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Australia advances

Summary

Australia can no longer be viewed as a comparative backwater in world fertilizer markets, as the country has not only emerged within the past decade as a major importer of urea and DAP, but it is also developing a worldscale nitrogen and phosphate fertilizer industry, using indigenous resources. In addition to the new entrants among the domestic producers, Australia's long-established suppliers are also undergoing a radical transformation, as described in this review.

Abstract

While agriculture is a major force in the Australian economy, accounting for 24 % of the country’s total exports, the fertilizer sector has tended to make fewer waves in in­ternational markets. Fertilizer consumption has remained steady at around 2.2 million t/a nutrient (Fig. 1), with imports having long dominated the total amount of fertilizer used. According to the Fertilizer Industry Federation of Australia (FIFA), in 1999, 70 % of the nitrogen, 75 % of the phos­phorus and 100 % of the potassium used were imported. However, more recently, the Australian fertilizer industry has begun to make major strides in harnessing pre­­viously unexploited indigenous resources.

The first fruits were seen when WMC Fertilizers inaugurated its world-scale 1.2 million t/a DAP/MAP plant in Dec­ember 1999. This plant uses phosphate rock mined at Phosphate Hill, some 150 km south of Mount Isa, Que­ensland. The reserves are estimated at 104 million tonnes of phosphate rock. Before the plant was brought on stream, all of Australia’s P2O5 nutrient requirements were imported. WMC Fertilizers’ fully integrated operation is estimated to have improved Australia’s balance of payments by around A$400 million/year ($230 million) through import replacement and the export of around half the plant’s output, mainly to markets in South East Asia and South America. To promote these ex­port sales, WMC Fertilizers formed a marketing alliance with US-based Cargill Fertilizers Inc.

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Agrow at your service

Summary

Agrow Australia provides high-quality raw materials and finished fertilizers to the Australian fertilizer industry. The company also enjoys a significant niche in the burgeoning bulk blending sector, while the engineering division offers a full range of services to meet bulk handling and blending needs.

Abstract

Agrow Australia Pty Ltd. (Agrow) has been marketing world-class fertilizer products for 41 years. In this time, Agrow has worked with overseas principals and Aus­tralian customers to develop logistics solutions that maximise margins for both parties. Agrow’s position in the industry is unique, whereby it has transparent relationships with all levels of the supply chain, from supplier, shipping and warehousing right through to inventory management and distribution. Agrow is re­sponsible for marketing, importing and delivering ap­proximately 1.5 million t/a of fertilizer throughout Australia.

Agrow has a proven track record with the major wholesalers in the Australian fertilizer industry. Development of its Logistics Solutions have met customers’ needs by reducing and controlling inventory, reducing supplier and customer company working capital and increased customers’ netbacks through the provision of just-in-time supply. These relationships have been forged and sustained on principles of transparency and “sharing the savings”.

In addition to supplying the fertilizer industry, Agrow also services a broad range of diversified industries such as the stockfeed industry, speciality products for the oil, gas and aluminium industries as well as bulk materials handling.

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How to maximise water use efficiency

Summary

A prerequisite for maximising the yield and quality of crops while maintaining sustainability is securing an optimal and balanced supply of water. During the past quarter-century, fertigation has evolved as an effective technique of combining water and fertilizer application through irrigation, and it provides the key to both maximise yield and minimise environmental pollution. It is an especially valuable technique in arid and semi-arid regions, and as fertigation gains increasing favour throughout the world, the international fertilizer industry has developed many products to exploit the technology.

Abstract

The availability of water is a critical factor in the achievement of long-term food security. Water, along with seeds and fertilizers, is a major input for agriculture, and according to the FAO, agriculture accounts for 80 % of human water use throughout the world. Clean water is a renewable resource, but in numerous regions, it can be in chronically short supply. FAO estimates that more than 30 countries experience shortages or droughts, and as a result of the growing world population, per capita availability of water is declining rapidly. In Asia, per capita availability is estimated to have decreased from 9,600 m3 in 1950 to 3,300 m3 today.

The amount of water required to grow various food and forage crops is substantial, ranging from 300 to 2,000 litres/kg of harvested crop product. There is a direct correlation between water availability and the efficiency of fertilizer use, as recognised by the International Fertilizer Industry Association (IFA) in its latest position paper, Water Availability and Fertilizer Use, which was published in November 2002. Likewise, fertilizers increase Water Use Efficiency (WUE) by increasing rooting depth and density, as well as the crop’s ability to withstand drought stress. Where water and plant nutrients are scarce and WUE by crops is low, increasing the nutrient availability to a level that is not limiting during plant growth leads to an increase in crop production that is accompanied by an increase in WUE.

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A new identity – renewed commitment

Summary

With effect from 11 February, Kemira Agro became Kemira GrowHow. On the occasion that the Kemira Group announced its financial results for 2002, Kemira GrowHow introduced its new identity to business partners and customers throughout the world.

Abstract

On 11 February, Kemira Group announced its 2002 financial results. It also announced that it has halted the intended disposal of Kemira Agro, revealing a new identity for the division. Staying within the fold as Kemira GrowHow, it will operate as an independent business unit within the group portfolio, with a new, distinctive visual identity. Kemira, which first announced its plans to spin off Agro in February, halted the sale process due to the deteriorating economic conditions of the past few months and a less favourable climate for lending by financial institutions. “The offers received from several candidates did not meet our expectations or our valuation of Agro,” CEO Tauno Pihlava said.

