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Foskor Richards Bay is one of the biggest producers of fertilizers in South Africa. It was founded in 1951 as a single phosphate mining operation in order to prevent us form depending on imports of phosphate rocks, which are one of the most essential raw materials needed in the production of fertilisers. It has now expanded to having three main mining and production sites in Richards Bay and Phalaborwa.
The facilities in Richards Bay are more focused on producing phosphoric acid and phosphate-based fertilisers and also locally distribute some sulphuric acid.
Foskor Phalaborwa is a region famous for the amount of copper and phosphates available there and therefore concentrate more on the mining and beneficiation of these substances.
Foskor is nowadays one of the prime international traders of phosphoric acid with a 12% share in the market, importing to countries such as India, Japan and Brazil. It does not only produce phosphoric acid, but also magnetite, fused zirconia, sulphuric acid and fertiliser granules.
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Kynoch fertiliser was founded in 1919 at Umbogintwini. It started out an explosives producer but soon began producing chemical fertilisers as a result of the by-product of explosives, sulphuric acid. In 1924 it combined with Capex to form AE&CI (African Explosives and Chemical Industries), and was more recently taken over by Yara Norsk Hydro.
The aim of Yara is to grow and sustain the fertiliser industry by exploiting their leading position in the markets of ammonia, nitrates fertilisers.
“Yara aims to evolve from being a leading player into the shaper of the nitrogen-based chemical industry”, quoted from the Yara website (http://www.yara.com/about/vision/index.aspx)
Omnia is considered one of the most environmentally conscious fertiliser producing companies in South Africa; it has won the 2008 Mail & Guardian/Department of Environmental Affairs and Tourism “Greening the future” award for Envinox plant.
Its motto “Growing food security, Growing profitability” clearly illustrates the company’s aim, which is to encourage farmers to use fertilisers as to yield more crops while preserving the Earth’s natural or enriched state as not to harm it.
Omnia produces granular, liquid and speciality fertilisers which are manufactured at different plants throughout the country. Its biggest laboratory, Chemtech Agri, is situated at Sasolburg, which supplies the product directly to farmers and wholesalers. Other than supplying locally, it also exports from its Johannesburg division to Omnia business in Zimbabwe, Zambia, Malawi and Angola, and to wholesalers in east and southern Africa, Australia and New Zealand. They are also exporting more and more speciality products to Europe, South America and Asia.
Sasol started manufacturing fertilisers and supplying to other companies in the early 1950’s. They eventually decided to provide directly to farmers in 1984 by creating Sasol Fertilisers, now known as Sasol Nitro, which is one of the leaders in the South African fertiliser industry.
It mainly manufactures LAN (Limestone Ammonium Sulphate) and ammonium sulphate, and nitric in Secunda where some of its facilities are located. It also produces granular fertiliser blends in Durbanville and Bellville, and liquid fertilisers in Potchefstroom, Kimberley and Endicott.
These fertilisers are either sold for retail and on a wholesale basis, and are also exported to a few selected regions. Sasol also offers a special agronomical back-up system through its agronomists and agents throughout the country, with the aim to help and satisfy its clients.
THE FERTILISER INDUSTRY IN SOUTH AFRICA AND ITS IMPACT ON THE ECONOMY
“Africa is using the least amount of fertiliser in the world” according to John Pender, a senior researcher at the International Food Policy Research Institute
In South Africa the fertiliser industry is essential as much of population relies on farming in order to sustain themselves. If the crops have little yield, the farmers will not be able to produce much food to eat and sell, which will in turn mean little income and ultimately less money to spend on seeds and fertiliser which would enhance the growth of their crops.
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Therefore, bringing down the cost of fertilisers is the key to increasing its access to rural communities; and with South Africa being prominently poor, about 40% of the population, this cost reduction is essential, whether it is the price of the products used to manufacture the fertiliser or the actual retail price.
Africa’s rich soil has been one of its biggest sources of wealth throughout the years as it contains diamonds, uranium and petroleum as well as coal deposits, oil and natural gas which are all sources of energy used to produce nitrogen based fertilisers. Therefore, there is ample opportunity for international investments to be made to the South African fertiliser industry which would ultimately enhance our economy.
However, it is important to have a balance between the private and public investments to ensure that “the pursuit of profit does not eclipse the continent’s need to feed itself” as said by Jomo Kwame Sundaram, the United Nations Assistant Secretary-General for Economic Development.
The estimated gross value of South Africa’s agricultural output in 2003/04 is of R72 000 million. The demand of fertilisers comes from the demand for food, which is quite significant in South Africa. This demand is expected to rise in the foreseeable future, which implies that there will be a more intensive food production which will increase the need for fertilisers.
The price of fertilisers is mostly affected by the international prices, the currency exchange rate and freight costs.
In 2004 the prices were as follow:
Urea R2 464/tonne
MAP R2 075/tonne
MOP R2 110/tonne
CAN R1 691/tonne
“The fertilizer industry of today is fully exposed to the world market forces and operates in a totally deregulated environment with no import tariffs or government sponsored support measures” according to fertusouthafrica.pdf (see reference page).
South Africa, having no local potassium salt deposits has to rely on imports. This affects the rest of the fertilizer industry as potassium is an essential element in the manufacturing of chemical fertilizers, and the cost of imports are higher than if it had been found locally.
We do import quite a lot of phosphoric acid from Foskor (about 725 000 tonnes every year) as well as about 400 000 tonnes of granular NPK to the Sub-Saharan Africa.
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