FHER3

Fertilizantes Heringer S.A., traded on B3 under the ticker FHER3, is a Brazilian company with a long track record in the agribusiness inputs sector. Founded in 1968 in the city of Manhuaçu, in the state of Minas Gerais, it began its activities supplying fertilizers mainly to coffee growers in the eastern region of the state. Over the following decades, it expanded its geographic footprint and product portfolio, initially reaching Espírito Santo in 1973 and the state of São Paulo in 1979, which significantly broadened its customer base. In the 1990s, the company moved forward with new blending units in Minas Gerais and created a research center focused on coffee cultivation, reinforcing its technical specialization in plant nutrition. In 2004, it was converted from a limited liability company into a corporation, received private equity investment and, in 2007, carried out its initial public offering on the Novo Mercado, consolidating its presence in the Brazilian capital markets.

Fertilizantes Heringer’s recent trajectory has been marked by important corporate and financial events. In 2008, it completed the construction of a single superphosphate (SSP) production plant in Paraná, strengthening its industrial base in phosphates. In 2012, it acquired Maxifértil Fertilizantes in Porto Alegre (RS) and, in 2013, started operations in Cubatão (SP) through an outsourced unit, in addition to incorporating Logfert Transportes. As of 2019, the company entered into judicial reorganization proceedings, which were ratified in 2020 and closed in 2022 after fulfillment of the obligations set out in the approved plan. In parallel, there was a change in control: in 2021, a contract was signed to sell control to EuroChem Comércio de Produtos Químicos Ltda., a transaction that obtained CADE approval in 2022. EuroChem consolidated its position with a tender offer in 2023, coming to hold most of the shares, while a minority stake remained in free float on B3, maintaining the company’s category A issuer registration.

Fertilizantes Heringer’s business model focuses on the production, formulation, sale and distribution of fertilizers for agribusiness. The company mainly operates with basic fertilizers, NPK blends and special fertilizers, including a line of premium products developed in-house. Basic fertilizers include raw materials such as urea, potassium chloride, ammonium sulfate, single superphosphate (SSP), triple superphosphate (TSP), MAP and DAP, which can be sold directly or used as inputs in blends. NPK formulas result from the physical blending of basic fertilizers according to customer-defined specifications, while special and premium fertilizers are formulated to meet the specific needs of various crops, with a focus on plant nutrition and agricultural productivity. These products are sold to farmers, agribusiness companies, dealers, cooperatives and trading companies, with all fertilizers duly registered with the Ministry of Agriculture and Livestock (MAPA), in compliance with current regulations.

The company’s operational structure is organized into two segments: industrial and blending units. The industrial segment comprises the sulfuric acid and single superphosphate (SSP) production plant located in Paranaguá (PR), currently in hibernation, which historically added value along the phosphate chain. The blending segment, which accounts for all of the company’s recent operating revenue, is made up of 12 active units, one storage unit and two hibernated units. In 2024, consolidated net revenue reached around R$ 4.61 billion, fully attributable to the blending segment, while the industrial segment had only residual financial participation. The blending operation consists of a simple physical mixing process of raw materials, resulting in fertilizers with granulation dependent on the inputs used, accompanied by physical and chemical analyses carried out in the company’s own laboratory, certified by ANDA, at the Paulínia (SP) unit.

With regard to geographic and logistics footprint, Fertilizantes Heringer maintains its headquarters in Paulínia (SP) and a network of units that comprehensively serves Brazil’s South, Southeast, Center-West and Northeast regions. In 2024, the company operated storage, blending and distribution units in Viana (ES), Manhuaçu, Iguatama and Três Corações (MG), Candeias (BA), Ourinhos, Paulínia 1 and Paulínia 2 (SP), Rio Verde (GO), Rio Grande (RS), Dourados (MS) and Rosário do Catete (SE), in addition to a storage unit in Catalão (GO) and hibernated units in Porto Alegre (RS) and Paranaguá (PR). In October 2024, the Dourados and Rosário do Catete units were hibernated as part of asset optimization efforts, and the Catalão unit began operating exclusively as a storage site. Distribution is carried out predominantly via outsourced road transport, using sales channels operated by the company’s own technical commercial team, representatives and regional dealers, which enables broad reach in product delivery.

Heringer’s commercial performance is directly linked to the Brazilian NPK fertilizer market. According to 2024 data, total fertilizer deliveries in the country amounted to approximately 45.7 million tons of NPK, of which the company accounted for around 2.09 million tons distributed across the Center-West, Northeast, North, Southeast and South regions. The company does not have material concentration in any single customer, with no buyer responsible for more than 10% of annual net revenue. Demand for its products is seasonal, reflecting the agricultural calendar, with greater concentration in the second half of the year, influenced particularly by the company’s strong presence in the Southeast, a region in which fertilizer consumption intensifies in the second half. In 2024, there was a slight postponement of deliveries between halves of the year due to producers’ more cautious stance in making purchasing decisions.

The competitive environment in which Fertilizantes Heringer operates is characterized by a high level of competition, with strong price pressure and influence from the international raw materials market. More than 80% of the raw materials used are imported, with costs directly linked to global quotations for inputs such as urea, MAP and potassium chloride, as well as fluctuations in international and domestic logistics. This volatility can affect producers’ purchasing behavior, leading to postponement or cancellation of orders and impacting the company’s profitability. On the other hand, Heringer operates with proprietary technology in its blending units and maintains a seasonal workforce adjusted to the agricultural calendar, which helps align operational capacity with demand. The company also invests in associated technical services, such as programs to encourage soil analysis, technical lectures, pre- and post-sales support and specialized guidance on crop nutrition.

From a regulatory standpoint, Fertilizantes Heringer’s operations are subject to a broad set of legal and environmental requirements. At the sectoral level, MAPA requires registration of facilities to authorize the import, export, production and commercialization of fertilizers, as well as the individual registration of each product. In the environmental field, the company undergoes a three-stage licensing process – Preliminary License, Installation License and Operating License – in addition to federal technical registration with IBAMA and the obtainment of municipal permits, fire department authorizations and licenses for the use of chemicals controlled by the Civil and Federal Police and the Army, especially in the case of inputs such as ammonium nitrate. The company maintains an Integrated Management System (SGI) to monitor environmental obligations, conducts periodic monitoring of water, effluents, atmospheric emissions and noise, and manages waste from generation to final disposal, contracting accredited laboratories and specialized consultants.

In terms of environmental, social and governance practices, Fertilizantes Heringer states that it is committed to conducting its activities in an environmentally and socially responsible manner, prioritizing environmental and social management, continuous process improvement and promoting the health and safety of workers and surrounding communities. The company carries out community engagement actions, such as lectures and socio-environmental initiatives, and seeks to systematically minimize health and environmental risks arising from its industrial and commercial operations. However, it does not currently publish an annual sustainability report or a specific ESG document, does not formally adopt a materiality matrix, does not have public ESG key performance indicators and does not conduct a greenhouse gas emissions inventory. The company is also subject to the General Data Protection Law (LGPD) and oversight by the National Data Protection Authority (ANPD), which introduces additional obligations regarding information security and governance of personal data in its administrative and commercial operations.

Fertilizantes Heringer currently generates 100% of its net revenue in Brazil, with its activities concentrated in the domestic market for fertilizers and agricultural inputs. Common shares FHER3 remain listed on B3, even though under the indirect control of EuroChem, and represent a company with a significant history in supplying nutrients for different agricultural crops, focused on formulated and specialty products intended for multiple producing regions across the country.