By Leman Mammadova
Baku hosted an international conference entitles "Argus Fertilizers 2019 - Production and Logistics in the Caspian and Black Sea Region" on March 14.
The conference focused on challenges and prospects of SOCAR Carbamide Plant in Sumgayit, Azerbaijan’s entry into the international fertilizer market, ammonia and urea markets in the Caspian and Black Sea regions, premium export routes for Caspian fertilizer producers, requirement for new transshipment capacities, Azerbaijan’s agricultural industry and others.
Addressing the conference, President of the Azerbaijani state oil company SOCAR Rovnag Abdullayev said that the commissioning of the SOCAR Carbamide Plant in Azerbaijan contributes to the country’s sustainable development.
“Besides SOCAR implements various energy projects both in Azerbaijan and in the region, the company also supports the development of the country’s non-oil sector,” Abdullayev added.
“One of such steps is the construction of the carbamide plant in Azerbaijan,” he said. “Earlier, $80-90 million were spent on import of fertilizers every year, but now there is no need for that.”
He stressed that some fertilizers will be exported as the production capacity of the plant is several times more than the domestic demand for carbamide.
The head of the company noted that ten years ago it was difficult to assume that Azerbaijan would act as a producer of fertilizers.
Abdullayev said that SOCAR plays an important role not only for the Azerbaijani energy market, but also for the market of the entire region.
Speaking about the company's activity, Abdullayev stressed that SOCAR is already a global company.
“In the past, we sold only products made in Azerbaijan, but now the products of foreign companies occupy a special place in the company's trade portfolio. This trade brings more profit. Thus, the company earned 90 percent of its profit in foreign markets,” he said.
Director of the SOCAR Carbamide Plant Khayal Jafarov said that construction of the carbamide plant will minimize the import of urea fertilizers.
He noted that about 90 percent of the carbamide produced in the world is used in agriculture, adding that it will be the same in Azerbaijan.
Jafarov said that since the mid-20th century, Azerbaijan has become one of the main players in the chemical industry in the former USSR, especially in the production of fertilizers.
“Production ceased as the USSR was collapsed. However, considering the centuries-old agricultural traditions in Azerbaijan, the government decided to build a carbamide plant,” the director of the plant noted.
He stressed that the plant was built under two state programs. “The first is the Food Security Program of Azerbaijan. Within its framework, one of the main tasks was to minimize the import of urea fertilizers,” he said.
He noted that the second program is the Industry Development Program.
Jafarov stressed that SOCAR Carbamide Plant will start export of fertilizers in May of this year.
He noted that up to 500,000 tons of carbamide will be exported per year, adding that most of the products will be supplied to Turkey.
"We also plan to enter the markets of the Black Sea and Mediterranean countries," said Jafarov.
Director said that Samsung Engineering Co., Ltd. will complete the transfer of the carbamide plant of Azerbaijan SOCAR in May, and the transfer process will begin in April of this year.
He also added that the total cost of the carbamide plant is 780 million euros.
"The financing was initially carried out from the budget allocations. 197 million euros was allocated from the budget. KEXIM Bank allocated 251 million euros, Societe Generale (France), "Deutsche Bank"(GErmany) and "UniCredit" (Austria) allocated 249 euros. SOCAR allocated 80-85 million euros," he said.
On March 15, a visit will be organized to the production site of SOCAR Carbamide Plant.
SOCAR carbamide plant, built on the territory of the Sumgayit chemical industrial park, was commissioned on January 16.
The beginning of production at the SOCAR carbamide plant will eliminate the need for import of nitrogen fertilizers, thereby the country's foreign currency spending will decrease. By using 435 million cubic meters of natural gas as a raw material, the plant is capable of producing 650,000-660,000 tons of carbamide.
Moreover, 70 percent of the production is envisaged for export, which will enable the country to receive additional income worth up to $160 million annually. Carbamide fertilizers have the highest nitrogen content, therefore, they are considered the highest quality nitrogen fertilizer. The commissioning of this plant will play an important role in the development of agriculture in Azerbaijan.
The demand for carbamide is connected with its low cost, economical transportation, convenient use, which contributes to high yields in agriculture. This product is also widely used in the production of other chemicals and pharmaceutics.
Presently, SOCAR carbamide plant is the biggest project in the country, implemented in the non-oil sector.
The South Korean company Samsung Engineering Co., Ltd., has provided engineering, procurement, construction and pre-commissioning services for the plant.
Opening up a very good prospect for Azerbaijan to increase the inflow of foreign currency into the country, commissioning of the SOCAR Carbamide Plant is an important step towards increasing Azerbaijan’s high-tech export.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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