Q & A: Dr. Abdulrahman Jawahery, IFA President
The International Fertiliser Association (IFA), at its meeting in Istanbul, Turkey, last month, unanimously elected Dr. Abdulrahman Jawahery as its President.
The election, by consensus, of Dr. Jawahery came as a result of his ability to manage the global association of the top fertiliser producers and take it to greater heights.
Dr. Jawahery is a founding Member of the Gulf Petrochemicals and Chemicals Association (GPCA) and was recently named to head the Arab fertiliser Association (AFA). He is a Board Member of the British Safety Council and its International Ambassador for national examinations in safety and health as well as social responsibility.
He was recently honoured long for his 35-year career in engineering in the Petrochemical Industry and was awarded a Doctorate in engineering from the University of London South Bank.
Here we have Dr. Jawahery responding to the queries:
1.First of all, could you please give us some information about IFA?
IFA (International Fertilizer Industry Association) is the only international organization representing the fertilizer sector all over the world. It was founded in London in 1927. It has 540 members from 84 countries today. Its members are not only the fertilizer manufacturers. It has members from the sectors that merchandise fertilizers, from equipment sellers and even from media. That is to say, IFA is an organization covering all the activities related to fertilizers. Its objective is to allow production and distribution of environment friendly and productive fertilizers for food safety in the world as well as to create policies, carry out studies and make disseminations for balanced and sufficient plant nutrition all around the world. For this purpose, IFA is in cooperation with many similar organizations and bodies. For example, IFA is a member of the organization called IPNI (International Plant Nutrition Institution) which carries out scientific researches about plant nutrition at an international level. IFA receives the scientific developments from IPNI and transfers them to its members. Furthermore, it carries out introductory activities in various areas, emphasizes the issues such as safety, health and environment in the production process and carries out studies on issues like food safety. IFA has also been a significant contributor to sustainability of food production in the world, therefore, it carries out some activities in close cooperation with Food and Agriculture Organization of the United Nations (FAO). To sum up IFA works in every field that you can think of in relation to fertilizers
2.What is the process that you have had to go through until you were elected to this duty?
Initially, I became the Vice President for Middle East. After that, I was elected for the Executive Management Group (EMG) Council of IFA. The IFApresident is elected by the Council. First you need to be nominated as a candidate. In order to be eligible to be nominated as a candidate, it is necessary to have worked in IFA for a certain period, to have hold a responsible position for a while and most importantly, to have passed through the Finance Committee within the EMG. Because, only this way, you can master the subjects such as what IFA’s income is, how it can be increased, where the budget is spent etc. In other words, it is impossible for a person who has no relevance with the past issues of IFA to become a president.
3.What are your main agenda (targets, goals and challenges) you intend to address during your tenure as the IFA president?
There are two major focal areas of activities that we need to look into: The first one is to explain the importance of food safety and the contribution of our sector to this important area. In order to meet the food demand of the increasing world population, we need to get more crops from our arable lands. To realize this, the plants must be fed in a correct and balanced manner. During my two-year presidency, I wish to concentrate my energies more on furthering the cause of “nutrient stewardship” which is the correct and balanced plant feeding. IFA has already embarked on several initiatives on this issue. My objective is to further promote these activities in conjunction with various organizations such as IPNI and to disseminate results of the activities. Furthermore, we will also try to prioritize various cooperation models in the meetings to be held with national fertilizer associations and agriculture authorities of various countries.
Another important objective I wish to realize during my presidency is to enhance the role of IFA in Communication and Public outreach to enhance the image of the organization. Improve the compilation of fertilizer related statistics from around the world. I would also like to see the continuance of IFA initiatives on Health-Safety-Environment issues. Carryout more benchmarking studies amongst the member companies on HSE initiatives and reward the best ones.
The second area would be steps related to enhancing the day to day working of the association. I would like to review all the procedures and regulations of IFA, make them more streamlined with the actual practice, if possible to enhance them, make them simple while at the same time transparent ensuring that there are no misunderstandings. I would also like to engage all members of the association by giving equal opportunities for participation in the organization’s activities.
4.What are the main growth areas in the Fertilizer industry and what are the main trends to look out for and identify in the global markets?
