WITTENBERG: As Iran’s closure of the Strait of Hormuz roils the global economy, one German town has been scrambling to help make up the shortfall in essential supplies of fertilizers.
Wittenberg is home to a chemical plant founded in 1915, in the midst of WWI.
At that time, the aim was to produce nitrogen for explosives and fertilizers to circumvent a blockade which prevented certain raw materials from being imported from Chile.
SPEEDREAD
The World Trade Organization has warned that the closure of the Strait of Hormuz threatens global food security.
More than a century later, the closure of the Strait of Hormuz “shows that it’s still the same thing today — sea routes can collapse,” Christopher Profitlich, spokesman for the SKW company, which took over the site in 1993, said.
A third of the world’s fertilizers normally pass through the Strait of Hormuz and the World Trade Organization has warned that the blockade there threatens global food security, particularly in Africa and South Asia.
“That’s why it makes so much sense to have production in Europe,” Profitlich said.
At SKW’s sprawling 220-hectare site, a 23-kilometer rail network transports urea, ammonia and finished fertilizers, destined for sites across Germany and elsewhere in Europe.
SKW is Germany’s largest producer of urea, an essential component of fertilizers. In one of its warehouses, a mountain of acrid-smelling white powder rises several meters high.
The plant has been running at full capacity to try to make up the shortfall in supply from the Hormuz blockade.
The company expects an increase in revenue this year of between 10 and 20 percent, but stresses this estimate remains uncertain because of market volatility.
SKW’s CEO Carsten Franzke says that the company is not a “war profiteer” and will probably just break even once soaring energy costs are also taken into account.
