QAFCO was founded in 1969 as a joint venture between the State of Qatar, Norsk Hydro Norway, Davy Power gas , and Hambros Bank, to produce Ammonia & Urea by utilizing Qatar's abundant gas resources. The company is now owned by Industries Qatar (IQ) as 75% shareholder and Yara International as 25% shareholder.

QAFCO's inception in 1969 as a joint venture company to produce chemical fertilisers was the first and a significant step in Qatar's industrial diversification program to utilize its abundant natural gas resources.