Saudi fertilizer industry set for era of growth, diversification

Kingdom accounts for 40 percent of regional fertilizer production

24/07/2014 01:55 AST

The Saudi fertilizer industry leads regional production and is set to usher in a period of strong growth and diversification, according to Dr. 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,” he said. “Saudi Arabia has built this industry from the ground up 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 Arabian 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.

The report said nitrogen based fertilizers like ammonia and urea dominate production capacity. However, infrastructural developments in the Kingdom are geared towards product diversification.

Projects like the $7billion Ma’aden’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 further said.

The 2013 GCC Fertilizer Industry Indicators, a statistical report prepared by GPCA will be released at the GPCA’s Fertilizer Convention that will be held on Sept. 16-18, 2014 in Dubai.

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.

Saudi Gazette