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Arab fertilizers' global impact

Summary

The Arab region is a significant exporter of all three key fertilizer nutrients and has been adding value by developing downstream production. This has led to significant new Arab fertilizer investments, notably in Saudi Arabia, Qatar, Egypt and Morocco – and the region is also attracting interest from investors further afield. The Arab region is already the largest global net exporter of urea and it plays a linchpin role in phosphate markets. Its leading fertilizer producers furthermore enjoy the highest levels of profits of any region in the world. Dr. Shafik Ashkar, Secretary General of the Arab Fertilizer Association (AFA) assesses how the Arab producers are set to consolidate their competitive strengths.

Abstract

Between 10-12 February 2009, the Arab Fertilizer Association will host its 15th Annual International Fertilizers Forum and Exhibition at the Cairo Semiramis Intercontinental Hotel, Egypt under the theme of The Fertilizer Industry’s Role in Supporting Poverty Reduction. The meeting offers an excellent opportunity for participants to interact with senior executives from major international fertilizer producers and trading companies, as well as others with a close interest in the sector. Close to 615 delegates representing 284 companies from 41 countries attended last year’s event in Cairo, confirming the importance of the event in the international industry’s calendar.

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Fertilizer use in Arab countries: insufficient for food security?

Summary

In the face of a rapidly rising population throughout the region, agriculture in many Arab countries has fallen short of potential, being characterised by low productivity, poor transport and distribution infrastructures, weak competitive advantages in domestic markets and difficulties in accessing international markets. Leading Arab agronomists are trying to reverse these patterns, as examined here.

Abstract

In his presentation at last year’s AFA Annual International Fertilizers Forum and Exhibition, Ahmed A. Geneif, Consultant and a former Minister of Agriculture in the Sudanese government, emphasised the urgency of attaining sustainable food security in the Arab region. The continuing gap between the demand and availability of food in the Arab region, as well as a sharply rising trend in food prices, calls for a strategic concerted effort to secure food security in the region, he said. Mr. Geneif proceeded to outline potential strategies and policies to achieve this goal. (Attaining Sustainable Food Security in the Arab Region: Strategies and Policies, Ahmed A. Geneif. Paper presented at 14th AFA International Annual Fertilizers Forum, Cairo [February 2008].)

The total value of the food supply gap was estimated at $18.6 billion in 2006. Cereals and flour represented 49% of this gap, milk and milk products 14%, vegetable oil 13%, red meat 7%, sugar 6%, poultry 6%, legumes 2% and fruits 2%. “This situation reflected the failure of agricultural production in the Arab region to provide for food commodity needs in the region,” Mr. Geneif said.

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Bunge invests in self-sufficiency

Summary

Bunge Fertilizantes is the largest fertilizer manufacturer in Latin America. The company is headquartered in Brazil but also has operations in Argentina. In all, Bunge Fertilizantes has around 40 facilities, ranging from mines to blending plants. Its products are marketed under the brand-names of Serrana, Manah, IAP and Ouro Verde.

Abstract

Bunge Fertilizantes forms part of Bunge Limited, a Bermudian-registered agribusiness group with headquarters in White Plains, New York, USA. Bunge is one of the world’s leading ex­porters of soybeans and is also involved in food processing, grain trading, as well as the manufacture and distribution of fertilizers. Bunge Limited can trace its origins to early 19th century Europe, having been founded by Johann Peter Bunge in Amsterdam in 1818, relocating 40 years later to Antwerp. Ernest Bunge set up the Bunge operations in Argentina in 1884 and in 1905 the business extended to Brazil and the United States.

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Arab ports - Ambitious hubs

Summary

With the goal of shipping fertilizers and raw materials competitively via the Arab Gulf, Red Sea and Mediterranean, ports in the Middle East and North Africa enjoy an ever higher global profile. What are the competitive strengths of the leading ports and terminals in the region?

Abstract

The Middle East and North Africa sustain competitive fertilizer and raw material industries which enjoy access to markets throughout the world. A total of around 45 million t/a of all products is shipped from ports in the region. Among the most significant trade flows are anhydrous ammonia from Algeria and Saudi Arabia, urea from North Africa and the Arab Gulf, phosphate rock, phosphoric acid and finished phosphates from North Africa and Jordan, potash from Jordan and sulphur from the Arab Gulf. (Table 1)

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Year of reckoning as parameters change in Russia

Summary

As the leading players in the Russian fertilizer industry continue to consolidate through mergers and acquisitions, we examine their longer term prospects in the face of a harsher global economic climate.

Abstract

At first sight, it would appear that Russia’s economic buccaneering days are now over, killed off by the global credit crunch. Many of the oligarchs of the so-called “New Russia” who picked up state enterprises so cheaply in the 1990s are now pleading poverty, having leveraged their subsequent business activities. Rescue may come in the form of the Russian state, which is eager to reclaim its hold on the country’s strategic resource sector. Thus, history is poised to reverse itself: in the view of the Financial Times, senior bureaucrats will become the new elite of Russia, displacing the oligarchs. (16 December 2008) Will this pattern become evident in Russia’s fertilizer sector?

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Elemental boost to food production

Summary

Shell is breaking fresh ground in the agricultural business with technology that raises the performance of modern, conventional ammonium phosphate-based fertilizers through the effective inclusion of elemental sulphur.

