Canadian fertilizer producer Nutrien is seeing strong interest from potential buyers for its retail assets in Argentina, Chile and Uruguay, CEO Ken Seitz said in an interview Thursday.
The company prefers to sell the assets, which provide fertilizer and other products to farmers, as a package, he said.
WHY IS IT IMPORTANT?
Nutrien wants to improve the stability of its revenues and currency controls in Argentina complicate operations in the country.
Since 2019, the Argentine peso has been kept artificially strong by strict capital controls that create a large gap between the official exchange rate and parallel rates.
KEY QUOTES
“It’s a difficult environment for foreign investors because of exchange controls. But if you’re a national and you’re interested in agricultural retailing, it’s a different story because you can keep the pesos in Argentina,” Mr. Seitz said.
“Argentina is not a big enough component of our overall revenue stream for us to have these kinds of headaches, and it’s also taking up a lot of management time. We have better opportunities to be seized in our main geographical areas”.
CONTEXT
Nutrien’s decision to sell the assets comes as its nearby Brazil operations face management turnover.
Fertilizer makers have faced volatility since Russia’s invasion of Ukraine sent prices soaring in 2022, only to collapse the following year as farmers suspended purchases and supply has stabilized.
BY THE NUMBERS
Argentina, Chile and Uruguay account for 3% of Nutrien’s global retail sales, Chief Financial Officer Pedro Farah said on a quarterly call.
NEXT STEP
The company follows a typical sales process, Seitz said, with a data room for potential buyers who sign nondisclosure agreements. He declined to say what price Nutrien is seeking.
Nutrien has no timetable for closing the sale, Mr. Farah said.
