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Sat 7 Nov 2009 10:57 AM

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Qatar fertiliser firm ups output, eyes South America

Industries Qatar to up urea production 87% by 2012; Qafco sees demand in S America.

The fertiliser unit of Industries Qatar is increasing production of urea and related products to supply growing global demand with a specific focus on South America, executives said on Thursday.

"We are studying new products, producing urea with sulphur is one of the projects we are thinking of as demand is going to increase globally," Qatar Fertiliser Co Chairman Abdulla Salatt told reporters in Doha.

Gulf Arab producers of fertilisers have been looking for new markets after penetrating regional markets and feeling the pinch of heavy taxes in the European Union on the competiveness of their products.

Salatt said its new $610 million plant would increase urea production to 5.6 million tonnes a year by 2012 from 3 million tonnes a year. Once the plant is completed, Qafco would hold 15 percent of global urea production.

Qafco exports half of its output to the United States, Thailand and Australia, managing director Khalifa al-Sowaidi, said adding South America, and Brazil, especially, would become a key export market in the future. It also plans to open office in India. The company exported 80,000 tonnes of urea to Brazil in 2008, Sowaidi said.

Industries Qatar shares reversed early losses after the news and were up 0.8 percent at 0931 GMT.

"We are thinking of sending more products to South America -- Brazil -- because it is a big agriculture country, consuming a lot of urea and we see their appetite for urea opening up year after year," Sowaidi said.

The firm will make a decision next year on the construction of the new plant combining urea and sulphur with a capacity of 1,750 tonnes a day, Sowaidi added. (Reuters)

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