Ridley Acquires Incitech Pivot In Landmark Deal
In a major move for the feed and stock industry, Ridley Corporation has acquired 100 per cent of the Incitec Pivot Fertiliser distribution business from Dyno Nobel for A$300 million.
Ridley Corporation is a major manufacturer of stock feed and supplements, providing vertically integrated nutrition solutions for Australia’s agricultural industries. The acquisition of Incitech Pivot Fertiliser (IPF) empowers Ridley with a controlling stake in the national supply of stock feed and fertiliser.
Not included in the acquisition are Dyno Nobel’s fertiliser manufacturing operations at Phosphate Hill and the obligations for the closure and remediation of the Gibson Island and Geelong properties.
Adding Australia’s number one fertiliser distributor to their portfolio greatly expands Ridley’s market-leading positions in the provision of animal nutrition products and services. IPF holds 46 per cent share of the east coast market, distributing 2.2 million tonnes of material in the 12 months up to 30 September last year.
“The opportunity arises following Ridley’s strong financial performance over recent years and represents a further opportunity to invest in the continued growth of Australian agriculture,” Ridley chairman Mick McMahon says.
“The Ridley and Incitec Pivot brands and distribution networks share a rich heritage at the heart of Australian agriculture and our regional communities, and the proposed combination will only strengthen this for the benefit of our customers, communities, employees and investors.”
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This will ultimately grant Ridley a competitive advantage, which may raise concerns for smaller producers. As a vertically integrated company, Ridley controls every aspect of their operations, from procurement of raw material to processing, production, and distribution.
Australia’s largest supplier of fertiliser, Incitech Pivot was formed in 2003 through a merger of Incitech Fertilisers and the Pivot Group, which originated as a Victorian farmer’s co-operative in 1919. Additional mergers with Southern Cross Fertilisers in 2006 and Dyno Nobel in 2008
The addition of Incitech Pivot strengthens Ridley’s position beyond agriculture. Market dominance in volatile material such as ammonium nitrate make IPF the largest supplier of explosives products and services in North America, and the second largest supplier of explosives products and services in the world.
The acquisition of IPF by Ridley has secured an enviable forward post in the supply and distribution of stock feed and fertiliser, with significant impacts on the industry. It signals a dynamic shift from domestic manufacturing to an import model, making Australia reliant on foreign producers for food security. On the upside, the move is expected to increase competition in the sector as customers diversify their sources of feed and fertiliser.
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