Although Kemira reported a shortfall in earnings in 2002 compared with the previous year, there were some positives, and the Group’s pulp and paper as well as water treatment chemicals and paints business enjoyed improved earnings from operations. Consolidated net earnings increased by 6 % on 2001 and totalled Euro 2.61 billion, compared with Euro 2.45 billion in 2001. Operating income was Euro 45 million, equivalent to 2 % of net sales. This includes Euro 78 million of write-downs relating to Agro, and compares with 2001’s operating income of Euro 144 million, which was 6 % of sales. Income after financial items was Euro 16 million, while net income for the 2002 financial year was Euro 8.2 million. The equivalent figures in 2001 were Euro 113 million and Euro 70 million respectively.

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Formula One is a ­winner in Malaysia

Summary

Aficionados of motor racing will be aware that Malaysia is now an important venue in the Formula One World Championship. In recent years, the country's economy has grown impressively, ­withstanding better than all of its neighbours the consequences of the financial meltdown of the late 1990s, and adding weight to Malaysia's inclusion in the prestigious annual grand prix tournament. The palm oil sector has enjoyed particularly dynamic growth, and the Malaysian Palm Oil Board (MPOB) has done much to promote the evolution of the sector into a world force. MPOB has recently devised a fertilizer that has been devised specifically for palm oil growers. As David Hayes reports, its brand-name pays homage to the popularity and glamour of motor racing in Malaysia.

Abstract

Malaysia is the world’s largest producer of palm oil. Over the past decade, world production of palm oil has doubled to 23 million t/a. Malaysia produces about half of this total, followed by Indonesia. In 2001, Malaysia produced 11.8 million tonnes of palm oil. Production remained stable in 2002, when around 11.9 million tonnes are estimated to have been produced.

Although palm oil cultivation in Malaysia dates back to the early 1900s, it was not until much later that palm oil planting began to take place on a large scale. From the 1960s, the area of land under oil palm began to grow rapidly as part of the government’s plans to diversify Malaysia’s economy and reduce its former reliance on tin mining and rubber production.

The area of land under oil palm has grown dramatically in recent decades as large areas of virgin forest have been cleared for oil palm plantations to be planted. In addition, large areas of rubber plantations have been converted to palm oil production, as palm oil prices and profits from planting oil palm have overtaken rubber prices and profitability. According to Malaysian government statistics, oil palm plantations cover about 3.6 million ha of land. About 50 % of the total planted area is under private-sector control, while the other 50 % is cultivated by smallholder co-operatives and state-backed organisations.

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New sources – now or when?

Summary

Some 80% of total phosphate rock output is delivered to the fertilizer industry, with the balance being directed towards the production of chemicals for a range of industries, including the manufacture of animal feed supplements and detergents. As the global population continues to rise, the demand for these phosphate-derived products is forecast to increase at a comparable rate. This in turn will require increased output of phosphate rock. While five countries account for around 75 % of world production of phosphate rock, the reserve base in some of these countries has only a limited life. The search therefore continues for alternative sources of supply, and there are numerous projects for new phosphate rock production. Five such projects are assessed in this review.

Abstract

World demand for phosphate fertilizers is forecast to continue to rise in relation to the increased world population and food requirements. The largest growth is ex­pected to occur in the developing countries, notably in China and India. Accord­ing to IFA, phosphate consumption is expected to increase by an average 3.6 %/year between 2001 and 2005, generating a commensurate increase in the demand for phosphate rock. IFA estimated that world production of phosphate rock totalled around 120 million tonnes in 2002, a 7 % increase over 2001, when 112 million tonnes were produced.

The “Big Five” of the United States, Morocco, Russia, China and Tunisia accounted for approximately three-quarters of phosphate rock production in 2001. (Table 1) The United States is the world’s largest producer, with a 30 % market share. US production is concentrated in the states of Florida, North Carolina and the western states of Idaho and Utah. Florida and North Carolina account for around 85 % of total US output, while the remainder is produced in Idaho and Utah.

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Still a speciality ­product – or now a commodity?

Summary

Speciality fertilizers – not commodities. This appears to be the mantra of most leading fertilizer producers. Potassium nitrate has enjoyed the status of being a high-value product, which has undoubtedly proved attractive to several companies which have brought new capacity on stream. Does this increase in capacity threaten to kill the proverbial Golden Goose?

Abstract

Potassium nitrate has for long been considered a speciality potash fertilizer, being virtually free of chloride and highly water-soluble. Approxi­mately 80-85 % of all potassium nitrate is consumed in agriculture, while the remaining 15-20 % account for industrial application. It is used mainly:

  • As a straight fertilizer for liquid and foliar application
  • As a potash and nitrogen source in highly soluble NPKs
  • In fertigation and hydroponic systems
  • As a dry fertilizer for straight ­applications.

Prilled potassium nitrate is well suited for intensive cropping systems, where high rates of fertilizer are used and excess chlorine and sulphur are undesirable. This is the case for crops such as tomato, potato, pineapple, peach, citrus, tobacco and leafy vegetables. Since KNO3 has low hygroscopicity, it can be used for direct application or blended with other fertilizers. Standard (crystallised) potassium nitrate is fully water-soluble and can be utilised completely by the plants without leaving unwanted residues. Its high solubility allows it to be used in foliar sprays.

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