Pakistan’s Fatima Group eyes $1bn fertilizer investment in Africa

22 March 2012 05:51  [Source: ICIS news]

By Tahir Ikram

Fatima Fertilizers mulls Africa investmentSINGAPORE (ICIS)--Pakistan’s Fatima Group and its Danish partners are looking at building a world-scale fertilizer project, which is estimated to cost around $1.0bn (€760m), in Africa, a senior company official said on Thursday.

The project will be set up in a country that has the most feedstock advantage within the African continent, the official who declined to be named told ICIS.

Fatima Group, Pakistan’s major producer of urea, calcium ammonium nitrate (CAN) and nitro phosphate (NP), has two facilities with a combined capacity of 2.1m tonnes in the agricultural heartland of Punjab province. (please see table below)

It owns Pakarab Fertilizers Ltd that operates in the southern city of Multan, and Fatima Fertilizers Co Ltd in Sadiqabad.

“Since [the] two generally used raw materials for fertilizer manufacturing are natural gas and phosphate rock, we will look to set up the new fertilizer facility in those African countries which have these resources in sufficiently large and economic quantities and of the right quality, including Algeria, Nigeria, Tanzania and Mozambique," the official said.

“The Danish Industrialization Fund for Developing Countries and Haldor Topsoe of Denmark have agreed to partner with Fatima Group for the new plant in one of these alternates,” he added.

Officials from Danish catalyst company Haldor Topsoe could not be immediately reached for comment.

Fatima Group is currently evaluating different modes of financing the proposed $1bn project in Africa.

“It could be a mixture of equity and debt, with part of the funding from international sources. However, Fatima Group would retain the management rights of the project,” the official said.

Construction is expected to start once the funding structure and terms of gas/phosphate rock supply have been finalized. A project of such scale typically takes take between three to four years to come on stream after achieving financial close, the official from Fatima Group said.

Once online, the fertilizer plant will first cater to domestic farming community where it is located, with its excess output to be shipped out to other markets, possibly including Pakistan, the official said.

“With no [domestic] expansion in manufacturing [of fertilizers] in the pipeline due to acute gas shortages, Pakistan is also another potential market for our new venture,” the company official said.

Pakistan
is a net fertilizer importer, taking in roughly 2-3m tonnes of various kinds of fertilizers, such as urea and di-ammonium phosphate, on an annual basis.

In 2011, the south Asian country’s fertilizer consumption stood at 8.3m tonnes, about 82% of which were met by domestic production, while the rest was imported, according to industry estimates.

Urea is the primary fertilizer used for various crops across Pakistan.

Its urea production last year was 4.9m tones, while its total consumption was higher at 5.9m tonnes.

Pakistan
is short of feedstock natural gas that prevents its fertilizer plants to run at full rates. Its urea production capacity is 6.5m tonnes but the industry was only able to produce 4.9m tonnes in 2011, putting the average capacity utilization at 75%.

The country's gas shortage is estimated at 683 million cubic feet per day (mmcfd), according to official estimates.

But Fatima Fertilizer is planning to increase its ammonia capacity at Fatima Fertilizer by 20% without needing additional gas supply, the official said.

Fatima Group's plant production

Fatima Fertilizer Company Limited

Pakarab Fertilizers Limited

Mid-Product

Mid-Product

Ammonia: 500,000 MT

Ammonia: 316,000 MT

Nitric Acid: 500,000 MT

Nitric Acid: 455,500 MT

End-Product

End-Product

Urea: 500,000 MT

Urea: 92,000 MT

CAN: 420,000 MT

CAN: 450,000 MT

NP: 360,000 MT

NP: 304,500 MT

 

CO2: 63,360 MT

 

 

($1 = €0.76)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Tahir Ikram
+65 6780 4359



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles