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The quest for safer ground

Summary

Norsk Hydro is again in the spotlight, as the group seeks to head off critical comment from the financial community about its recent performance. The company has proved vulnerable to the vagaries of fertilizer markets and so is endeavouring to build up its portfolio in more buoyant sectors. The results for 1999 proved better than expected, thus providing a measure of respite, although the fundamental issues remain to be resolved. This review assesses how easily the company can reach safer ground.

Abstract

Norsk Hydro earned a respite when it announced betterthan- expected financial results on 14 February, but the group must still wrestle with a portfolio that embraces an under-performing fertilizer business, which is in turn heavily skewed towards the nitrogen sector.

Group operating Income for 1999 totalled NKr 7.41 billion ($889.2 million) - a considerable improvement on the NKr 5.83 billion operating income posted in 1998. Earnings in 1999 were boosted by significantly higher prices for oil, but low fertilizer prices and the cost of restructuring the Agri segment, together with a higher tax rate on the earnings from oil and gas, depressed net income by 18%, to NKr 3.09 billion. This total compares with a net income of NKr 3.75 billion in 1998. Another favourable financial indicator last year was the upturn in the rate of return, to 9% (versus 8% in 1998), but this figure remains far below the Hydro target of 15%. Chief Financial Officer Liev Nergaard also pointed to the group's encouraging progress in meeting the targets set by Agenda 99. The programme sought an improved financial performance ofNKr 1.0 billion in 1999: the actual result exceeded this target by over 20%. Likewise, the debt/equity ratio of 0.56 (excluding the effect of the Saga Petroleum acquisition) was better than expected, though Mr. Nergaard acknowledged that the company still had some way '\:0 go before targets were met.

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A bright beacon

Summary

The Arab Fertilizer Association (AFA) 6th Annual Conference that was held between 3 I January - 3 February attracted a record 350 delegates to Cairo from around the world. The participation of so many senior figures from the international fertilizer industry emphasises the importance with which the AFA Annual Conference is today regarded. The AFA, in turn, proved not only more than equal to the task of organising such a high-calibre meeting, but also offered a unique level of hospitality that made everyone's visit to Cairo memorably worthwhile.

Abstract

Delegates, speakers and exhibitors were welcomed by Zuhair Zannouneh, AFA Chairman and General Manager, Jordan Phosphate Mines Co. aPMC). He observed the ever-increasing importance that the Arab region is playing as an efficient supplier of competitively-priced fertilizer products to international markets. The Arab region today accounts for 20% ofthe world market for nitrogen fertilizers, and the region is also well established in the phosphate and potash sectors. As well as operating technologically-advanced plants, Arab fertilizer producers are setting world standards for sound environmental management. Mr. Zannouneh looks forward to the ever more central role the region's fertilizer industry will play on the world stage.

TheAFAAnnual Meeting has become established as one of the best forums for top-calibre presentations in the world fertilizer annual calendar. This was reflected in the five sessions spread over the three days of the meeting. The first group of presentations looked at Fertilizer Policy in the World, and was inaugurated by Luc Maene, Director General of IFA. His paper addressed the major issue of Efficient Fertilizer Use and Its Role in Increasing Food Production andProtecting the Environment. He noted the predictions ofa39% increase in cereal demand between 1995 and 2020 and a 58% increase in the demand for meat. The burden ofmeeting these increases in food consumption will fall increasingly on the less developed countries. The challenge is how to meet the forecast increase in demand by developing sustainable agricultural systems, retaining the benefits of fertilizers while minimising their adverse consequences.

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A quadruple nutrient bonus

Summary

The German potash producer, Kali und Salz, offers a comprehensive range of speciality fertilizers, which have been welcomed by growers of high-added value crops. The latest addition to the company's portfolio is Bittersalz "microtop". Here, K. Orlovius, of Kali und Salz's Agricultural Advisory System, outlines the newcomer's excellent performance.

Abstract

The principal means of nutrient uptake by plants is via the soil/root system interface, which in turn relies on an adequate soil nutrient content. However, even in situations of adequate soil fertility, the nutrient supply to the plant can be temporarily insufficient for optimum production at critical periods as a result of either:

  • Temporary unavailability of soil nutrients
  • A reduction in nutrient uptake by the roots due to the transition from vegetative to reproductive and storage phases.

In such situations, foliar spraying with fertilizer solutions has proven to be an effective means of overcoming these nutrient limitations and satisfy the high short-term nutrient demands ofthe crop. The major advantage offoliar fertilisation lies in its ability to offer fast and effective correction of nutrient deficiencies in actively growing crops.

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Seeking the promised land

Summary

The fertilizer industry has for some years been seeking ways of increasing the efficiency of its products. The challenge is given added urgency by the prospect of ever tougher environmental legislation to control fertilizer use. The progress so far is summarised in the following review.

Abstract

According to Dr. Martin E. Trenkel in his authoritative review, Controlled-ReLease and Stabilised Fertilizers in AgricuLture (IFA, 1997), the estimated total amount of 562,000 tla of controlled-release fertilizers which were applied in 1995/96 represents barely 0.15% of the world's total mineral fertilizer consumption. Dr. Trenkel comments: "With no technological breakthrough in sight, it seems that controlled-release fertilizers (CRFs) will have no impact on world food production in the foreseeable future." However, other technologies are available to improve the efficiency of nitrogen use, such as urease and nitrification inhibitors, and these have gained an important market niche for applications on agricultural crops. Their use has resulted either in higher and more consistent crop yields, or in steady yields with reduced N application rates.

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A Challenge to be met

Summary

The fertilizer industry is endeavouring to meet the challenge of improving the efficiency of its products, notably by developing improved fertilizers which release their nutrients in greater accordance with the prevailing crop and soil conditions. Among the new products now making an increasing impact in world markets are foliar fertilizers, slow-release and controlled-release coated/encapsulated fertilizers, as well as stabilised fertilizers, which incorporate nitrification or urease inhibitors. Some of the product developments are described below.

Abstract

The German company, BASF AG, was a pioneer in the manufacture of slow- and controlled-release fertilizers. As early as 1924, the company patented its first urea-formaldehyde fertilizer product. Commercial production began in 1955, and today, the erstwhile BASF affiliate, COMPO (which is now owned by K+S AG), manufactures five types of urea-formaldehyde fertilizer in the solid and liquid form. Recognising the challenge ofdeveloping new fertilizer products for the future to complement its well-established range of traditional fertilizers, COMPO has been vigorous in applying new innovative technologies. This strategy is beginning to yield some highly encouraging results.

ofcoated fertilizers in theWest European market. These are sold as Nitrophoska Top, Basatop Sport and Basacote Plus. The objective was to control or delay the release of nutrients so that they better match the up-take requirements of the crops. The basic mechanism ofcoated fertilizer is illustrated in Fig. 1. By coating the fertilizer with an elastic polymer, the release of the nutrients is delayed. Soil moisture and temperature determine the rate of release, thus ensuring that the nutrients become available to the plant as it requires them. COMPO emphases the points that favour coated fertilizers, as follows:

  • Optimum nutrient utilisation by the plant
  • Best compatibility
  • Pronounced long-term benefits, according to the thickness of the coating
  • Marginal losses through leaching
  • Application costs are reduced, as only one dressing is necessary.

 

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