SABIC has further ensured its position as a leading global producer and marketer of fertilizers with the coming on stream in 2006 of the Saudi Arabian Fertilizer Company (SAFCO) fourth fertilizer project, known as SAFCO IV, at Jubail Industrial City.
The fertilizer project will have annual production capacity of 1.1 million metric tons of ammonia and 1.1 million metric tons of granular urea. SAFCO IV output will sum up, when completed, SABIC overall fertilizer production to eight million metric tons annually.
SABIC has a current production of 5.8 million metric tons of fertilizer per year, of which 3.6 million metric tons is traded in the international market. The rest of the production is supplied to ready and captive markets, including joint venture partners. The range of products produced by SABIC fertilizer group includes ammonia, urea, phosphate, compound and liquid fertilizers.
Three world-class companies in the SABIC fertilizer group produce these products. These SABIC affiliates are SAFCO, Al-Jubail Fertilizer Company (SAMAD), and National Chemical Company (Ibn Al-Baytar).
SAFCO is the first fertilizer producing company in Saudi Arabia. Its production plant in Dammam manufactures 200,000 metric tons per year of ammonia, which are all used as feedstocks to produce 330,000 metric tons of prilled urea. In 1993, the company started its second ammonia and granular urea complex at Jubail Industrial City with annual output of 500,000 metric tons of ammonia and 600,000 metric tons of granular urea. Seventy percent of SAFCO's production in its Jubail complex is used to produce urea, while the remaining 30 percent is sold in the world market. SAFCO's new 500,000 metric ton per year ammonia plant and 600,000 metric tons per year urea plant started production in January 2000.
SAFCO IV, costing about SR.1.24 billion and financed by a consortium of local and regional banks led by Riyadh Bank, will increase the company's total annual capacity to five million metric tons in near future.
SAMAD, the second nitrogen complex on stream in Jubail, is a joint venture venture between SABIC and the Taiwan Fertilizer Company. SAMAD has the capacity to produce 334,000 metric tons of ammonia per year and 534,000 metric tons of prilled urea annually. Ibn Al-Baytar, which is 50 percent owned by SAFCO, is the third nitrogenous fertilizer plant and the first plant to manufacture compound fertilizers. Ibn Al-Baytar went into commercial production in 1987 with an annual production capacity of 500,000 metric tons of ammonia, 500,000 metric tons of granular urea, one million metric tons of compound fertilizers, and 10,000 metric tons of liquid fertilizers.
Since their establishment, Saudi fertilizer producers have played vital role in the development of the agricultural sector in the Kingdom, the Middle East and the rest of the world, particularly in the developing countries. The Kingdom's major fertilizer markets are in Africa, Asia, North America and Oceania, including Australia and New Zealand.
Saudi Arabia is the third largest exporter of urea in the world. The Kingdom is also the single largest producing and exporting country of granular urea. In 2003, SABIC's global share of the urea fertilizer market amounted to 11 percent out of the 21 million tons traded offshore.
The second largest of SABIC fertilizer after urea are ammonia and phosphates. Total production of these products meets 90 percent of the Kingdom overall requirements for phosphates and 100 percent for ammonia. Although most of the ammonia produced by the plants are used as raw material for the production of urea, about half a million tons are exported, mainly to the Far East, Southeast Asia, USA and other Middle East countries.
SABIC fertilizers have enjoyed competitive advantage over other fertilizer producers, like USA, Japan and Europe. These countries have resorted to plant closures and preferred importation as the most economical option. With its competitive advantage, including the availability of feedstock, Saudi Arabia will be able to meet increasing global demand for fertilizer products.
A research program is now being undertaken by the SABIC Research and Technology in order to bring more and greater benefit of the fertilizer industry to farmers and other endusers. Results of these researches and studies are being shared to farmers through agricultural seminars, conference, exhibition and scientific conferences.
© Saudi Commerce and Economic Review 2004
