Dr GERT v d Linde

Report
AN OVERVIEW OF THE
SOUTH AFRICAN
FERTILISER INDUSTRY
By
Gert van der Linde
Director
Fertiliser Society of South
Africa
13 September 2011
Introduction
•
•
•
•
•
•
•
•
Short historical overview
Present Position
Domestic Fertiliser Consumption
Consumption by Crop
Price Trends
Local Industry matters
Future outlook
Fertiliser availability
Introduction
• South African Fertiliser Industry supplies
about 2 million tons of fertiliser products
annually.
• This is equal to about 750 000 tons of
plant nutrient (N + P2O5 + K2O)
• At a value of around R10 billion ($1.4
billion)
• Represents approximately 20% of RSA
chemical industry (excluding oil)
Short historical overview
• First Chemical fertiliser used in 1890
• First local factory 1903 - Safco in Durban utilised bones for phosphate
• 1919 - Kynoch started with explosives
• 1921 - Cape Explosives started
• Then several dry blending facilities were
established
Short historical overview
• Price control was introduced in early
1940’s as a war measure.
• Until early 80’s the industry
flourished in a protected trade
environment and under government
support for agriculture in general
Short historical overview
• Development of SASOL, ISCOR,
FOSKOR in early 1950’s
• New companies started up such as:– Omnia
– AECI
– Triomf etc.
Present Situation
• In 1984 the opening up of the South
African economy started
• This led to liberalisation of trade
policies and abolishment of price
control.
• It gained momentum during the 90’s
• Led to large scale rationalisation and
restructuring in the fertiliser industry
Present Situation
• During
2010
the
last
major
restructuring
of the SA fertiliser
industry took place:• SASOL decided to concentrate on
wholesale – closed their phos acid
plant in Phalaborwa.
• Yara decided to pull out of South
Africa – sold their share of Sidi Pirani
– sold their business to Farmsecure.
Present Situation
The South African fertiliser
industry of today is fully
exposed to world market
forces in a totally deregulated
environment with no import
tariffs
or
government
sponsored measures.
Present Position
Raw Material Producers
1. Nitrogen:- Sasol Limited supplies
most of country’s ammonia some
also from Arcellor Mittal (Iscor)
2. Phosphates:- Foskor supplies phosphate concentrate for domestic use
and export.
• Foskor is a significant exporter of
phosphoric acid from Richards Bay
Phosphoric acid production at
Foskor, Richards Bay
700 000
600 000
400 000
300 000
200 000
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
100 000
1990
Tonnes P2O5
500 000
Present Position
3.
Potassium: - All South Africa’s
potassium requirements are imported
Present Position
RSA fertiliser demand, domestic production & exports
Nutrient
Nitrogen
(N)
Demand Domestic
(‘000 t) Production
(‘000t)
400
250
Imports
(‘000t)
Products
150
Mostly Urea
Phosphate
(P2O5)
200
Over 90%
of demand
<10% of
demand
Mostly DAP
Potassium
(K2O)
160
None
All
Mostly MOP
Present Position
• Sasol Nitro, Profert and Omnia have
granular and/or bulk blending plants.
• They also produce liquid fertilisers
• Several blender companies produce dry
bulk blended products from these granular
products as well as from imported raw
materials.
Domestic Fertiliser Consumption
• 40% of total domestic fertiliser is
consumed by Gauteng, Mpumalanga,
Limpopo and North West province.
• Free State uses 20%
• Other 40% is consumed by Kwa ZuluNatal and the Western Cape.
3 500 000
700 000
3 000 000
600 000
2 500 000
500 000
2 000 000
400 000
1 500 000
300 000
1 000 000
200 000
500 000
100 000
Physical tons
Nitrogen
Phosphorous
Potassium
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
1967
1964
1961
1958
0
1955
0
Nutrients (Tons)
Fertiliser (Tons)
Fertiliser consumption in South Africa 1955 to
2010
Fertiliser Use
• The viability of the South African fertiliser
industry is closely linked to the viability of
the agricultural industry.
• Maize production consumes ~40% of all
fertiliser sold in SA.
• Sugar cane 15%
• Wheat 10%
Fertiliser Consumption by
Crop in SA
Crops/groups
Percent
P2O5
K2O
175
25
8
<1
38
2
21
269
73
18
11
1
24
10
16
153
17
3
1
<1
54
4
3
82
265
46
20
2
116
16
40
505
41
7
3
<1
18
2
6
78
0.6
0.5
3
0.5
2
0.1
6
1
<1
<1
N
Total
Field crops
Maize
Wheat
Sunflower
Soybeans
Sugar Cane
Lucerne
Other Pastures
Sub Total
Industrial crops
Tobacco
Cotton
Price Trends
• South Africa is a net importer of
Potassium.
• Imports around 50% of its Nitrogen
requirements.
• Domestic prices are severely impacted by
international prices of raw materials and
fertilisers as well as shipping costs and
the Rand/$ exchange rate and the oil
price.
