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GCC fertiliser production capacity surges 12pc

DUBAI, September 27, 2017

The fertiliser production capacity in the GCC region has reached 42.3 million tonnes per annum in 2017, increasing by 12 per cent over the previous year, according to a new report of the Gulf Petrochemicals and Chemicals Association (GPCA).

The industry expanded at the highest annual growth rate since 2011, and further outpaced the overall annual growth of 8 per cent per annum over the past decade, said the report entitled “2016 GCC Fertiliser Industry Indicators”, reported Wam, the Emirates official news agency.

 The capacity additions in 2017 were mainly driven by Saudi Arabia, the largest fertiliser producer in the region, with projects such as Waad Al Shamal, a $7 billion joint venture between Ma’aden, Sabic and Mosaic.

In 2016, the GCC fertiliser industry generated $5.2 billion in sales revenue, with plans to invest $8 billion in new projects over the coming years. By 2025, the regional capacity is expected to reach 49.8 million tonnes, growing at a steady rate of 2 per cent per annum. Of the additional 7.4 million tonnes of fertiliser capacity to be added between now and 2025, 95 per cent will come from Saudi Arabia, increasing the country’s share in regional fertiliser production to 58 per cent, up from the current 51 per cent.

GCC fertiliser exports have also been growing at 7.3 per cent per annum over the last decade. These exports account for about a third of the export volume of chemicals, with 90 per cent sold in the international markets.

The growth in fertiliser exports has a significant multiplier effect throughout the local economy, generating an estimated $6.7 billion from supporting indirect economic activity in the region, including support services, packaging, warehousing and distribution.

The GCC fertiliser industry has also contributed to the growth of non-oil exports, expanding the sales in international markets. The economic growth in emerging economies has been an important driver of this expansion. In 2016, GCC retained its position as the world’s largest urea exporter, with a global market share of 32 per cent, and the second largest exporter of diammonium phosphate (DAP), with a share of 14 per cent.

Dr Abdulwahab Al-Sadoun, secretary-general, GPCA, said: "Much like any other fertiliser producing region globally, the GCC fertiliser industry’s sales revenue has been affected by an overall decline in the commodity markets, dropping by an estimated 21 per cent from the year before.”

“Nonetheless, the industry has remained resilient, despite the volatility in the global markets, continuing to expand with a commitment to long-term projects, growing export volumes and significant investment in niche, high-value and environment-friendly fertiliser products. Furthermore, the contribution of the fertiliser industry to the regional progress goes much beyond the financial growth, playing an important role in supporting food security and job creation,” he added.

Employing around 54,900 people, directly and indirectly, nationals account for 54 per cent of the industry’s workforce. Over the past decade, direct job creation grew by a compound annual growth rate (CAGR) of 8.7 per cent per annum, while the chemical industry grew at an overall average rate of 6 per cent per annum.

The “2016 GCC Fertiliser Industry Indicators” report will be released at the 8th edition of the GPCA Fertiliser Convention, taking place from September 26 to 28 at the Ritz Carlton, Bahrain.




Tags: GCC | GPCA |

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