Fertilizer Markets Continue to Perform Well in 2005 with Spending Nearing $400 Million

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Only two years ago many fertilizer and agricultural chemical producers were closing or mothballing production units across the United States and Canada as a result of slow growth and pressure from the high cost of natural gas. Despite the continued high operating costs and relatively slow growth in demand, the industry has been successful in passing on increased pricing while demand appears to be making steady improvements.

Industrialinfo.com has reported 79 capital and maintenance projects with a Total Investment Value (TIV) of over $396 million planned to kick-off during 2005 for this market segment. Currently only five projects, worth approximately $12 million, have been cancelled or delayed. In 2004, Industrialinfo.com reported 65 planned capital and maintenance projects in the same industry sector with an estimated TIV of only $218 million. Of those 65 projects planned for last year, at least ten were cancelled or placed on-hold, representing a TIV of over $87 million. The substantial increase and change in spending over these two years signals substantial opportunities for equipment and service providers serving this market.

Click on the image at right to view a fertilizer sector project comparison graph for 2004 vs. 2005

Coinciding with the market’s improvement, Potash Corporation of Saskatchewan (PCS) recently announced fourth quarter plans to partially restart its urea ammonium nitrate (UAN) unit in Geismer, Louisiana that has been idle for two years. PCS is not expected to restart its ammonia unit at the site, which was mothballed at the same time in 2003. This planned unit restart combined with other similar activity in this industry sector point to renewed confidence in the agricultural chemicals market.

Koch Industries Incorporated is preparing to begin a major plant maintenance turnaround of their Fort Dodge, Iowa plant in the coming week. During this two week turnaround Koch plans to invest an estimated $10 to $15 million to perform significant upgrades of its 1,100 ton per day ammonia unit, including retrofits of three converters.

There are over 300 operational agricultural chemical plant locations across the United States and Canada employing over 33,000 people. The four market regions with the largest population of plants are the Great Lakes with 52 plants, the Southeast with 48, the Midwest with 47, and the Southwest with 38 plants.

Click on the image at right to view a regional breakdown of operational agricultural chemical plants

View Plant Profile - 1004740
View Project Report - 29000764 29000894

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