IFA '18: Prospective Pakistan potash player courts MOP majors for supply deal

Source: ICIS News

2018/06/18

BERLIN (ICIS)--Pakistan’s sole prospective sulphate of potash (SOP) developer, Barket Fertilizers, is courting global muriate of potash (MOP) majors in pursuit of a long-term supply contract, the company’s chairman said on Monday.

Speaking from the sidelines of the International Fertilizer Association’s annual conference in Berlin, Germany, Chairman Rasheed Barket hopes to entice either Belarus Potash Company (BPC), or Jordan’s Arab Potash Company (APC) to sign on as long-term supplier for the family business’ latest venture.

The company - a wholly-owned subsidiary of Pakistani industrial firm Pacific Exim - is nearing commissioning of an SOP plant in Port Qasim, Karachi.

The plant should be up and running in late July, or early August.

Once operational, the plant will have an SOP nameplate capacity of 20,000 tonnes/year - although Barket said the company will initially target 10,000 tonnes, while securing sales into the domestic Pakistani market. Six months later, the plant will ramp up to full production.

There was talk of a trader approaching Barket to acquire 25% of the plant’s SOP output for export - although the chairman reiterated that the company will initially target only Pakistani buyers.

As the plant is built on the Mannheim process - by which MOP is combined with sulphuric acid to produce SOP - a regular source of MOP is a necessity.

“We already have received a cargo of MOP from APC,” the chairman said. “But we’re going to need more.”

Sulphuric acid, meanwhile, is sourced from a domestic supplier close to the plant - although Barket added that should the venture’s SOP sales be solid, the site may be expanded with a sulphuric acid plant of its own.

Barket intends to sell the company’s SOP as “a premium product from Pakistan”, leveraging his family firm’s reputation amongst the country’s buyers for its previous mercantile activities.

Pacific Exim imports and markets ammonium sulphate (AS), MOP, SOP, and phosphate fertilizers, as well as being a household name for cooking oil in Pakistan.

Barket Fertilizers was established in response to the Pakistani government’s efforts to promote potash as a source of crop nutrition - which led to a subsidy being placed on the potassium-based product, in an effort to reduce the nation’s reliance on nitrogen-based fertilizers.

Barket says the domestic market will soon require in the region of 150,000 tonnes of potash fertilizer annually - up from 40,000-50,000 tonnes - all of which would previously have been imported.

Curiously, Pakistani farmers choose to apply SOP to all types of crops - as opposed to the premium potassium nutrient’s suitability for high-return crops such as tobacco, fruit, and some types of vegetables - due in part to “psychological factors” among farmers, Barket adds.

MOP traditionally is selected over SOP for mass-produced crops such as rice.

“If a farmer uses our SOP and gets a good crop, they become confident in the product, and continue to buy more,” Barket adds.

Focus article by Andy Hemphill