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GCC fertiliser industry 'must diversify portfolio'

Manama, September 18, 2013

The fertiliser manufacturers in the GCC region must diversify their portfolios to withstand future oil and gas feedstock challenges, said a top industry official.

"GCC producers must diversify their fertiliser portfolio to include more phosphate fertilisers, as this will decrease their reliance on hydrocarbon feedstock and grow their share of export markets," remarked Dr Abdulwahab Al Sadoun, the secretary-general of The Gulf Petrochemicals and Chemicals Association (GPCA).

He pointed out that with the demand for power and water desalination in the GCC on the rise, hydrocarbon reserves were becoming more expensive for the region's fertiliser producers.

"Phosphate fertilisers require less natural gas to produce and are a relatively untapped resource in this region," he stated.

The continued evolution of the GCC's fertiliser industry has been enabled by the abundant supply of favourably priced natural gas, said Dr Sadoun.

According to GPCA data, nitrogen fertilisers like ammonia and urea are manufactured by a hydrocarbon intensive process and currently make up the bulk of the region's fertiliser portfolio.

Output is expected to increase to an estimated 13 million tonnes of ammonia and 16.5m tonnes of urea by 2020, it stated.

Dr Sadoun pointed out that the share of phosphates currently makes up a fraction of the region's fertiliser portfolio, with a production capacity of just 3.4 million tonnes.

Phosphate fertilisers will reach 5.5 million tonnes of capacity by the end of this decade.

More than half of the fertilisers produced in the GCC are exported abroad, resulting in valuable revenues for the Gulf countries.

Last year alone, over 7 million tonnes of GCC fertilisers were exported to markets in Asia, making it the largest export market for regional producers.

"With analysts predicting that Asian markets currently account for nearly 60 per cent of global phosphate demand, strategic additions in phosphate capacity here in the Gulf will solidify the favourable position that GCC fertiliser producers currently enjoy," added Dr Sadoun.

However, the GPCA also forecasts that export trade flows may be impacted in the long term as cheaper hydrocarbons become available to competitors due to the expansion of shale gas production in North America.

GCC fertilisers remain optimistic with expansion continuing apace, reports the GPCA.

In order to find solutions to the challenges facing the region's fertiliser industry, GPCA will host the fourth Fertiliser Convention from September 22 to 24 on the theme 'Facing Current and Future GCC Fertiliser Challenges'.

The keynote address will be delivered by International Fertiliser Industry Association director-general Charlotte Hebebrand, who will provide insights into the global outlook for fertilisers and its impact on the GCC.

"At the convention, delegates are encouraged to explore and debate issues that are globally relevant in order to find solutions that are locally viable, in order to grow their share of worldwide fertiliser markets," said Dr Sadoun.-TradeArabia News Service
 




Tags: Gulf | petrochemicals | fertilizers |

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