ICL completes investment for 15% of China's Yunnan Yuntianhua

18 January 2016
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Tel Aviv, Israel, January 15, 2016 – ICL (NYSE and TASE: ICL), a global manufacturer of products based on specialty minerals that fulfill essential needs of the world’s growing population in the agriculture, food and engineered materials markets, announced that it completed a 15% equity investment in Yunnan Yuntianhua Co., Ltd. (“YTH”), the parent company of ICL’s phosphates joint venture partner in China, Yunnan Phosphate Chemicals Group Corporation Ltd. (“YPC”). YPC is China’s leading phosphate producer.

YTH, a Shanghai Stock Exchange listed company (CH:600096), issued ICL 199,249,088 new shares of YTH through a private placement for 8.24 RMB/share. The investment was approved by China’s Ministry of Commerce and its Securities Regulatory Commission.

As strategic investors in YTH, ICL will nominate 2 out of 11 YTH board members, one of whom will be Stefan Borgas, ICL’s President & CEO. ICL’s representation on YTH’s board, as well as on a phosphate business committee to be established to provide advice and make recommendations related to YTH’s phosphate business, and ICL’s right to appoint a deputy general manager for each of YTH and two of its subsidiaries, is expected to permit ICL to have oversight over these businesses and to
contribute to their growth and profitability.

ICL’s investment in YTH is part of the formation of a phosphate joint venture by ICL and YTH (the “YPH JV”) and will deepen their strategic alliance. ICL takes the lead in managing the operation of YPH JV’s business which has become a fully operating business unit of ICL, and whose results will be consolidated into ICL’s financial reports. The JV is expected to provide ICL with a platform to penetrate growing Asian specialty phosphate markets.

Over the next five years ICL and YTH plan to build specialty plants and triple the JV’s white phosphoric acid (WPA) capacity. The partners have also established a phosphate R&D platform in Kunming (Yunnan province) which is focused on developing next-generation phosphate-based products and process technologies for the YPH JV and their respective businesses.

Commenting on the financial transaction, ICL’s CEO, Stefan Borgas, stated, “We are pleased to finalize our strategic investment in YTH which is a key element of our strategic alliance with Yunnan Yuntianhua. This investment deepens our strong working relationship with YTH, and we believe that our representation on several YTH governing bodies will help facilitate our efficient management of the YPH JV.”

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