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Industry Insights N1E 1, News, Nguyen Dinh Bao de Org, Jan 2022_Israel Chemicals leading chemicals and petrochemicals industry 1

Jan 24, 2021 | Industry Insights | 0 comments

Israel Chemicals leading chemicals and petrochemicals industry

Industry Insights | 0 comments

Toronto, Jan 24, 2021Israel Chemical Co., Ltd. develops, produces and sells fertilizers, metals and other special-purpose chemical products used in agriculture, food and engineering industries.The company’s refinery division is responsible for refining crude oil and producing fuel and raw materials for the plastics industry. 

The company was established in Tel Aviv in 1968 and has grown into one of the world’s largest suppliers of phosphate fertilizers, bromine and other minerals and chemical compounds.

Israel Chemicals (Israel Chemicals) is divided into three parts: fertilizer, industrial products and performance products. The fertilizer department is engaged in the production of standard, granular, fine red and white potash fertilizers from different sources, as well as the production of phosphates such as phosphate rock, phosphoric acid, fertilizers and animal feed additives. 

The industrial products sector produces flame retardants such as bromides and organophosphorus, elemental bromine and other chemicals. The High Performance Products division produces specialty phosphates, such as industrial grade, food grade and electronic grade phosphoric acid, phosphates, food additives and wildfire safety products, as well as alumina and other chemicals.

It accounts for more than 9% of the magnesium consumed in Western markets, and 60% of its output comes from the Dead Sea and the Negev Desert. Originally created to merge many state-owned mining companies, a series of acquisitions and mergers aroused people’s interest in the 70s, 80s and 90s. In 2016, annual sales reached 5.36 billion US dollars.

The leader of public chemicals in the 21st century

As another step towards full privatization, the company continued its reorganization in 1995, dividing Israel Chemicals into three main divisions: the Dead Sea Plant. The company took over the company’s Dead Sea minerals, pharmaceuticals, cosmetics and energy products. 

Dead Sea Bromine was separated from the Dead Sea plant and formed the core of a new bromine business unit that also merged Dead Sea Periclase and Rami Ceramics; and a new company, Rotem, which took over not only Rotem Amfert Negev but also Giulini Chemie and various other companies and businesses, including many international holdings of Israel Chemicals.

Israel Chemicals merger and acquisition initiatives during the 90s and 2000s

Israel Chemicals continued its acquisitions into the second half of the decade. In 1995, the company acquired ClearonCorp of the United States, which specializes in water treatment products. 

In 1996, Rotem consolidated its position in the German phosphate market by acquiring BK Ladenburg Gesellschaftfür Chemische Erzeugnisse. The company was founded in 1967 and was controlled by Hoechst AG in 1990 to produce phosphates for food additives, detergents, water treatment and other markets. 

After the acquisition, Rotem reorganized its German operations and merged BK Ladenburg with Giulini Chemie to create BK Giulini.

The Israeli company exercised its option to further acquire shares in Israel Chemicals, increasing its shareholding ratio to 41.9%. The Israeli government reduced its shares in Israel Chemicals to only 31.5%, and finally completed the privatization of the company in 1999 when it placed all its shares on the Tel Aviv Stock Exchange

The Israeli company took the opportunity to increase its stake in Israel Chemicals to 52%, defeating Canadian competitor Saskatchewan’s Potash Corporation (PCS), which had been seeking international expansion in the late 1990s.

Israel Chemicals subsidiary Dead Sea Magnesium to invest $450M in China

At that time, Israel Chemicals acquired the Spanish potash company Grupo Potasas in Barcelona, ​​Spain, and Spain’s largest potash producer through Dead Sea Works, thus surpassing PCS. The company subsequently changed its name to Iberpotash. The Dead Sea plant is also expanding to other places, investing $450 million to build a plant in China, using Israel Chemicals’ cold crystallization process, which is expected to produce 800,000 tons of potash per year. 

The Dead Sea Works (Dead Sea Works) also developed in a new direction, the establishment of Dead Sea Magnesium (Dead Sea Magnesium), and invested about 420 million US dollars to build magnesium production facilities. The company correctly guessed that the automotive industry will increasingly use magnesium alloys, which are both lighter and less harmful to the environment than traditional metals.

Beginning in 1999, Israel Chemicals began a plan to delist its publicly listed subsidiaries from its fertilizer company. The following year, Israel Chemicals acquired all the outstanding shares of Dead Sea Works, Dead Sea Bromine and Dead Sea Periclase. 

At the same time, when Israel’s largest private company, Ofer Brothers Group, acquired a controlling stake in Israel Corporation for $330 million, Israel Chemicals itself gained new ownership and defeated the PCS bid.

The expansion of Israel Chemicals continues into the next decade. In 2000, Rotem, through Rotem Amfert Negev, purchased Turkish phosphate producer Opal, which specializes in the production of products for the feed market. The subsidiary was renamed Rotem Turkey. 

At the same time, the company began to reduce many non-core businesses, including a stake in Dead Sea Laboratories, which sold cosmetics and skin care products under the Ahava brand and sold it in 2001.

Israel Chemicals lays the foundation for China’s balanced fertilizer strategy

A series of field activities organized by Israel Chemicals China for the growers of specialty crops in Guangxi Province was warmly welcomed by farmers, who had the opportunity to see the results of balanced crop nutrition and help them develop improved fertilizer strategies.

According to Li Guohua, a Chinese agronomist at Israel Chemicals, many crops such as mangoes and edible grapes ignore the role of medium and micronutrients. As a result, the yield has been reduced and the quality has been worse than expected. 

The Israel Chemicals team chose to hold activities in the field to prove that the farmers’ orchards and vineyards are more nutritious and invite growers to meet with Israel Chemicals agronomists and local agricultural experts.

For a long time, fields or demonstration days were considered beneficial to farmers. The contemporary version benefits from digital technology to invite participants, suggest what they will see and get suggestions. In addition, farmers can record content in photos and movies for later viewing, and organizers can share the output with those who cannot participate through the movies made on the day.

High-tech agreement reveals a new era for Israel Chemicals fertilizer development

Israel Chemicals has signed a cooperation agreement to use the latest sensor-based technology to test the proposed fertilizer. The agreement was reached with the Hebrew University School of Agriculture, Food and Environment, and the technology is called Plantarray.

The process is developed by Plant-DiTech, which can quickly analyze and quantify the response of plants to different fertilizers. The use of Plantarray is expected to increase accuracy and greatly reduce the timetable for developing new fertilizer solutions. The test will be conducted in the iCORE greenhouse of the Hebrew University. The most promising formulations and applications will be determined for further development and commercialization.

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