Domestic fertilizer producers are worrying about the possible excess of urea and investment waste in the coming time because more urea plants are being built across the country, said the Vietnam Fertilizer Association (VFA).
The country annually needs 1.7 million tons of urea in total in the next three years, one million tons lower than the year 2002 as a result of the dominance of other fertilizer kinds such as DAP and NPK and the reduction of cultivated land caused by industrialization process.
Of the total demand, Phu My Fertilizer Plant can provide 700,000 tons while the Ha Bac Fertilizer and Chemical factory is capable of producing 150,000 tons. The remainder, thus, will be fulfilled by imports.
In the past, Vietnamese enterprises imported urea from the Ukraine, Russia or the Gulf, but now they import from China – a supply source that can provide the product at very competitive prices.
Vietnam will still need to import urea for three more years, but after that local production capacity will be big enough to meet domestic demand.
In addition to the above-mentioned plants, the Ca Mau Fertilizer Plant will provide 800,000 tons a year in the next three years. Two other plants – the 560,000 ton/year coal-run Ninh Binh Fertilizer Plant and the Ha Bac expanded project, will also become operational soon. The Ha Bac expanded plant will have the capacity of 300-320,000 tons a year.
If everything goes as planned, the total fertilizer output may reach roughly 2.4 million tons a year, much higher than the total demand. The output may even be higher if the Ca Mau or Phu My plants expand their scale of production.
Experts have said that Vietnam may think of exporting the excess volume. The fertilizer producers in Vietnam, however, will find it hard to compete with opponents in the global market, particularly those from the Middle East or Russia.
VFA officials have recalled the story of investment in steel mills as a typical example, saying that 50 per cent of the demand for steel was fed by imports years ago. But just several years later, the total capacity of domestic steel mills had doubled total demand.
Vietnam is now home to over 150 fertilizer producers with an annual capacity ranging from 500,000 tons to one million tons. (Vietnam Economic Times)
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