Saudi fertilizer industry set for diversification era

Saudi fertilizer industry set for diversification era
Updated 24 July 2014

Saudi fertilizer industry set for diversification era

Saudi fertilizer industry set for diversification era

The Saudi fertilizer industry leads regional production and is set to usher in a period of strong growth and diversification, according to Abdulwahab Al-Sadoun, secretary general of the Gulf Petrochemicals & Chemicals Association (GPCA).
“Fertilizer production from the Kingdom accounts for 40 percent of total capacity in the GCC region,” said Al-Sadoun. “Saudi Arabia has built up this industry from the ground over the last four decades, transforming it into a multi-billion dollar sector that not only earns valuable revenues, but also employs thousands of people.”
With a capacity of 17.1 million tons, Saudi Arabia dominates the GCC fertilizer industry, according to the GPCA’s 2013 GCC Fertilizer Industry Indicators. In 2013, fertilizer capacity in the Gulf reached 42.7 million tons, a 4 percent increase from the previous year. The global fertilizer industry, meanwhile, grew by just 1.7 percent in the same period.
According to the report, nitrogen based fertilizers like ammonia and urea dominate production capacity. However, infrastructural developments in the Kingdom are geared toward product diversification.
Projects like the $7 billion Maaden’s Waad Al-Shamal city, expected to begin production at the end of 2016, will tap into Saudi Arabia’s large phosphate rock reserves to produce up to 2.3 million tons of diammonium phosphate (DAP) fertilizers.
As the region’s fertilizer industry is export oriented, with nearly half of all products destined for overseas markets, diversification will prove advantageous.
“The emergence of locally produced DAP fertilizers represents an opportunity to enter new markets in Asia for Saudi fertilizer producers, which have a high demand for this nutrient,” Al-Sadoun added.
The 2013 GCC Fertilizer Industry Indicators, a statistical report prepared by GPCA will be released at the GPCA’s Fertilizer Convention in Dubai from Sept. 16-18.
Now in its fifth edition, the annual conference will provide delegates with an in-depth supply and demand analysis from major markets around the globe, thought leadership from industry experts, and project case studies from the Gulf region and beyond.