UAE’s Fertiglobe expects to benefit from a tighter urea market as China’s exports of the widely used agricultural fertiliser slow down, the company’s chief executive has said.
China, the world’s second-largest economy, has imposed limits on the export of urea to meet surging domestic demand.
“Typically, they could do three to four million tonnes of exports [annually], but in the first half of this year, they've done less than 200,000 tonnes,” Ahmed El Hoshy told The National in an interview on Thursday.
“China being absent from the market and kind of having a very strong domestic market is definitely constructive.”
Fertiglobe is absorbing a record amount of urea production added in the past 18 months to the global markets, and demand is now “significantly higher” than supply, Mr El Hoshy said.
Fertiglobe is a joint venture between Adnoc and the Netherlands-listed OCI. It can produce up to 6.7 million tonnes of urea and ammonia annually at four plants in the UAE, Egypt and Algeria.
The company’s sales volume in the first half of this year grew 1 per cent annually to 2.8 million tonnes, supported by record output in Egypt and Algeria.
However, sales volume in the latest reported quarter fell by 2 per cent year-on-year due to gas supply disruption in Egypt, Fertiglobe said on Thursday.
Egypt has been facing a severe energy crisis amid declining domestic gas production and high temperatures that led to higher power demand in May and June.
“We've seen kind of record amounts of demand for power and, at the same time, you have maintenance in some of the gasfields ... it was a bit of a perfect storm,” Mr El Hoshy said.
The gas supply situation has improved since the second quarter with the company now able to meet its needs effectively, he said.
Ammonia push
Fertiglobe is also involved in several green hydrogen and ammonia projects in various regions.
The company this year won Germany-based H2Global’s first pilot auction for renewable ammonia.
As the winning bidder, Fertiglobe will supply green ammonia to Europe under a contract worth up to €397 million ($428.4 million) and at a delivered price of €1,000 per tonne until 2033.
Fertiglobe will source renewable hydrogen feedstock from Egypt, where the company is installing 273 megawatts of renewable energy.
Mr El Hoshy said the green ammonia venture offers Fertiglobe more stable financial outcomes due to fixed costs.
“We're a commodity chemicals company … the share price is being impacted by what people perceive as volatility in the pricing,” Mr El Hoshy said.
“Those types of new markets … that can pay a fixed price if we can get either government support or we have a competitive advantage, can help us get into a much better value cash flow stream."
Green hydrogen, seen as a critical low-carbon fuel of the future, can be produced in regions with abundant renewable energy, converted to green ammonia for efficient transportation, and then back into hydrogen at the point of use.
In May, Fertiglobe, in partnership with Ta’ziz, GS Energy and Japan’s Mitsui, made an investment decision on a one million tonne per annum low-carbon ammonia project and awarded the construction contract to Tecnimont, with production expected to start in 2027.
“We are having some discussions on that … it's going to be attractively priced on a delivered basis given the freight advantages we have from the UAE,” Mr El Hoshy said.
"We would look at doing offtakes as the regulations come in place in Singapore, Japan, Korea, as well as other importers like Europe."
The UAE, the Arab world’s second-largest economy, aims to achieve hydrogen production of 1.4 million tonnes annually by 2031, increasing to 15 million tonnes a year by 2050.
The country is planning to develop at least two hydrogen production plants, or oases, by 2031.
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Winners
Ballon d’Or (Men’s)
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Ballon d’Or Féminin (Women’s)
- Winner: Aitana Bonmatí (Barcelona / Spain)
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Best Young Women’s Player
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Yashin Trophy (Best Goalkeeper – Men’s)
- Winner: Gianluigi Donnarumma (Paris Saint-Germain / now Manchester City / Italy)
Best Women’s Goalkeeper
- Winner: Hannah Hampton (England / Aston Villa → Chelsea / England national team)
Men’s Coach of the Year
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Women’s Coach of the Year
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Killing of Qassem Suleimani
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
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The specs
Engine: 1.5-litre, 4-cylinder turbo
Transmission: CVT
Power: 170bhp
Torque: 220Nm
Price: Dh98,900
Company%20profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20WallyGPT%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2014%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3ESaeid%20and%20Sami%20Hejazi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%3Cbr%3E%3Cstrong%3EInvestment%20raised%3A%20%3C%2Fstrong%3E%247.1%20million%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2020%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%20round%3C%2Fp%3E%0A
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- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
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- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
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- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
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Porsche Macan T: The Specs
Engine: 2.0-litre 4-cyl turbo
Power: 265hp from 5,000-6,500rpm
Torque: 400Nm from 1,800-4,500rpm
Transmission: 7-speed dual-clutch auto
Speed: 0-100kph in 6.2sec
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