400
1 200
350
1 000
300
800
250
600
200
400
150
200
100
Ammonia
Sulphur
Phosphoric acid
Phosphate Rock
Brent crude oil
Apr-11
Dec-10
Aug-10
Apr-10
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
Dec-07
Aug-07
Apr-07
Dec-06
Aug-06
Apr-06
Dec-05
Aug-05
Apr-05
50
Dec-04
0
Oil Index
1 400
Aug-04
Index
International Price Index of Raw Materials
(Aug 2004 = 100)
Urea
Potassium
DAP
Brent crude oil
Apr-11
Dec-10
Aug-10
Apr-10
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
Dec-07
Aug-07
Apr-07
Dec-06
Aug-06
Apr-06
Dec-05
Aug-05
Apr-05
Dec-04
Aug-04
Index
700
400
600
350
500
300
400
250
300
200
200
150
100
100
0
50
Oil Index
International Price Index of Fertilisers
(Aug 2004 = 100)
05/04/2011
05/10/2010
05/04/2010
05/10/2009
05/04/2009
05/10/2008
05/04/2008
05/10/2007
05/04/2007
05/10/2006
05/04/2006
05/10/2005
05/04/2005
05/10/2004
$/Barrel
Brent Crude Oil Price History
$145
$135
$125
$115
$105
$95
$85
$75
$65
$55
$45
$35
93 unleaded
Diesel
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Rand/liter
Price of fuel in Gauteng since Jan 2001
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
10/05/2011
10/01/2011
10/09/2010
10/05/2010
10/01/2010
10/09/2009
10/05/2009
10/01/2009
10/09/2008
10/05/2008
10/01/2008
10/09/2007
10/05/2007
10/01/2007
10/09/2006
10/05/2006
10/01/2006
10/09/2005
10/05/2005
Rand per $
Rand Dollar Exchange Rate
11.60
10.60
9.60
8.60
7.60
6.60
5.60
Government Control
• All fertilisers, including organic,
must be registered in terms of Act 36
of 1947.
• The Act is administered by the
National Department of Agriculture.
• Quality and composition of fertilisers
are monitored by the Registrar of Act
36.
Government Control
• The fertiliser industry is dependant on the
Registrar to:• Help protect local industry by stopping
illegal imports of unregistered products
which do not conform to the regulations.
• And to help maintain quality control of all
products manufactured in SA.
Future outlook
• Looking back - Very little if any growth
over last 10 Years
• Looking forward - no significant growth
expected in South Africa
• Export opportunities into Africa should
open up.
Future outlook
• Uncertainty around the land reform policy
of the government - possible temporarily
negative impact on fertilisation and crop
planting - until emerging farmers are fully
established as commercial farmers
Future Outlook
• More
optimistically
the
emergence of a Bio-fuel
industry may have positive
impact on crop demand and
thus fertiliser demand.
Future Outlook
Some further rationalisation
may be required to maintain
viability of the local
fertiliser industry.
Global Capacity Expansions and
Investments (2005 – 2015)
The Fertilizer Society of South Africa
• FSSA was established in 1959 as a
section 21 non-profit company.
• Represents the fertiliser and aglime
industries of SA.
• Membership 18 in SA, 2 in Zimbabwe
The Activities of the FSSA
• Promotion of agro-economic and
environmentally accountable fertilisation
and liming practices.
• Promotion of positive public awareness
and acceptance of fertiliser use.
• Act as a forum to facilitate effective
liaison and negotiations with government,
organised agriculture and other interest
groups.
The Fertiliser Advisor,
Certification and Training
Scheme (FACTS) of the FSSA
FACTS
• The FSSA and BASOS cc administer the
FACT scheme.
• The main objective is to enable people to
have a basic understanding of fertilisers and
agricultural lime and to enable them to
advise growers and farmers in an
economically and environmentally sound
manner.
FACTS
• The training scheme is also of great benefit
to farmers as they relate and interact much
better with their appointed advisors.
• It also provide extension officers with
additional tools to help them to better ply
their trade.
• Since inception (1998) more than 600
candidates have enrolled and passed the
written exam.
FACTS consist of 8 Modules
1. Basic principles of plant nutrition
2. Factors that determine growth of plants
3. Origin, production and properties of fertilisers and
aglimes
4. Advice and recommendations based on soil samples and
yield potential
5. Application methods of fertilisers and aglime.
6. Transport, handling and storage of fertilisers.
7. Fertilisers and the environment.
8. Fertigation and irrigation
Once enrolled,
candidates are
supplied with the
FSSA’s flagship
publication,
“Fertiliser
Handbook”.
They also receive notes on the 8 modules.
Each candidate that successfully passes the
exam receives a credit card size certificate
identifying him/her as an accredited fertiliser
advisor.
FACTS
In countries outside South Africa the
FACTS team will travel to the country
and present the course over a period
of one week to candidates.
They will also facilitate the writing of
the exams.
www.fssa.org.za

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