According to recent reports Israel Chemicals Ltd. has signed a memorandum of understanding with Duc Giang, a leading Vietnamese chemicals company. Under the terms of the agreement the two companies will jointly mine phosphates to meet the demand of both local and Southeast Asia markets.
Israel Chemicals CEO Stefan Borgas / Photo Moshe Shai
/ By Gali Raz /
ICL (TASE:ICL) Israel Chemicals , will be making a considerably larger footprint in Southeast Asia as part of their Next Step Forward strategy through their working arrangement with Duc Giang, in which the two companies will not only to remove considerable quantities of phosphates from beneath the earth’s surface but also construct a series of phosphates processing plants to handle the material extracted.
According to a representative of Israel Chemicals the recently signed agreement is an integral part of the company’s global expansion plan which will see it gradually expand and diversify its mining sources outside of Israel, and in the process broadening its global phosphate mining operations.
Behind the agreement is the company’s policy to create a growth engine for its three primary markets, particularly agriculture, food processing and engineered materials.
On the announcement of the signing a spokesperson for Israel Chemicals confessed that building the platform in Vietnam is not solely intended act as a replacement for Israel Chemicals’ activities in Israel, but instead to strengthen its overall foothold in the global phosphate markets globally, with particular emphasis being placed on increasing market coverage within Asia.
“The new joint enterprise may also be called upon to supply several Israel Chemicals customers and plants currently served by the company’s existing Israeli platform.” The spokesperson summed up.
Israel Chemicals’ main phosphate mine, situated in the Negev is reported to be nearing exhaustion, and the company has reportedly been considerably frustrated by their failure to move forward with their plans to develop a new mine, also in the Negev at Sde Barir. The plans have apparently been considerably delayed as a result of resistance, both from local residents as well as the Israel Ministry of Health.
With the offset of their new agreement Israel Chemicals and Duc Giang are reported to still be evaluating an additional series of joint activities in order to expand their phosphate mining in Vietnam as well as future plans to eventually manufacture phosphate products for the region.
Both companies have stated their belief that their successful cooperation will only go to serve as a strong basis for further expansion as well as intensification of cooperation between the two companies, not just in Vietnam but also throughout Southeast Asia.