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Thu 30 Sep 2010 03:10 AM

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SABIC, Ma'aden to produce 1m tons of phosphate next year

Partners' joint venture plant aims to start production by the end of the year.

SABIC, Ma'aden to produce 1m tons of phosphate next year
PHOSPHATE PRODUCTION: SABIC and partner Saudi Arabian Mining Co will produce about 1m tons of phosphates next year at a JV plant. (Getty Images)

Saudi Basic Industries Corp, the world’s largest petrochemicals maker, and partner Saudi Arabian Mining Co will produce about 1 million tons of phosphates next year at a joint venture plant that the partners are completing.

Output at the facility at Ras al Zour on the Arabian Gulf coast will start by the end of this year or early next and it will take 12 to 18 months for the plant to reach full production capacity, Fahad Al Sheaibi, executive vice president at Saudi Basic’s fertilizer unit, said in an interview in Dubai today.

Saudi Arabia is expanding fertilizer production to meet rising food demand. The world’s population will increase to 10 billion by 2050, Al Sheaibi said in a presentation at a Gulf Petrochemicals and Chemicals Association conference in Dubai.

Saudi Basic’s main market for fertilizer products is Asia, and Gulf region producers are the largest external suppliers of the crop nutrient urea to buyers in the east, Al Sheaibi said.

The company will focus on increasing shipments of urea to India as that country liberalizes purchasing rules, he said.

Demand for fertilizers will grow over the next 40 years as a larger and increasingly wealthy world population consumes more meat and eggs, David Dawe, a senior economist with the UN’s Food and Agriculture Organization, said at the conference.

Food and energy prices will be increasingly linked, with potentially high fuel costs spurring fertilizer use as farmers seek greater efficiency, Dawe said.

Agricultural output will need to rise faster than the supply of arable land, forcing farmers to seek greater crop yields, he said.

Saudi Arabia will be able to produce about 18 percent of the world’s diammonium phosphate once the Ras al Zour plant is complete, Al Sheaibi said.

The plant will have a capacity of 2.9 million tons of granular diammonium phosphate a year, along with 450,000 tons of ammonia and 160,000 tons of phosphoric acid, he said. Saudi Basic, known as Sabic, will market most products from the plant for its first five years.

Saudi Arabian Mining, known as Ma’aden, will own a 70 percent stake in the plant with Sabic holding the rest. Ma’aden will supply minerals from the kingdom’s interior.

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