Over the next five years, world fertilizer demand is projected to grow steadily. Global demand for the primary macronutrients (N,P,K) is expected to increase by 2.6% per year on average. Expert opinion suggests that the growth rate of demand for micronutrients is approximately double that of macronutrients (i.e. 4-5%). Nutrient deficiencies within soils are driving this growth. Anecdotal evidence indicates a trend toward greater use of supplements, primarily driven by concern for the environment and increases in organic production.
Overall, there appears to be four main drivers of growth for fertilizers and supplements: biofuels; food and nutrition security; environmental concerns; and organic production.
The movement towards biofuels is resulting in higher commodity prices and increased crop production. Thereby creating increased demand for fertilizers and supplements as a whole.
Soils, largely in developing economies but also in developed nations, are suffering from nutrient deficiencies. These deficiencies cause problems in terms of food security (i.e., not enough food) and nutrition security (i.e., ensuring that diets contain sufficient nutrients). Fertilizers are essential for agricultural growth in Africa and governments have committed to increasing fertilizer use in order to improve agricultural productivity and end hunger. A progressive but slow increase in fertilizer use across the continent is expected. This market has significant long term potential, but distribution of product is a challenge. Soil deficiencies in Asia are also limiting agricultural production. While phosphate consumption is stabilizing, requirements for nitrogen and potash will continue to grow. Sulphur is also emerging as an important nutrient, particularly in India. There is a very large market for micronutrients in Asia in response to soil deficiencies. Therefore, the key to increasing agricultural productivity in developing economies is balanced applications of nutrients.
Concern for the environment is another factor driving the use of fertilizers and supplements, particularly in Asia and North America. In Asia, there is a very large market for enhanced efficiency fertilizers to address environmental issues and respond to future environmental legislation. In North America, there are increasing opportunities for enhanced efficiency fertilizers, organic fertilizers and supplements, and “green products” in response to regulation and increasing demand for products which reduce environmental impacts. Environmental remediation also requires compost, organic fertilizers and potentially biosolids in order to restore organic matter.
Growth in organic food sales and organic agriculture is creating opportunities for compost, organic fertilizers and organic matter.
In order to take advantage of emerging opportunities, the industry needs to be willing to change and invest in research and development. As well, industry stakeholders need to be ready to anticipate new opportunities and respond with products that suit the needs of users. Entry into new markets is challenging and extensive market research is required for product introduction. The role of government is to provide support including: investment, innovation, research and development, effective regulation, intellectual property rights protection, and export programs to help companies understand potential markets and establish relationships. Overall, industry and government need to work together to capture new market opportunities.
5.Can you give us the main characteristic of the world fertilizer industry as it stands today?
Global Fertilizer Demand
Global fertilizer demand is growing moderately. In the medium term, global fertilizer consumption would show moderate annual growth of 1.8% to reach 199.4 Mt nutrients in 2018. Increases are projected for all three major nutrients, with average annual growth rates of 1.5% for nitrogen, 2.0% for phosphorus and 2.9% for potassium.
Total sales in the fertilizer and industrial sectors in 2018 are forecast at 263 Mt nutrients, representing a 12% increase over 2013.
Positive effects from industry investments
Investments in new capacity by the fertilizer industry will have positive effects in the form of new supply to secure growing fertilizer demand and employment in the manufacturing and mining sectors. Close to 200 expansion projects are expected to come on stream in the next five years, in addition to 30 projects related to phosphate rock mining.
Global capacity of fertilizer products and raw materials would increase by 146 Mt products, or 18%, over 2013. These developments equate to a total investment of US$110 billion. Close to 40 thousand direct jobs and 60 thousand indirect jobs would be created through the fertilizer industry’s on-going investments in new productive capacity.
Global and regional supply trends
A number of developments would occur across regions, reinforcing some regional capacity trends to benefit from abundant natural resource endowments. Mutual interests in supporting and expanding domestic consumption or securing access to feedstock for import will foster intra- and interregional partnerships. Polarization appears to emerge between exportable supply regions and import demand regions. The optimization of operational and environmental performance is leading the fertilizer industry towards more vertical and horizontal integration and inducing broad-based consolidations in developed countries.
Ammonia Outlook:
Global ammonia capacity is projected to grow 16% over 2013, reaching 245 Mt NH3 in 2018. The main additions to capacity will be in East Asia (China, Indonesia), Africa (Algeria, Egypt, Nigeria), West Asia (Saudi Arabia, Iran, Bahrain) and Latin America (Venezuela, Brazil).
