 356,000 tons of products were distributed. 180,000 tons of ammonium-calcium nitrates were exported, 113,000 tons of ammonium nitrosulphates, 20,000 tons of urea, 18,000 tons of complex NPK fertilizers and 9,000 tons of ammonium phosphates. As a whole, sales of these products reached EUR 97 million. Once again, Fertiberia's strong position as an ammonium-calcium nitrate supplier on northern European markets is worthy of note. Nitrosulphate exports to Ireland, the United Kingdom and France are also worth noting.
Since Fertial joined the Chemical and Fertilizer Division of Grupo Villar Mir in 2005, Grupo Fertiberia has become one of the main operators on the international ammonia market. In 2011
ammonia movements reached over 794,000 tons, which is quite similar to the figure managed in 2010. However, the revenue figure was more than 260 million, compared to the EUR 214 million recorded in 2010, representing a 21.5 % increase. This increase is due to the 43% price hike for ammonia on international markets.
Fertiberia further strengthened its relevance on the
reagents for NOx gas abatement market aimed at the automotive industry and other industries, in line with the incessant growth of environmental awareness and the increasingly stringent environmental legislation. Thus, Fertiberia is one of the main European operators on the
AdBlue market, a reagent for NOx gas abatement in the automotive sector and other reagents for other industries such as cement plants, incinerators or thermal plants.
The manufacture of
special products for combined fertilizing-irrigation was further fostered, in line with market trends, and in light of the increase in land farmed using this technique, which now covers more than 1.65 million hectares.
Fertiberia sold more than 190,000 tons of special products, a similar figure to that registered in 2010. In economic terms, revenues came to a total of EUR 37.4 million, which represents a 3.8% increase.
The sum of ordinary
investments authorised and undertaken at Fertiberia's plants in 2011 was EUR 21.58 million, and once again, those made in the areas of environment and safety are worth highlighting.
Regarding
industrial activities, the increase in demand for nitrogenous solutions and products such as nitrosulphate was satisfactorily met thanks to the
highly stable operations at the processing plants. Strong demand and high production rates enabled the plants to achieve good production ratios as regards the Annual Operating Programme.
Likewise,
production yields of intermediate products such as ammonia and nitric acid remained at a highly stable activity rate, with ratios in excess of 95%.
Regarding complex
NPK fertilizers, production has been adjusted to customers' specific demands, seeking a lower nitrogen grade product with less P2O5, which allows for less intense activity at the factories.
At the
Sagunto plant, a new ammonia solution production unit for abatement of nitrous gases generated by combustion at power plants and cement factories was launched. Production amounted to 25,000 tons, while the installed capacity is 70,000 tons per year.
Production Fertiberia, S.A.
(Thousand Tons)
In turn, as part of the
recycling process for water used in manufacturing phosphoric acid at the Huelva plant, a water treatment unit went into operation.
While 2010 witnessed the first time the company met the “
Zero Accidents” goal for staff, in 2011 this milestone was reached for service company staff members, earning Fertiberia the
Special Safety Award from FEIQUE (Federation of Spanish Industrial Chemical Companies) for its accident rate. All the production centres beat their own records for “days without accidents”.
Regarding
the issue of quality Fertiberia has a Quality Management System in accordance with the requirements of ISO Standard UNE-EN 9001:2008, the aim of which is full customer satisfaction.
This awareness about safety has led the number of complaints to drop over time, bringing our current satisfaction rates to levels that are hard to surpass.
As for
environmental issues, the most relevant items are the Applications for Greenhouse Gas Emission Allowances for the 2013-2020 period, which will affect the ammonia and nitric acid production facilities. It is important to note that, through the
Jointly Implemented Projects in Spain for N2O emissions reduction at Fertiberia Puertollano, Fertiberia Avilés and Fertiberia Sagunto, Fertiberia adapted these production centres to the new directive before the deadline.
After the
final shutdown of the phosphoric acid and sulphuric acid plants in Huelva, as a result of the prohibition to dump phospho-gypsum into the settling basins, Fertiberia presented an environmental recovery project for completely replanting the zone. This year, as part of this ambitious comprehensive project, the Water Treatment plant for the phospho-gypsum pools was set up and entered into operation.
The significant investments made in an effort to reduce emissions and dumping must be highlighted. Fertiberia's rates regarding this issue are well below the authorised levels under European regulations. This past year investments were made regarding the environment totalling € 3.6 million.
The permanent
workforce at 31 December 2011 consisted of 848 employees.
The Strategic Planning Division continued to prepare reports about the setting in which Fertiberia operates, facilitating decision- making in other departments with the ongoing aim of fostering possible business opportunities.
Research activities continued in 2011, with 17 research projects in progress in conjunction with public research organisations, technological institutes and centres and universities.
The company's
Agricultural Service held more than 80 expert seminars focused on fostering the correct use of fertilizers. In early 2011, the Fertilizer Diagnosis and Recommendation System (SIDDRA) became available to our customers. Furthermore, demand for soil, plant and water analysis services and the corresponding fertilizing recommendations surpassed 8,000 samples.
