Olam in US$1.3b Gabon fertiliser project

SINGAPORE - Singapore-based commodity firm Olam International Ltd said on Saturday it will set up a US$1.3 billion ammonia-urea fertiliser complex in the central African nation of Gabon.

The project is a joint venture with the Government of Gabon, in which Olam will own an 80 per cent stake.

Olam said in a statement the complex should commence operations by the first half of 2014 and run at a full capacity of 2,200 metric tonnes of ammonia and 3,850 metric tonnes of urea per day by the fiscal year of 2015, producing a total of 1.3 million metric tonnes of urea per annum.

'The investment will be financed on a debt/equity ratio of 65:35. The debt portion estimated at US$845 million is expected to be entirely funded through non-recourse debt financing at competitive terms,' the company said.

'Olam's share of the equity investment is estimated to be US$364 million, to be phased across the three-year development and construction period.'

Olam will either self-fund its portion of equity or partly sell down the investment through a partial sale to strategic or financial investors, it said.

Separately, Olam also said it has entered into another joint venture with the Gabon government to set up a 300,000 hectares palm oil plantation which will require an investment of US$236 million over seven years.

Olam, which has 70 per cent stake in the palm oil joint venture, said planting will start in 2012 and is targeted to be completed in 2016.

The company's shares have risen by 22 per cent since the start of the year, outpacing a 12 per cent increase in the benchmark Singapore index STI . -- REUTERS