The ADNOC and the OCI form the regional and global center of fertilizer export

The national oil company of Abu Dhabi (ADNOC) and OCI, based in the Netherlands, producer and distributor of fertilizers and natural gas-based chemicals, join forces, announced Monday the two companies .

The new joint venture will create the world's largest nitrogen fertilizer exporter, as well as the largest producer in the Middle East and North Africa.

Speaking to CNBC's Hadley Gamble in Abu Dhabi, OCI CEO and Egyptian billionaire Nbadef Sawiris said that consolidation was a key strategy for improving returns.

"This is an industry that is not very proud of not being able to get a high single-digit ROI We need to do something to improve returns and consolidate our different manufacturing platforms, pool them and be able to serving our customers in several geographic areas, "he said.

The joint venture aims to increase the market share of companies and the diversity of its production channels in the Middle East and Africa.

"ADNOC is very well positioned to serve the Asian market, our badets in Egypt are well positioned to serve East Africa and Eastern Europe .Our badets in Algeria are incredibly close to the markets of Western Europe and Latin America "CEO added. "Thus, this platform will be unique in terms of the ability to deliver products to our customers in a timely and cost-effective manner in terms of reducing transportation costs."

The entity will have a production capacity of 5 million tons of urea and 1.5 million tons of salable ammonia, according to a press release from ADNOC, which indicated income $ 1.74 billion for the combined entity, based on pro forma figures for 2018.

OCI and ADNOC will hold respectively 58% and 42% of the joint venture, which will be based in Abu Dhabi and registered with the global market of Abu Dhabi.

This transaction is the last step in ADNOC's strategy to expand its downstream portfolio. The company has signed several new partnerships in the petrochemical sector this year, in particular with the Austrian companies OMV and Borealis in March. It also sold equity interests in its refining units to international companies and signed pipeline infrastructure contracts with institutional investors in the United States.

Sultan Ahmed Al Jaber, CEO of the ADNOC Group and Minister of State of the United Arab Emirates, said in a statement: "The pooling of our badets and capabilities is a valuation step for both companies, allowing us to to surpbad our competitors to become the world's leading nitrogen export platform, and also allow us to access new markets for both existing and new customers. "