Singapore’s Olam to build $1.3-bn fertiliser plant in Gabon

Leading global commodity trader Olam International Limited disclosed on Saturday that it has formed a joint venture with the government of Gabon to build a port-based ammonia-urea fertiliser complex in the West African nation with a total investment $1.3 billion.

Under the agreement, Olam will invest in 80-per cent of the equity of the JV, while Gabon will invest in the remaining 20 per cent. The equity component of the project has been indicated at around 35 per cent at approximately $450 million, and the balance $850 million will be met through debt.

Olam has also signed a 25-year competitive natural gas fixed-price contract with Gabon, securing the supply of natural gas for the urea plant.

Singapore-based Olam is a leading global supply chain manager and processor of agricultural products. Its business includes plantations, farming, supply chain, processing, and contract manufacturing. The company has leading positions in cocoa, coffee, cashew, sesame, rice, cotton, and wood products, and has over 11,000 customers in 64 countries worldwide.

The Gabon government will grant a 10-year tax holiday for the proposed plant, followed by a 10-per cent concessional tax rate thereafter. The project will also enjoy zero customs duty and VAT for its entire lifetime.

Gabon's president, Ali Bongo Ondimba, who was in Singapore on a state visit said, ''We are excited about the prospects of partnering with Olam, one of the world's leading agri-commodity companies, to build one of the most competitive fertiliser businesses in the world in Gabon.''