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GCC Fertilizer Production Capacity Surges by 12% in 2017, Posting Highest Growth Rate in Six Years
 

Industry generates USD 5.2 billion in sales in 2016 with a USD 8 billion project pipeline over the coming years

Dubai, United Arab Emirates, September 26, 2017 – Fertilizer production capacity in the Arabian Gulf region has reached 42.3 million tons per annum in 2017, rising by 12 per cent over the previous year, a new report by the Gulf Petrochemicals and Chemicals Association (GPCA), the go-to source for industry data, has found. 

According to the report entitled ‘2016 GCC Fertilizer Industry Indicators’, the industry expanded at the highest growth rate year on year since 2011, and further outpaced overall annual growth of 8 per cent per annum over the past decade. Capacity additions in 2017 are mainly driven by Saudi Arabia, the largest fertilizer producer in the region, with projects like Waad Al Shamal, a USD 7 billion joint venture between Ma’aden, SABIC and Mosaic, coming onstream. 

In 2016 the GCC fertilizer industry generated USD 5.2 billion in sales revenue, with plans to invest USD 8 billion in new projects over the coming years. By 2025, regional capacity is expected to reach 49.8 million tons, growing at a steady rate of 2% per annum. Of the additional 7.4 million tons of fertilizer capacity to be added between now and 2025, 95% will come from Saudi Arabia, growing the country’s share in regional fertilizer production to 58%, up from 51% currently. 

GCC fertilizer exports have also been growing at 7.3 per cent per annum over the last decade. These exports account for about a third of the chemicals export volume, with 90 per cent sold in international markets.
Growth in fertilizer exports has a significant multiplier effect throughout the local economy generating an estimated USD 6.7 billion in supporting indirect economic activity in the region, including supporting services, packaging, warehousing and distribution. 

The GCC fertilizer industry has also contributed to growth in non-oil exports, expanding sales in international markets. Economic growth in emerging economies has been one important driver of this expansion. In 2016, GCC retained its position as the world’s largest urea exporter with a global market share of 32 per cent and the second largest exporter of diammonium phosphate (DAP) with a share of 14 per cent. 

Dr. Abdulwahab Al-Sadoun, Secretary General, GPCA, commented, “Much like any other fertilizer producing region globally, the GCC fertilizer industry’s sales revenue has been affected by an overall decline in commodity markets, dropping by an estimated 21% from the year before. Nonetheless, the industry has remained resilient despite volatility in global markets, continuing to expand with a commitment to long-term projects, growing export volumes and significant investment in niche, high-value and environmentally friendly fertilizer products. Furthermore, the contribution of the fertilizer industry to regional progress goes much beyond financial growth, playing an important role in supporting food security and job creation.”

Employing around 54,900 people directly and indirectly, national citizens account for 54 per cent of the industry’s workforce. Over the past decade, direct job creation grew by CAGR of 8.7 per cent per annum, while the chemical industry grew at an overall average rate of 6 per cent per annum.

The ‘2016 GCC Fertilizer Industry Indicators’ report will be released at the 8th edition of the GPCA Fertilizer Convention, taking place between 26 and 28 September at the Ritz Carlton, Bahrain. 

Posted by : Dubai PR Network Editorial Team
Viewed 2891 times
PR Category : Banking & Investments
Posted on : Tuesday, September 26, 2017  3:21:00 PM UAE local time (GMT+4)
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