Global seaborne ammonia availability in 2018 may increase 3-4% over 2013 to reach 19 Mt, assuming a gradual ramp-up of new capacity. The integration of new downstream capacity would reduce global seaborne ammonia availability to below 18 Mt in 2015 and 2016. Global ammonia supply in 2018 is projected at 176 Mt N and demand at 161 Mt N. Global industrial ammonia demand is projected to expand by an overall 30% between 2013 and 2018, compared with a 7.4% increase in the fertilizer sector.
Urea Outlook:
Global urea capacity would increase by 41 Mt between 2013 and 2018, to 245 Mt. This corresponds to a compound annual growth rate of 3%. East Asia would contribute 36% of the net capacity increase, followed by Africa (22% share) and North America (13%). Global urea supply is estimated at 182 Mt in 2013, 188 Mt in 2014 and 216 Mt in 2018, growing at a projected average annual rate of 4% over 2013. Global demand for urea for all uses is forecast at 203 Mt in 2018, increasing 34 Mt over 2013 or at a 3.3% average annual growth rate over the next five years. Significant increases in urea demand are seen in East Asia (mostly industrial demand), South Asia, and Latin America. These three regions will account for 80% of the world’s urea demand growth until 2018.
Phosphate Outlook:
A large supply of phosphate rock is emerging in Africa and West Asia Global phosphate rock supply would grow to 258 Mt in 2018. Together, Morocco, China and Saudi Arabia will account for 62% of this increment. The global phosphoric acid capacity in 2018 is projected at 61.5 Mt P2O5. Between 2013 and 2018 a total of 30 new acid units are currently planned for completion, of which one-third will be inside China. Large capacity additions will occur in Morocco, Saudi Arabia, China and Brazil. Global supply of phosphoric acid is estimated at 52 Mt P2O5 in 2018. Between 2013 and 2018 global phosphoric acid supply would increase by overall 6.7 Mt overall, representing an average annual growth rate of 3.0% over 2013. Global phosphoric acid demand is forecast to grow at an annual rate of 2% over 2013, to reach 48 Mt P2O5 in 2018.
Global capacity of the main processed phosphate fertilizers would grow by 5.1 Mt P2O5 between 2013 and 2018, to 47.7 Mt P2O5. The expansion of DAP capacity would account for 80% of this increase.
Potash Outlook:
Potash capacity has continued to be developed worldwide, but at a slower pace since 2011. About 20 expansion projects are being carried out by established producers for completion between 2014 and 2018. Only three Greenfield projects are planned for completion before 2019, in Canada and Russia. Global potassium capacity is forecast to increase from 49.7 Mt K2O in 2013 to 60.7 Mt in 2018.
Global potential potassium supply would increase to 51.4 Mt K2O in 2018, representing an overall increment of 8.8 Mt, or 20.7% growth over 2013. Three regions would account for nearly all the projected increase of potential supply: North America (mainly Canada), would contribute 4.6 Mt K2O, followed by Eastern Europe and Central Asia (EECA) (Russia and Belarus) with 3.4 Mt and East Asia (China) with 0.8 Mt. Expansions in the first two regions are earmarked for the export markets.
Global demand for potassium is estimated at 38.3 Mt K2O in 2018, equating to an average annual growth rate of 3.0% between 2013 and 2018. World potash demand would expand at an average annual rate of 1.6 Mt MOP p.a. between 2013 and 2018.
Sulphur Outlook:
Global production of elemental sulphur would grow by 31% over 2013, to reach 73.3 Mt S in 2018, on account of higher S recovery from the oil and gas sectors. Large increases in exportable output are anticipated in Abu Dhabi, Turkmenistan and Saudi Arabia. Production increases in China and the United States would reduce their respective import demand in the near term. Firm sulphur demand in industrial sectors, and moderate growth in the fertilizer sector
Global consumption of elemental sulphur is projected to grow at an annual rate of 3.8% over 2013, to 70.4 Mt S in 2018. This increase would mainly be driven by firm growth of sulphuric acid consumption in industrial segments (particularly in ore leaching operations) and by recovery in demand for fertilizers.
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