IRISH Fertilizer Industries was looking to expand its business through substantial acquisitions, chairman Mr Niall Welch said yesterday while announcing record sales and profits for the company last year.
IFI, Ireland's largest bulk chemicals producer and only primary manufacturer of agricultural fertilisers, announced pre-tax profits of £39.3 million for the year to the end of September 1995, up from £25.9 million in 1994. The increase came mostly from a recovery in fertiliser prices in Europe and improved manufacturing efficiency.
IFI's two shareholders, ICI and the semi state Nitrigin Eireann Teo (NET), will share the dividend payment of £7.4 million. On top of that, ICI received a fee of around £1 million while NET benefits from a State subsidy on gas which it then sells on to IFI at market rates.
Managing director, Mr Tom Jago said the company was on target to reach the same level of profitability this year. He also insisted there were "absolutely no plans" to sell the company.
Turnover increased 22 per cent from £136.1 million to £165.6 million, due mainly to higher prices in European markets.
European measures stopping eastern European companies dumping fertiliser at artificially low prices and a cut in the level of set aside have forced farmers to increase their use of fertiliser. However usage is still around 35 per cent lower than 10 years ago in real terms. Mr Jago said he expected prices to remain stable or "even come down a touch" over the next three to five years.
Around 30 per cent of the company's fertiliser production is now exported to European markets. Total volume sales of fertilisers increased 4.6 per cent to 1.3 million tonnes, putting IFI among the 10 largest producers in Europe. Productivity has risen to 2,200 tonnes per employee last year.
The company has also eliminated borrowing and is generating a cash flow of around £25 million. Much of that could be used to grow the company through acquisition, Mr Jago said.
"We will be seeking opportunities to do other things," Mr Jago said. He added that there "must be opportunities"in the agricultural sector, using its distribution channels. Also, the company would be looking for opportunities in chemical production, he added.
IFI has up to £15 million to spend on expanding its businesses. "We are the only European company which is only in fertilisers, Mr Welch said. "That means there is no balance for the cyclical nature of the business.
Last year the company started a co-operative development with Rochester Midland Industries, although Mr Welch stressed that was "very small". It also has an arrangement with Norway's Dyno Industries for manufacturing resin. Further opportunities along those lines would be welcome, he said.
