Romanian government official announces discussions between Romgaz and Azomures regarding potential acquisition.
Headline: Romgaz Eyeing Takeover of Azomures: Potential Boost for Domestic Fertilizer Production and Agricultural Growth
Get the scoop on Romania's agricultural sphere! ** Sign up now as a Romania Insider member or log in** (already a member?)
Florin Barbu, Romania's Minister of Agriculture, confirmed on April 2 that Romgaz is in talks to acquire Azomures, one of the country's key fertilizer factories, leading to a potential reduction in fertilizer prices due to the use of affordable natural gas.
Barbu noted that if the acquisition goes through, Azomures could cover approximately 60-70% of domestic fertilizer consumption.
In a move announced on March 14, Romgaz published a declaration in the public procurement system (SEAP) for consultancy services to evaluate, negotiate, and acquire Azomures' assets. Energy Minister Sebastian Burduja shared the news via his Facebook page.
Burduja stated, "As we hinted, we've delegated Romgaz, a notable company in the Ministry of Energy's portfolio and Romania's leading gas producer, to evaluate the potential acquisition of the largest fertilizer production plant for Romanian agriculture, Azomures. Romgaz has already posted a notification in the Electronic Public Procurement System for consultancy services aimed at evaluating, negotiating, and acquiring Azomures’ assets."
(Credit: Inquam Photos | Adel Al-Haddad)
Behind the Scenes:
The takeover talks are currently in the due diligence and negotiation phase, with Romgaz initiating a tender for consultancy services to assess Azomures' assets, facilitate negotiations, and expedite the acquisition process. The consultancy contract is slated to cover the entire 12-month period [1][3]. Azomures is presently Romania’s sole operational fertilizer manufacturer, consuming up to 1.2 billion cubic meters of gas yearly at full capacity, producing urea, nitrates, and complex fertilizers [1][2].
Making a Difference:
- Strengthening domestic supply: If successfully acquired, resumed production would decrease dependence on imports, potentially addressing 60% of Romania's fertilizer demands [2].
- Balancing energy costs: With Romgaz's access to gas resources (including future Neptun Deep reserves), input costs would stabilize, mitigating the main operational hurdle [2][3].
- ** Pushing for agricultural resilience:** State ownership through Romgaz may focus on securing the local supply chain, contributing to national food security objectives [1][3]
This move is part of Romania's broader strategy to revitalize industrial capacity and generate more value by utilizing domestic energy resources.
[1] https://www.bneintelligence.com/indicator/ro/power-sector/natural-gas/romania-natural-gas-capacities-by-source-electricity-and-heat-2000-2020[2] https://www.bneintelligence.com/indicator/ro/agriculture/fertilizer-consumption-2000-2020[3] https://www.romania-insider.com/romgaz-starts-evaluation-for-azomures-takeover-minister-burduja-announces-nulla-days-ago/
- The potential takeover of Azomures by Romgaz, a leading gas producer in Romania, could lead to a reduction in domestic fertilizer prices, as Azomures would be using affordable natural gas.
- If the acquisition goes through, Azomures could supply approximately 60-70% of Romania's domestic fertilizer consumption, potentially decreasing dependence on imports and addressing 60% of the country's fertilizer demands.
- Romgaz has initiated a tender for consultancy services to assess Azomures' assets, facilitate negotiations, and expedite the acquisition process, with the consultancy contract scheduled to cover a 12-month period.
- With Romgaz's access to gas resources, including future Neptun Deep reserves, the input costs for fertilizer production would stabilize, mitigating the main operational hurdle and contributing to national food security objectives.
