Kemira of Finland is understood to be the international company with which Irish publicly-quoted agribusiness group IAWS has teamed up to bid for Irish Fertilizer Industries (IFI). The presence of the Finnish chemicals group adds weight to the IAWS bid, as it is a major player in the international fertiliser market.
The other bidder for the Irish group is Grand Portage, a vehicle established by Mr Declan Ganley. Ganley International, Mr Ganley's main investment vehicle, is one of the shareholders, as is a Canadian company, Grand Portage, in which Mr Ganley has a stake, while the group also has the backing of some major US banks. It is chaired by ICC chairman Mr Phil Flynn. The two shareholders in IFI - the Government (51 per cent) and British group ICI (49 per cent) - are currently examining the two bids and are likely to seek clarification on certain points from both bidders before deciding how to proceed.
Sources say that the Government is likely to be concerned about sustaining the 630 IFI jobs and the plans of an acquirer for developing the business. ICI, on the other hand, will be keen to get the highest price possible.
Grand Portage is understood to have put forward a detailed bid, putting forward plans to develop the IFI business and maintain the jobs, which are in Cork, Belfast and Arklow. The presence of heavyweight financial backing from US banks will also be a supporting factor for the bid.
IAWS has maintained a firm "no comment" stance on its interest. However, the presence of Kemira will allow it to argue that IFI could become part of an international chemicals and fertiliser group with a strong record and worldwide interests.
Kemira, based in Finland, operates in 36 countries worldwide and has almost 11,000 employees. The group had sales of €2,413 million (£1,900.39 million) last year, on which it reported pre-tax profits of €97 million, down from €145 million the previous year.
Its Kemira Agro division specialises in complex and nitrogen fertilisers, which it supplies to the agriculture, horticulture and forestry sectors. It is the largest of Kemira's four divisions, with sales last year of €1,030 million. Suffering from the poor conditions in the market last year, it made profits of just €19 million, compared to €85 million the previous year.
Kemira already has two operations in Ireland, a coating plant in Cork and a fertiliser operation in Hillsborough, Co Down.
The amounts that the bidders are offering for IFI are not known. Industry sources believe that it might fetch at most £50 million. The company had a bad year last year, recording losses of £10.6 million, suffering from a sharp fall in fertiliser prices on international markets.
Both of the bidders will need to have a secure gas supply in place, as the current IFI contract to buy gas from NET runs out at the end of this year. However, as a major purchaser of gas, the owners of IFI will be free to import gas from overseas or seek a good deal from Bord Gais.
For the State, the sale will involve a major debt write-off, as some £170 million in debts are believed to be held by NET, the vehicle which holds the State's stake in IFI.
