Nutrien takes first Brazilian steps with purchase

Canadian fertilizer producer Nutrien's acquisition of Brazilian agricultural retailer Agrosema this week is the first step in advancing ambitious plans to expand operations in the country.

Nutrien is a significant potash supplier in Brazil, providing around 25pc of MOP imports, but it has less than 1pc of the distribution market. Nutrien chief executive Chuck Magro said previously that 30pc of market share is an ideal starting point for a relevant participation in the Brazilian distribution.

Nutrien — formed in 2016 from the merger of Canadian firms Agrium and Potash — combines production of potassium, nitrogen and phosphates with a distribution business that is strong in North America. But in Brazil Nutrien still has a gap to fill in distribution.

Last year Nutrien said it would invest $1bn in Brazil over five years. Agrosema, with annual sales of about $60mn and a sizeable presence in Southern Brazil, is the first acquisition in the country after the investment announcement.

Agrosema is just a small step toward helping Nutrien reach the 30pc market share goal. The company is also investing in organic growth as it builds four distribution units — one in Minas Gerais state and three in Goias state. If Nutrien wants to speed the growth with more acquisitions, it will probably look for a more prominent retailer or blender in Brazil.

In 2018 Nutrien was widely thought to be negotiating to buy the 90.5pc of Heringer it did not already own, but could not settle on a price. The companies never publicly confirmed any discussion, but sources said Nutrien lost interest when Heringer entered into a reorganization plan in Sao Paulo bankruptcy court.

By Kauanna Navarro