[PRESS RELEASE] GCC fertilizer industry to see sustained growth, say industry experts at 4th GPCA Fertilizers Convention
A rapidly growing global population and planned capacity expansions are the key drivers for sustained growth for the GCC’s fertilizer producers, said industry experts on day one of the Fourth Annual GPCA Fertilizers Convention.
Organized by the Gulf Petrochemicals and Chemicals Association (GPCA), the convention’s keynote speech was delivered by Charlotte Hebebrand, Director General of the International Fertilizer Industry Association (IFA). Hebebrand said, “a key driver for fertilizer demand is an expected global population surge”.
“As global population is expected to reach 9.3 billion by 2050, food production will have to increase by 50% in the same period,” said Hebebrand. She predicts that the solution to ensuring that people are fed is not only increasing arable land but also increasing the yield of current cultivated land.
“Today, food security is not only about the quantity of food but also quality. We don’t want a ‘hidden hunger’ situation where billions of people are deficient in micronutrients. Fertilizers are able to provide both the quantity of food to feed billions of people, but also quality food that is nourishing.”
Gulf fertilizer producers are aided by their strategic location between major export markets like East Asia and the United States. “The GCC is a powerhouse in global fertilizer trade,” said Hebebrand. Last year, the region’s fertilizer products accounted for 30% of global urea and 16% of ammonia supply.
“In fact, GCC fertilizer production is set to expand, reaching a capacity of 46.4 million tons by 2018”, said Dr. Abdulwahab Al Sadoun, Secretary General of the GPCA.
“There are US$10 billion worth of projects currently in the construction or planning stage in the GCC. Because of this, we expect the region’s fertilizer industry will grow consistently in the next five years,” said Dr. Sadoun.
The GPCA estimates that the GCC’s fertilizer production capacity reached 31.4 million tons in 2012. According to the IFA, global fertilizer capacity reached 255.7 million tons in 2011, and is expected to grow by 1.8% per year in the next five years. Meanwhile, the GPCA estimates that GCC fertilizers will grow by 10% every year in the same period.
An abundant supply of natural gas and minerals has enabled fertilizer producers in the Arabian Gulf to play a major role in the supply of nitrogen-based and phosphate-based fertilizers like urea, ammonia and di-ammonium phosphate (DAP) to global markets, continued Dr. Sadoun.
While analysts have warned of a slowdown in growth due to the availability of cheaper feedstock elsewhere due to the shale gas boom, Dr. Sadoun notes that the region’s fertilizer products portfolio is already diversifying its mix to produce new grades.
“The GCC will capture a large share of the world’s phosphates trade over the next 5 years,” said Dr. Sadoun. Around 3.7 million tons of phosphates are produced in the Arabian Gulf today, accounting for 9% of global phosphate capacity. By 2018, 8.3 million tons of phosphate capacity is expected to come on stream, raising the Gulf’s share of global phosphates to 24%.
“The Middle East fertilizers producers are already evolving in a way that will ensure their longevity and competitiveness,” said Dr. Sadoun.
The fourth annual Fertilizer Convention is being held at the Intercontinental Festival City, Dubai between September 23- 24. For more information on speakers and the program, please visit www.gpcafertilizers.com