Potash company’s subsidy to assume bigger share in global market after deal

AMMAN - The Arab Potash Company (APC) and the Norwegian chemical company, Yara International ASA, have signed a memorandum of understanding, under which the two partners would invest an estimated $200 million to fund a new production line and help market APC’s downstream products worldwide.

The agreement comes as part of a plan to increase the production of APC’s Aqaba-based subsidy, Arab Fertilisers and Chemicals Industries Co. (KEMAPCO) of potassium nitrate fertilisers by 175,000 tonnes, raising the gross production to 350,000 tonnes, through building a new factory with up-to-date production line, according to an APC statement e-mailed to The Jordan Times on Monday.

The memo stipulates that Yara markets part of the KEMAPCO production on international markets, excluding local and regional markets, and provides KEMAPCO with technical and environment support related to potassium nitrate production. 

The production segment in Yara is a “world leading producer of nitrates, calcium nitrate, NPKs, global number two in ammonia and a growing portfolio of phosphates, providing the foundation for Yara’s crop nutrition and industrial solutions”, according to the Yara website.

KEMAPCO has a plant production capacity of 135,000 tonnes annually of water-soluble potassium nitrate fertiliser, which will go up to 175,000 tonnes after the completion of an expansion project that started two years ago, according to the statement. 

The Aqaba plant extends over an area of 140 dunums adjacent to the port, run by 255 employees. Last year, the company built the first water desalination station on the Red Sea to secure the needed quantities of pure water at a capacity of 500 cubic metres per hour. 

Following the signing ceremony, APC Board Chairman Jamal Sarayrah said that the agreement with Yara would contribute to increasing the international market share of KEMAPCO, and push it to the third place globally in manufacturing potassium nitrate fertiliser.

APC, a public shareholding company, is the eighth largest potash producer worldwide by volume of production and the sole producer of potash in the Arab World.  By the end of September last year, the company reported JD65 million in net profit after taxes, provisions and royalties till the end of the third quarter of last year, an increase of 30 per cent over the same period of 2016.