Profit for the year
Despite the highly complex situation that numerous European economies and sectors are experiencing, Fertiberia achieved
highly satisfactory results.
The main cornerstones upon which the company's growth is based, combined with strong demand and prices for agricultural products, fertilizers and the industrial products manufactured and marketed by Fertiberia, have allowed us to achieve these results.
In this context, the following must be pointed out:
- EBITDA, which in 2010 came to € 89.45 million, was € 121.33 million in 2011.
- EBIT went from € 67.12 million in 2010 to € 104.84 million in 2011.
- In 2011, net profit led to gains of € 72.26 million.
- The total net bank debt for the company (not including cash on hand and IFTs) has continued to drop, placing the net bank debt figure at € 91.88 million at 31 December 2011, compared to € 114.21 million at 31 December 2010, which represents a 20% reduction.
At 31 December 2011, Fertiberia’s statement of financial position was quite sound, reaching a guarantee ratio (Total assets / Total Receivable) equal to 1.9 times. Bank borrowings represented just 19.6% of the Company's total liabilities.
Main figures income statement and balance sheet
Prospects for 2012
2012 will also be a difficult year for the Spanish economy and businesses. However,
forecasts show that the results for the year in progress will be as positive as those attained in recent years, bolstered by strong price levels and consolidated demand, and by the stability that our internationalisation and diversification policies offer with regards to our income statement.
We are facing a global situation in which it is essential to increase the productivity of crops as a result of the increase in demand for food products linked to demographic growth and changes in eating habits among the global population. In this setting, once again, we must highlight the essential need to use fertilizers on crops in order to achieve this goal. Therefore, Fertiberia will continue to strengthen its position as a leading company in the sector.
Grupo Fertiberia - Significant Data Evolution
ADP Fertilizantes, formerly Adubos de Portugal, joined Grupo Fertiberia in 2009. Given that internationalisation is one of the mainstays in the design of Fertiberia's growth policy, this Portuguese company's inclusion in the group was a completely logical operation of mutual benefit to both parties. Fertiberia and ADP were able to take advantage of numerous existing synergies, from the supply of raw materials to the production policy to the marketing of the products.
ADP Fertilizantes is a leader on the Portuguese fertilizer market, with a 70% market share, and also operates through a subsidiary in Brazil, facilitating the company's entry into the increasingly relevant Latin American market.
Production is focused mainly on manufacturing special fertilizers with high added value, and it has an installed capacity of more than 1.1 million tons, which are produced at the Alverca and Setúbal plants.
ADP Fertilizantes has a wide-spanning network of distribution and storage centres covering all the demand from the domestic markets in both Portugal and Spain, as well as foreign demand, particularly from Morocco. Its eight warehouses located in Portugal and the two in Spain are connected with the respective factories by rail or road, enabling us to quickly meet demand from customers.
Nearly 80% of its customers are official distributors, 20% are cooperatives and the remaining 2% is sold directly to end customers. ADP has a subsidiary in Spain,
Intergal, which distributes products in this country. The company's sales team is composed of 40 expert sales representatives in the two countries.
In 2011, ADP Fertilizantes purchased Nova AP, the Nitrato de Amonio de Portugal, S.A. factory devoted to the production and marketing of nitrate liquor and nitric acid. This transaction had been foreseen from the time Fertiberia purchased ADP Fertilizantes in 2009.
Nova AP produces and markets ammonium nitrate, nitric acid and by-products to the ADP production centres in Alverca and Setúbal. This acquisition ensures that ADP will reach the industrial chemical markets in the most comprehensive and efficient fashion. The purchase of Nova AP officially took place on 15 November, at which time a corporate restructuring was undertaken, redefining its logistics network and implementing an investment programme aimed at producing new products.
Meanwhile, there was a decline in the markets on which ADP traditionally operates, particularly in the domestic market, mainly as a result of the reduction in the area devoted to planting.
In spite of this
drop in sales on the domestic market, exports increased by 50% in terms of volume, primarily thanks to the strong performance of the ammonium calcium nitrate in northern Europe. On the Brazilian market, sales of special fertilizers surpassed 15,000 tons, a figure which is similar to that achieved in 2010.
The
activity at the complex fertilizer plants registered a slight increase of nearly 3%, and the
nitrogenous fertilizer production plants worked at full capacity.
In 2011, the
Environmental Management System was implemented at the production centres and the Responsible Product Management System Certification was renewed, in accordance with the "Product Stewardship Management System" standard by Fertilizer Europe.
Moreover, we successfully renewed the
Quality Management System according to ISO standard 9001:2008.
Regarding
Safety issues, new enhancements were introduced in the Safety Management System, Accident Prevention and Organisation of Emergency Plans.
ADP continued to implement its collaborators’ qualification plan, improving their competence skills at several levels. Despite the restructuring processes, a good company climate still exists.
The
results for the year must be seen in a highly positive light. The rising price trends for raw materials in general and the prices of the main agricultural products and fertilizers have benefited manufacturers. However, in the case of ADP Fertilizantes, the end product price led to a certain shrinkage in demand.
However, the diverse actions taken in different areas of the company enabled it to achieve a highly satisfactory
EBITDA of € 14.8 million.