Indorama targets 3 million tonnes of fertilizer per annum

…To link Port Harcourt plant to phosphate plant in Senegal

Nigeria is set to emerge as the fertilizer hub in Africa, as Indorama-Eleme Fertilisers and Chemicals Limited outlines plans to push the demand from the present 600,000 metric tonnes to about three million metric tonnes, three years from now.

Manish Mundra, Managing Director and Chief Executive Officer of the company, told BusinessDay team that because the supply of fertiliser was not heavy in Nigeria over the years, the use among Nigerian farmers has been artificially low.

In an exclusive interview at the weekend, Mundra stated that generations of farmers in Nigeria had stopped using fertilisers due to poor supply. He explained that the demand of Indorama fertiliser is about 500,000 metric tonnes of Urea. The company is also supplying 360,000 metric tonnes of Urea through the Federal Government Fertiliser Initiative to the blending plants to produce NPK fertilisers.

Mundra said; “We strongly feel that with about three years of steady supply of all grades of high quality fertilisers at transparent prices, the usage of fertilisers will grow and the demand will grow to over one million metric tonnes. We expect per-hectare use to increase, so that we get to two to three million metric tonnes of fertiliser use in Nigeria.” He said  this would grow food production in the county for both domestic consumption and  exports.

For now, according to Mundra, the nameplate capacity of Indorama Fertilizer is 1.5 million metric tonnes (MMT) but because of the gas supply gaps, the company has reduced to between 1.1m and 1.2mmt. “We have the capacity to do 100 per cent if we have the feed stock”, he said.
He said fertiliser in Nigeria and most of Africa is a combination of NPK (N=Nitrogen or Urea, P=Phosphate, K=Potash). “Nigeria does not have phosphate but Nigeria needs it. It is very important that Nigeria has natural gas (nitrogen) from where Urea and Ammonia can be made. Nigeria does not have phosphate and potash. You need to balance out. What you can do is manufacture a lot of nitrogen and export it to import phosphate and potash. The philosophy is to manufacture plenty of what you have and export, to bring in what you need to meet your domestic need.

“From the onset, we knew that Nigeria does not have Phosphate and Potash plants. What we did, was to have a very big vision and so we acquired a company called ICS in Senegal, which is Sub-Saharan Africa’s largest phosphate plant. We can produce sulphuric acid and phosphate and bring into Nigeria. This way, Nigeria can produce NPK from both plants, through integration of the plants in Nigeria and Senegal.”

The fertiliser plant was financed by foreign loans through the International Finance Corporation (IFC) and some syndicated loans from some local banks. Many companies are having problems paying back their foreign loans but Mundra says the company is managing to survive.

“The local banks contributed almost $140m while the rest came from outside. We did have the challenge of servicing the foreign exchange version, but we have an aspect of our business which involves exporting some of our products. This balances out things. In about two to four years, we would have enough ability to repay the loans. If we factor these things in, Nigeria is still better off, than with imported fertiliser. Plants of this size, you look at the long term,” he said.

Despite the challenges in getting gas supply, the company does not  plan  owning a gas firm.
“We have our supply partners in ENI-AGIP and NNPC. They are doing investments and we are working very closely with them in case there is any requirement of support from our side. We ensure we get about 90 per cent supply. We are very hopeful to be stable in feed stock supply. We have invested in pipelines to OB-OB for the gas supply.

Mundra is very optimistic that despite any challenges, the company is firmly committed to supply the fertiliser needs of all farmers across the country through its world-class plants in Nigeria and Senegal.

 

 Ignatius Chukwu & Ben Eguzozie