Feeding the world

The event held under the theme of working towards global food security, attracted over 200 key decision makers and stakeholders in the regional and international fertiliser industry. High-level delegates from more than 30 countries attended the event to discuss the supply and demand dynamics of the fertiliser industry and the challenges of providing global food security in short and long term scenarios.

The two day conference provided the perfect opportunity to discuss current and future market requirements, capacity planning and initiate action for improving efficiency in the uses of fertilisers- all important steps on the journey to achieving food security.

Major regional fertiliser producers and founder members of the GPCA fertiliser convention were present at the conference including Saudi Basic Industries Corporation (SABIC), Saudi Arabian Mining Company (Ma’aden), Qatar Fertiliser Company (Qafco), Kuwait’s Petrochemical Industries Company (PIC), Al-Ruwais Fertiliser Industries (Fertil) from the UAE and the Gulf Petrochemical Industries Company (GPIC) from the Kingdom of Bahrain.

The event was an opportunity for local producers to meet their customers from all over the world, and to get acquainted with the latest development in key markets like China, India and Australia as GPCA’s members are enhancing their exporting positions on the international markets.

“The GPCA fertiliser members produce about 16% of the world’s nitrogen fertiliser,” said Khalifa Al Sowaidi, chairman of the GPCA’s fertiliser committee and general manager of Qafco.

“By 2011, the region will start exporting phosphate as Ma’aden will start production,” he added.

The first day of the event focused primarily on food security and the impact it could have on feeding the world. The population is projected to increase to 9.2 billion people in the next 35 years.

The address given by Al Sowaidi, underscored the importance of increasing safe food supplies and ensuring that fertilisers played a significant role in output.

“Saudi Ma’aden will start production and export of phosphate by early next year,” he said. Al Sowaidi added that Saudi Arabia has the capacity to produce 2.9 million tonnes of diammonium phosphate, equivalent to 18% of the world Diammonium phosphate (DAP) export market.

A presentation by David Dawe, senior economist at the UN Food and Agriculture Organization (FAO), emphasised the role of fertilisers in future agricultural production and specifically addressed the challenge of feeding 9.2 billion people by 2050.

He charted out the various opportunities that exist for the private sector to deliver improved technologies provided they are not too labour-intensive and listed the advantages of choosing the right fertiliser options.

The growth in food demand is one of the factors that will lead to growth in fertiliser demand.

“There are many factors that may increase fertiliser demand including increase of the area planted, development in Africa, increased irrigation and crop diversification away from cereals,” he said.

From the GCC region, Fahad Alsheaibi, executive VP fertilisers at SABIC, discussed his company’s contribution to fertiliser capacity and food security and elaborated on the fundamental role that the Middle East fertiliser industry plays in managing global food concerns. His presentation also included details of some regional and global food initiatives designed to tackle these issues.

Alsheaibi said that capacities coming on stream from the region by 2015 and 2018, will boost the position of the region as global urea exporter.

“Currently Saudi Arabia produces 3.7million tonnes of urea a year, it is projected to reach 4.8million tonnes per year (t/y) by 2018,” he said.

 “Iran and Qatar are also boosting their capacities as they are set to add 9.9m t/y and 5.3m t/y respectively,” Alsheaibi added in his presentation.

The event was an opportunity to give an insight and outlook of what is happening in different key markets mainly the Indian, Chinese and Australian ones, where speakers from representing industry associations and research centres delivered speeches featuring the current situation of the fertiliser market in their respective markets.

The presentation by Satish Chander, director general of the Fertiliser Association of India, attracted the attention of delegates as it focused on policies and provided an account of the long-term fertiliser needs for his nation, which is by far the largest market for GCC fertiliser producers.

India accounted for 20% of the world’s total nutrient trade last year. “The Indian market consumes 26.48m t/y of urea,” said Chander. “We produce 21.12m t/y while we import 5.21m t/y,” Chander added.

Professor Chen Li, director of Fertiliser Department, China National Chemical Information Centre, provided forecasts and analysis on China’s fertiliser supply and demand, a key factor in estimating global demands. “In 2010, new capacities in China will add 2.92m t/y of urea, and 1.52m t/y of ammonia,” said Li.

Dr Amit Roy, president and CEO, International Fertilizer Development Institute, showcasing research on development of fertilisers, set the pace for the second day of the convention.

According to Dr. Roy, global food production needs to increase by at least 70% by 2050 and possibly double by then, while using less land and water resources as well as ensuring that the environment is not polluted. He urged delegates to invest in the development of next generation fertilisers, adding that this will improve efficiency and productivity of agriculture while conserving natural resources and protecting the environment.

Having addressed food security challenges on day one, the second day speakers discussed how these can be tackled with investment, education and innovation through the food production supply chain.

Khalid Al Mudaifer, VP of Phosphates SBU & new business development at the Saudi Arabian Mining Corporation (MA’ADEN), discussed his company’s contribution to fertiliser capacity and food security and MA’ADEN’s new facility.

“We will start commissioning our phosphate plant in early 2011, and we target commercial production during the second quarter 2011,” said Al Mudaifer. Speaking about the DAP fertiliser production, Al Mudaifer said that Ma’aden’s will be ranked as the second largest exporter of DAP from its current project Ma’aden Phosphates Company (PMC).

PMC’s phosphate project is a US$5.5bn investment between SABIC which controls 30% and Ma’aden which holds 70%.

An outlook on the global midterm gas markets were addressed by Hideomi Ito, natural gas analyst, from the energy diversification division at the International Energy Agency.

“China and India gas consumption is increasing,” said Ito. “China’s gas demand has increased by 10bn cubic metres per year over the past years,” he revealed.

To meet the increasing demand, China has been investing in securing new supplies. “The Turkmenistan-China pipeline which started in December 2009, along with the Mynmar-China pipeline which is under construction are set to meet the increasing demand as well as securing LNG shipment under long term contracts mainly from Australia and Qatar.”

The afternoon session was dedicated to production technology, meeting capacity and environmental expectations with speakers from a number of global players including Uhde GmbH, Stamicarbon, SAIPEM and Mitsubishi Heavy Industries.

“This has been a very rewarding two days and we have shared views, discussed concepts and come out the richer in knowledge for it,” said Dr. Abdulwahab Al-Sadoun, secretary general of GPCA in conclusion.

“I truly believe that such meetings and the interchange of ideas by minds that are thinking thirty, forty years ahead and painting genuine scenarios of what might be allows us insight into the future and we have to grasp this knowhow and put it into use immediately in order to address challenges we will collectively face,” he said. Many delegates echoed the secretary general’s sentiments.