São Paulo – Fertilizer production in Arab countries located in the Gulf is set to reach 43.1 million tons within the next five years. If the forecast proves true, it will be a 14% increase over the current 37.8 million ton capacity – the equivalent of USD 6.3 billion in additional sales revenues. The information is from the Gulf Petrochemicals and Chemicals Association (GPCA) and was made public this Tuesday (9) by the Emirates News Agency (WAM).
GPCA reports that since 2005, regional production capacity nearly doubled to tap into strong demand from countries like India, the United States, and Brazil.
"Since 2005, the GCC has been the epicentre of a dynamic fertiliser industry, whose growth has been driven by increased demand for food, growing access to feedstock and the rise in global population,” WAM quoted GPCA secretary-general Abdulwahab Al Sadoun as saying. The GCC (Gulf Cooperation Council) is composed of Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman.
For instance, from January to July of this year, Brazil imported USD 435 million in fertilizers from the GCC, an increase of 25% in comparison to the same period of 2015, according to data from the Ministry of Industry, Foreign Trade and Services (MDIC) compiled by the Arab Brazilian Chamber of Commerce.
The executive added that countries from the region are trying to develop other sectors of their economies apart from the oil industry and that this should keep the focus on the fertilizer sector in the medium-term.
The report warns, however, that the current global scenario, one of flat demand and macroeconomic volatility, represents a challenge for producers. “There is no doubt that GCC fertilizer producers are encountering aggressive competition from producers with access to cheap feedstock as a result of the development of the shale gas in the US and coal-based industries in China”, said Al Sadoun.
According to WAM, Saudi Arabia and Qatar lead the sector in the Gulf with a capacity to produce 16.7 million and 9.8 million tons, respectively.
The GPCA will hold an international conference of the sector from September 6 to 8 in Dubai, United Arab Emirates.
*Translated by Gabriel Pomerancblum and Sérgio Kakitani
