Muscat: A rapidly growing global population and planned capacity expansions are the key drivers for sustained growth for the GCC's fertiliser producers, said industry experts on at the fourth annual GPCA fertilisers convention.
Organised by the Gulf Petrochemicals and Chemicals Association (GPCA), the convention's keynote speech was delivered by Charlotte Hebebrand, Director General of the International Fertiliser Industry Association (IFA). Hebebrand said, "A key driver for fertiliser demand is an expected global population surge."
"As global population is expected to reach 9.3 billion by 2050, food production will have to increase by 50 per cent in the same period," said Hebebrand. She predicted that the solution to ensure that people are fed is not only increasing arable land but also increasing the yield from the currently cultivated land.
"Today, food security is not only about the quantity of food but also quality. We don't want a 'hidden hunger' situation where billions of people are deficient in micronutrients.
Fertilisers are able to provide both, the quantity of food to feed billions of people, but also quality food that is nourishing."
Gulf fertiliser producers are aided by their strategic location between major export markets like East Asia and the United States. "The GCC is a powerhouse in global fertilizer trade," said Hebebrand. Last year, the region's fertiliser products accounted for 30 per cent of global urea and 16 per cent of ammonia supply.
"In fact, the GCC fertiliser production is set to expand, reaching a capacity of 46.4 million tonnes by 2018," said Dr Abdulwahab Al Sadoun, secretary-general of the GPCA.
"There are $10 billion worth of projects currently in the construction or planning stage in the GCC. Because of this, we expect the region's fertiliser industry to grow consistently in the next five years," said Dr Sadoun.
The GPCA estimates that the GCC's fertiliser production capacity reached 31.4 million tonnes in 2012. According to the IFA, global fertiliser capacity reached 255.7 million tonnes in 2011, and is expected to grow by 1.8 per cent per year in the next five years.
Meanwhile, the GPCA estimates that GCC fertilisers will grow by 10 per cent every year in the same period. While analysts have warned of a slowdown in growth due to the availability of cheaper feedstock elsewhere, thanks to the shale gas boom, Dr Sadoun noted that the region's fertiliser products portfolio is already diversifying its mix to produce new grades.