Fatima Fertilizer Weighs Algeria, Nigeria for $1.4 Bln Plant
Fatima Fertilizer Co. (FATIMA), Pakistan’s third-biggest maker of the farming ingredient, is evaluating Algeria or Nigeria as a potential destination to set up a $1.4 billion facility as part of a plan to tap overseas markets.
Teams have visited both countries to select a location with convenient access to natural gas, Fawad Ahmed Mukhtar, chief executive officer, said in an e-mailed response to questions. “We are making good progress and conducting due diligence to finalize terms with possible local partners.”
Fatima is seeking global avenues as Pakistan’s chronic shortage of gas, the key raw material, curbs fertilizer production even as domestic demand grows. Engro Fertilizer Ltd., the biggest urea maker, did not receive any gas in the quarter ended Sept. 30, according to a statement on its website.
The new urea and di-ammonium phosphate plants will have a capacity to produce 1.3 million tons a year and the company may ship to African markets, Pakistan and Brazil, Mukhtar said. Fatima and its affiliates plan to have a stake ranging from 49 percent to 75 percent, with the rest being held by local partners, he said.
Fatima’s shares rose as much as 1.2 percent before closing little changed at 25.98 rupees in Karachi. The stock has gained 13 percent this year compared with a 45 percent increase in the Karachi Stock Exchange 100 Index.
Fatima posted a net income of 1.42 billion rupees in the three months ended Sept. 30, compared with 2 billion rupees for the same period last year, according to data compiled by Bloomberg.
Pakistan’s fertilizer imports accounted for 27 percent of total consumption in the nine months ended Sept. 30, compared with 13 percent a year ago, according to Shajar Capital Ltd. in Karachi. Domestic production of urea and di-ammonium phosphate, the two major types of fertilizer, fell 18 percent to 3.44 million tons in the same period.
Pakistan’s demand for natural gas exceeds supply by as much as 15 percent, according to the central bank.
To contact the reporter on this story: Khurrum Anis in Karachi, Pakistan at email@example.com.