Algeria Fertilizer Exports: The First Source Of Hard Currency Outside Hydrocarbons

The Fertilizer manufacturing sector in Algeria has turned into the second source of income in hard currency after those collected through the export of hydrocarbons, with on focus the fertilizer-producing company, “Sofert” which has been able to achieve exports worth 500 million dollars, that is half a billion dollars, since coming into production and engaging in the export stage at Arzew in southern Algeria for an investment cost of 1.64 billion Euros, as part of a partnership between Sonatrach and Orascom construction industries of Egypt.

The Acting Director General of the Sofert company, Mr Yazid Ben Mamas, told representatives of national media during a tour of the Arzew industrial zone that the company had become the second source of exports in Algeria in terms of financial value, by garnering through exports of ammoniac fertilizers and urea, over 500 million dollars,  as part of various transactions with customers from Europe, Latin and North America.

Algeria-based nitrogen fertilizer producer Sorfert concluded its first sale after awarding a 20,000-tonne granular urea cargo to OCI Nitrogen at $315/tonne (€236) FOB (free on board).

Invitations for the tender were issued on 4 September with bids to be submitted by 10 September.

The cargo, which was produced at the $2bn Sorfert plant, will load and is likely to be shipped to Europe.

The company has sufficient stocks to cover requirements under the current tender as its two urea lines started production in August.

It is also understood that Sorfert issued another urea tender, although no details are yet available.

The facility’s ammonia lines are now functioning and the producer expects the first ammonia export cargo to load shortly although it is not clear if the sale will be via a tender or on a spot basis.

Once fully operational, Sorfert will produce 800,000 tonnes/year of merchant ammonia and 1.3m tonnes/year of granular urea for export. Ammonia will be pumped via a pipeline to Arzew port, and the urea will be moved by road to warehouses at the dockside.

OCI Nitrogen NV holds a 51% stake in the joint venture, and Algeria’s oil and gas group Sonatrach a 49% share.

Furthermore, Orascom Construction Industries SAE (OCI) says its Sorfert Algeria, started its first production plant during the second half of 2010.

The joint venture agreement covers a period of some 15 years including a 3-year grace period, including the construction period.

Sorfert Algeria agreed a project finance debt facility with Algerian banks worth €1.1billion to fund construction of a nitrogen-based fertilizer production plant in northwest Algeria. Monies raised are in local currency.

The loan has a tenor of 15 years including an approximately 3-year grace period including the construction period.