Key factors that played a role in the industry’s growth include the abundance of natural gas, phosphate rocks and sulfur in the region, increased fertilizer demand, access to world-class infrastructure and a favorable supply chain, advantageous geographic proximity to burgeoning fertilizer markets in Asia – a key destination for GCC fertilizer exports, and the availability of leading-edge technology providers.

As GCC fertilizer producers began diversifying in the late 1990s with the addition of phosphate fertilizers, the region’s product portfolio has evolved significantly over the years.

The Arabian Gulf is world’s largest urea exporter, accounting for 33% of global exports and 10% of global production. In 2020 the region’s urea exports are projected to reach 16 MT.  (Fig. 4, Fig. 5)

The region is the world’s second leading DAP exporter, accounting for 20.8% of global DAP exports and 10% of global DAP production. In 2020 the region is projected to export 3.8 MT of DAP fertilizers. (Fig. 6, Fig. 7)

GPCA forecasts that the regional fertilizer industry will add 6.1 million tons of new fertilizer capacity between 2019-2029. DAP is expected to account for 49.4% of new capacity additions, urea for 30.3% and ammonia for 20.3%.

Saudi Arabia and Qatar represent major production hubs of ammonia and urea in the region, with DAP production currently available only in Saudi Arabia. The kingdom is expected to account for 40% of GCC ammonia production share and 25% of GCC urea production by 2024, while Qatar will account for 24% and 34%, respectively.

Fertilizers was previously the main export product from the GCC to China, but with China increasingly focusing on meeting its own fertilizer needs this trade structure virtually disappeared. As a result, India became the largest export market for GCC fertilizers in 2018, accounting for 27.9% of total exports, followed by the US, Brazil, Thailand, Australia, South Africa, and others.  (Fig. 9, Fig. 10)

The development of new markets is critical for GCC fertilizer producers, particularly on the African continent where robust fundamentals are present for fertilizer market growth. Africa has the fastest growing population in the world and is forecast to account for 40% of global population growth by 2050. The African market enjoys abundant natural gas and phosphate reserves that can be utilized for the development of new projects. However, with fertilizer consumption poised to increase, governments are targeting improvements in efficiency and fertilizer use.

In line with its objectives to capture new growth opportunities in emerging markets abroad, GCC producers have embarked on market penetration in the African market, establishing joint ventures with fertilizer producers and investing in the fertilizer supply chain. Last year Ma’aden acquired 85% in Meridian Group which has afforded it access to a distribution network in southern Africa (Mauritius, Malawi, Mozambique, Zimbabwe and Zambia). Furthermore, in the UAE, Fertil formed a joint venture with OCI’s producers in Egypt and Algeria, making it the largest nitrogen-based fertilizer company in the Middle East and North Africa.

Driven by strong sustainability agendas and waste reduction objectives, GCC fertilizer producers are capturing CO2 emissions and utilizing them as feedstock in the production of fertilizers. As a result of their recovery efforts, some of the region’s leading fertilizer producers, Fertil, QAFCO, SABIC and GPIC, capture a combined 800,000 tons of emissions a year and convert it into high value-added products such as ammonia, methanol and urea.

The GCC fertilizer industry is evolving and continues to grow as regional producers are capturing new growth opportunities within and outside the region. The industry remains on a positive growth trajectory with an increase in production capacity and an evolving product portfolio. A changing export landscape is impacting regional exports. However, producers are targeting new markets in Africa to foster fertilizer development. GCC producers are venturing further downstream into new product areas to drive growth and diversify production. The regional fertilizer industry remains a key contributor to sustainability as it continues to focus on energy conservation through waste reduction and carbon management, turning what’s otherwise considered as waste into high value added products.

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