Abstract

It is clear that balancing energy supply with increasing energy demand, while simultaneously preventing damage to the world’s climate, is one of the greatest challenges facing mankind. Another epic challenge, and it is related in some ways, is simply to feed people, especially in those parts of the world where growing conditions are difficult and populations are climbing relentlessly.

With these challenges so clear in everyone’s minds, Shell scientists several years ago started to look more closely at the role of sulphur in the agricultural sector. The result has been the development and introduction of a range of sulphur-enhanced fertilizers that are showing great promise in a variety of crop applications in several countries. Interestingly, there are features of the way the new fertilizers work that may also address some aspects of the first challenge just mentioned of climate change.

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Arab Potash develops the riches of the Dead Sea

Summary

Arab Potash Company of Jordan (APC) has the goal of developing and harnessing the treasures of the Dead Sea. As part of this goal, the company is undertaking a significant investment in additional potash capacity and is evaluating further expansion that would come on stream in the next decade.

Abstract

Jordan has historically been a regional crossroads and a vital trading link between east and west. Situated in the heart of the Arabian peninsula, Jordan covers an area of 92,000 km2. The historic core of the country is the Jordan Valley, where the Dead Sea is located. At a depth of 420 m below sea level, the Dead Sea is rich in minerals which have seeped from adjacent wadis. At a depth of 380 m, the Dead Sea is the deepest hypersaline lake in the world. The Dead Sea is 67 km in length and 18 km wide at its widest point.

In the early part of the 20th century, the Dead Sea began to attract interest from scientists who found that the Sea was a major natural deposit of potash and bromine. The chemical content of the Dead Sea brine has an average density of 1.235 g/cc. It holds a unique variety of salt minerals, being rich in potassium, bromine, magnesium, sodium and calcium with an average salinity of 340 g/litre. The estimated total amount of these salts is over 43 billion tonnes. Table 1 shows the typical Dead Sea composition and quantity.

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Vale starts construction at Bayóvar

Summary

At a time when the availability of good-quality phosphate rock is a potential limiting factor in the long-term growth of the worldwide market for phosphate fertilizers and other products, the news that Vale has commenced construction of the Bayóvar rock mine in Peru is very welcome. Vale has also stepped up its commitment to the fertilizer sector, which now forms a key part in the Brazilian mining group's development strategy.

Abstract

On 5 September 2008, the Brazilian mining giant Vale launched construction of the $479 million Bayóvar phosphate project in the Sechura Desert region of northern Peru. The project is scheduled to begin production in the second half of 2010, supplying an initial 3.9 million t/a of phosphate rock. This output will be directed to the Latin American market, including Brazil, Peru, Chile and Argentina. Brazil today is the biggest consumer of phosphates in Latin America.

The Bayóvar project site is located in Piura state, north western Peru, some 95 km from the city of Piura, 900 km from the Peruvian capital of Lima and 30 km from the Pacific coast. The initial concession com­prises 17 areas totalling 76,000 ha. In March 2005, Vale (then known as CVRD) won an international auction promoted by the Peruvian government to develop and exploit the Bayóvar reserves of phosphate rock.

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Steel vs. GRP in phosphate fertilizer plants

Summary

Glass Reinforced Plastic (GRP) can provide an alternative to stainless steel at a time when prices of the latter have skyrocketed, and there have been numerous successful installations of equipment made from corrosion-resistant GRP in phosphoric acid plants. However, the producers of speciality steel products have not been idle in tailoring their products to meet industry needs.

Abstract

Phosphoric acid plants have been designed to operate continually at high yield. However, at various stages of the production process, from the initial burning of sulphur at up to 1,500˚C to the storage of the produced phosphoric acid, corrosion as a result of the aggressive materials being employed is an ever-present risk. New materials are constantly being developed to counter the effects of corrosion, giving operators a wider choice to ensure the success of the plant’s performance. (Overall Protection in a Phosphoric Acid Plant, Gerd L. Meir, SGL ACOTEC GmbH. Paper presented at 2002 IFA Technical Conference, Chennai, India.)

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Latin America: A period of calm or retrenchment?

Summary

As British Sulphur Events prepares to convene its Fertilizer Latino Americano conference and exhibition in Panama City, it is timely to assess the latest fertilizer projects and revamps in the region. But one question hangs over all other consider­ations, namely, how deeply will the region's prospects be affected by the retrenchment in the global economy?

Abstract

Reduced expectations are the order of the day, virtually in every regional economy and in most market sectors. After several years of unprecedentedly high growth, the world economy is now retrenching, and the outlook deteriorated dramatically during the final quarter of 2008 as the crisis which began in the US financial sector took hold in the real economy throughout the world. The loss of confidence and liquidity in the financial sector has affected the outlook for world GDP growth, which is forecast to drop from 5% in 2007 to 3.7% in 2008 and 2.2% in 2009. (Short-Term Prospects for World Agriculture and Fertilizer Demand, Patrick Heffer, IFA. Paper presented at 34th IFA Enlarged Council Meeting [November 2008].)

Economic retrenchment has already hit the advanced economies of the United States and Western Europe, but the present evidence suggests that the emerging and developing economies have yet to be so severely affected. The prospects for many countries in this category consequently remain reasonably positive. Thus, whereas the United States and EU-27 are expected to experience negative economic growth in 2009, Brazil’s GDP is forecast to grow by 3% during the year. The prospects look fair for other Latin American countries too.

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