* CEO says keeping eyes on Iraq, Africa
* Requires cheap natural gas wherever expands
* Expects corn to stay below $7/bushel in 2012
* Denies CF for sale; says not in M&A business
By Ernest Scheyder
NEW YORK, Nov 2 Fertilizer producer CF
Industries Holdings Inc is eyeing expansion outside the
Western Hemisphere, possibly in the Middle East or Africa, its
chief executive said on Wednesday.
A large expansion outside CF's base of operations in the
United States could help it eclipse Norway's Yara International
ASA as the world's largest producer of nitrogen
fertilizer, the most important fertilizer farmers need to
"We always have our ear to the ground, seeking
opportunities to invest money," CF Chief Executive Steve Wilson
told Reuters. "There are possibly opportunities offshore that
could interest us."
The company has been generating large amounts of cash this
year as high corn prices give farmers an incentive to
plant more crops and use more fertilizer. Wilson expects corn
prices to stay below $7 per bushel in 2012, low enough not to
destroy corn demand, but high enough to encourage farmers to
As of Sept. 30, CF had $1.43 billion in cash. That was even
after the company bought back $800 million of its own stock
during the third quarter.
Iraq and the African continent hold the most promise for
expansion, although each has its own challenges.
"Iraq has a huge amount of untapped natural gas, but today
we don't have a security situation, infrastructure and legal
framework that's required for passive investment to put a plant
in a place," Wilson said.
Africa is "the last great, untapped marketplace," he said,
but added that CF is "not looking in that direction now, but I
would not rule something out."
Wilson's main rival, Yara CEO Jorgen Ole Haslestad, told
Reuters earlier this year he is spending $20 million to build a
port in Tanzania that will help expand a fertilizer delivery
network throughout southern Africa.
Wherever CF decides to expand must have access to cheap
natural gas, much like North America does now, Wilson said.
Natural gas is one of the key building blocks for nitrogen
"It's no secret if you look at North Africa, you see
difficulties in Egypt and Tunisia and places like that," he
said. "The notion that somehow you can magically go and secure
cheap natural gas safely and securely for 20 years is
CF, based in a Chicago suburb, has so far had a hard time
In 2008, CF said it would spend $1 billion to build a large
ammonia and urea fertilizer complex in Peru, with plans to
start production by 2013. The project was delayed due to delays
in the construction of a natural gas pipeline from Colombia.
Wilson said on Wednesday the project is now on the "back
burner" and that CF is "not spending a meaningful amount of
money" in Peru.
"We are watching what happens with the new (Peru)
government," Wilson said.
Wilson also denied CF was for sale. Haslestad, the Yara
CEO, said earlier this fall he was interested in trying to buy
an American rival.
Yara failed last year to buy Terra Industries Inc, a large
American fertilizer maker that eventually was bought by CF for
nearly $5 billion.
"We're not in the (mergers and acquisition) business
today," Wilson added.
CF shares jumped 6.7 percent to close at $169.31 on