AGRICULTURE

SAUDI SOWS SEEDS OF FERTILISER OUTPUT GROWTH

SABIC Agri-Nutrients Co. (SABIC AN) and the Saudi Agriculture Livestock Investments Co. (SALIC) have teamed up to map a more food secure future for the kingdom in the wake of intensifying environmental changes.

A memorandum of understanding between the two companies set out a general framework of co-operation, which includes studying the possibility of joint investment in the agriculture value chain, exploring the potential for international contract farming, and studying opportunities in international distribution targeting key agricultural markets.

“SABIC AN is constantly looking to improve efficiencies through realisation of synergies with leading companies and maintaining a competitive edge in global markets,” according to Yousef Al-Benyan, SABIC AN chairman. “Toward this direction, our MoU with SALIC will jointly identify, prioritise and execute opportunities in the area of agri-nutrients, where our expertise is helping farmers produce higher yields, and is playing a vital role in providing secure, reliable food sources.”

SABIC AN is 50.1% owned by SABIC, and the rest by the private sector and the wider public. It manufactures, distributes, and markets fertilisers and related specialty products. For its customers around the world, SABIC AN supplies a wide variety of fertilisers ranging from general to highly specialised urea, ammonia, phosphate-based fertilisers, a comprehensive portfolio of nitrogen-based inorganic products, and specialty solutions.

 

The fertiliser industry is critical in boosting agricultural production. Saudi Arabia is aiming to tap its reserves to emerge as one of the largest exporters of fertilisers in the world, with local and international investments.

“SALIC’s geographically diverse investments in agriculture provides the appropriate channels for marketing and exporting Saudi fertilisers to different countries. This will contribute significantly to sustaining agricultural production in those countries, and goes in line with the realisation of the kingdom’s food security strategy,” said Abdul Rahman Al Fadhli, minister of environment, water and agriculture, and chairman of SALIC.

The MoU also covers evaluating the possibility of co-operation in logistics and supply chain costs optimisation; developing and testing new agri-nutrient grades and applications; and utilising best practices, new grades, and digitalisation.

Mordor Intelligence estimates that the Saudi fertiliser market will grow at a compound annual growth rate of 7.4% between 2022 and 2027.

“Over the years, Saudi Arabia, a country that receives an average of just about four inches of rain every year, has aimed to develop its agricultural sector to achieve self-sufficiency in food security,” the research firm said. “Thus, the application of fertiliser to improve crop growth and yield is expected to become crucial, creating higher demand for fertiliser.

    

SABIC AN has also partnered with Saudi Arabian Oil Company (Aramco) in August to obtain the world’s first independent certifications recognising “blue” hydrogen and ammonia production.

The certifications were granted by TÜV Rheinland, a leading independent testing, inspection and certification agency based in Germany, to SABIC AN in Jubail for 37,800 tonnes of “blue” ammonia, and to Aramco’s wholly owned refinery (SASREF), also in Jubail, for 8,075 tonnes of “blue” hydrogen.

Ammonia plays a key role in food production. Around 50% of global food production depends on mineral fertiliser application such as ammonia. Ammonia binds air-borne nitrogen and makes nitrogen, the most important crop nutrient, available for fertiliser production. As an important base material for fertilisers, ammonia literally helps to put food on the table.

Today, roughly 80% of the annually produced ammonia is used for fertiliser production.

“These certifications are the first of their kind in the world and signify a major milestone in our efforts to develop clean energy solutions, and advance our hydrogen and ammonia export capabilities. This independent recognition reinforces the work of Aramco and SABIC in decarbonising multiple sectors, including energy, aviation, transportation, chemicals, and fertiliser industries,” said Aramco’s vice-president of chemicals, Olivier Thorel.

The government is also taking a number of measures to boost local food production. In July, the Ministry of Environment, Water and Agriculture unveiled plans to expand poultry production with an investment of SAR 17 billion. The facility, which will target production capacity of 13 million tonnes of broiler chicken annually, will boost Saudi self-sufficiency in poultry meat to 80% of total by 2025.

“The Agricultural Development Fund for companies and institutions wishing to expand in the poultry production industry will provide around 70% of the investment cost when using advanced technologies,” the ministry said, noting that new expansion investments will help achieve food security for the kingdom, and provide high-quality local products at affordable prices.