Saudi Arabian Fertilizer Company (SAFCO) is looking into buying out Saudi Basic Industries Corporation’s (Sabic) stake in a joint-venture fertiliser producer based in Al-Jubail.

Chemicals giant Sabic said in a note on the Saudi Stock Exchange (Tadawul) it intends to study the economic feasibility of divesting its stake in National Chemical Fertilizer Company (Ibn Al-Baytar).

“This study comes in light of the ongoing methodology for Sabic in the evaluation of investments and the study of new investment opportunities as to enable it to achieve its strategic goals,” Sabic said in a statement translated from Arabic.

Ibn Al-Baytar, a 50:50 joint venture of Sabic and Safco, was established in 1985 and produces ammonia, urea, compound fertiliser, phosphate and liquid fertiliser. According to Sabic, Ibn Al-Baytar has a capital value of 494.7 million Saudi riyals ($131.9m).

Sabic, the Middle East’s largest chemicals producer, currently holds 43 per cent of the shares in Safco with the remainder held by the private sector and publically listed.

Ibn Al-Baytar’s profits were hit in 2015 by lower selling prices for fertiliser products.

In Safco’s financial results for 2015 it gave as reasons for the 33 per cent drop in net profit “lower selling prices for the company’s products and the declining of the company’s share of profits from Ibn Al-Baytar”.