LONDON (ICIS)–Saudi Arabian Mining Company (Ma’aden) will diversify its fertilizer portfolio and continue to work with foreign partners on new projects as feasibility studies into another phosphates plant progress, President and CEO, Khalid bin Saleh Al-Mudaifer revealed on Monday.
In an interview with GPCA Insight – the official quarterly newsletter of the Gulf Petrochemicals and Chemicals Association – the senior executive outlined his vision for the creation of innovative crop nutrients that will help meet the nutritional needs of the world’s fast-growing population.
Ahead of his speech at the eighth edition of the GPCA Fertilizer Convention in Bahrain from 26-28 September, Al-Mudaifer hailed the recent start-up of the $7.5bn, 3m-tonne/year Wa’ad Al Shamal fertilizer complex in the kingdom.
That state-of-the-art complex is a joint venture with Saudi Arabian Basic Industries Corporation (SABIC) and US fertilizer giant Mosaic, with a similar-sized facility proposed for 2024.
“As the world population and economy are growing and driving the need for more food production, Wa’ad Al Shamal will play an important role in meeting global demands for phosphate fertilizers,” he said.
“While we grow, the need to diversify our suite of products becomes stronger … [and] we need to increase our exposure to a bigger share of phosphate fertilizers to diversify our product portfolio, meet the demands of farmers, and mitigate our risk exposure.”
While acknowledging short-term overcapacity generated by projects like Wa’ad Al Shamal and several new plants at North African rival Office Cherifien des Phosphates (OCP), Al-Mudaifer is confident the global demand/supply balance will realign around 2021.
“The industry is seeing an overcapacity situation in the short term where new capacities are concentrated within just the next three to four years, and all are export oriented.
“However, we believe there will be a market balancing toward 2021. This is why we are contemplating our third project in the 2024 timeframe.
“Key markets in South Asia and Latin America and new markets like Africa will lead to a growth rate of about 1.5% between now and 2021.
“For instance, we see that the potential for fertilizer demand on existing arable land in East Africa could double.
“In fact, the application of fertilizers in a number of undeveloped markets will support near term growth.
“Longer term, the markets will respond to the increasing crop yields required to feed an increasingly wealthy and growing global population.”
The Middle East is a leading source of nitrogen fertilizers ammonia and urea, as well as downstream crop nutrients such as diammonium phosphate (DAP).