GCC fertilizer production capacity to rise 47% by 2018

The production capacity of the GCC’s fertilizer industry is set to rise 47 per cent to 46.4 million tons by 2018, due to USD10 billion worth of projects in the pipeline, according to estimates from the Gulf Petrochemicals and Chemicals Association (GPCA).

In 2012, GPCA estimated that the GCC fertilizer production capacity was 31.4 million tons.

Demand for gas is soaring across the GCC as it is widely used to generate electricity. Both the UAE and Oman have key LNG import contracts, which help the development of the region’s downstream industry.

Gas production is also increasing in Qatar and Saudi Arabia, further bolstering GCC fertilizer production. The region’s fertilizer capacity is expected to grow at an average of 10 per cent over the next five years. In comparison, the global fertilizer demand will grow just 1.8 per cent every year by 2017.

However, Dr. Abdulwahab Al Sadoun, Secretary General of GPCA, advised that environmental conservation and social responsibility will be key elements to consider while fertilizer companies strive to maximise profits. Several regional producers have already implemented strategies to reduce greenhouse gas emissions, recover carbon dioxide and reduce water consumption.

"Faced with constraints in the supply of natural gas, the GCC fertilizer industry is actively pursuing a number of projects to optimise energy and water resources, as well as the conservation of natural resources," said Abdulwahab Al Sadoun, Secretary General of GPCA, on the final day of the 4th Annual GPCA Fertilizer Convention.
This year’s convention comprised 24 commercial and technical presentations and 25 industry experts speaking on key topics affecting the GCC, the Americas, China, India and Africa. The GCC’s fertilizer industry is a cost leader and must continue to improve its cost-leadership in order to retain its global competitiveness, Dr. Al Sadoun added.

The number of delegates attending the convention rose to 294 this year, a 43 per cent rise on delegate numbers at the same event in 2012, reflecting the increasing interest in the region’s fertilizer market. The vast majority of delegates were producers, suppliers and distributors.

"I am delighted with the high level of support and interest shown in this key event. The growth in delegate numbers is testament to the increasing importance of the GCC’s fertilizer industry and the challenges it faces going forward," Al Sadoun said.

As the GCC continues to pursue its renewable energy targets, analysts have predicted that the region’s fertilizer industry will gain a competitive edge by providing an alternative solution to feedstock challenges.

"Diversification of the energy mix towards renewables leaves hydrocarbons free for petrochemicals.  Currently, power generation takes up a lot of gas demand but if renewable technologies are introduced into the GCC, this might help the petrochemicals and fertilizer industries as it gives them access to feedstock," said Kevin Breen, a consultant at CRU.

During the convention, GPCA issued the co-branded report, Global Fertilizer Trends - Opportunities and Challenges for GCC Fertilizer Producers, in collaboration with Nexant. The report covers topics such as fertilizer feedstock dynamics, consumption trends and fertilizer supply and trade.


 

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