Vietnam: Expansion of the Domestic Urea Industry

The Vietnamese Ministry of Industry and Trade estimates that the fertilizer market will see considerable changes due to export tax reductions in the Chinese market while fertilizer prices continue rising in the world market in June.

Urea fertilizer demand currently ranges between 2 to 2.2 million tonnes per year. It is expected that Viet Nam would be able to produce 3.22 million tonnes of urea fertilizer a year by 2015.

The country has two urea fertilizer factories including Ha Bac Nitrogenous Fertilizer, with a production capacity of 180,000 tonnes per year, and the Phu My Fertilizer Company, with a capacity of 740,000 tonnes per year, which had been expanded to 800,000 tonnes since the fourth quarter of 2010.

Fertilizer supply currently stands at between 920,000-980,000 tonnes a year in comparison with actual demands of 2-2.2 million tonnes per year.

According to the Viet Nam Chemistry Group (Vinachem), nitrogenous fertilizer, to be produced by the Ninh Binh Plant, will reach 560,000 tonnes per year by November.

The Ca Mau Fertilizer Plant, with a capacity of 800,000 tonnes per year, is set to be completed by the end of this year while the development of the 560,000-tonne Cong Thanh Fertilizer Plant will be kicked off later this year.

By building more plants between 2010-14, urea output will rise to over 3 million tonnes by 2015.

It is predicted that, by 2015, the domestic urea fertilizer market share will experience much competition between local manufacturers and importers.

Last May, the IFA (the roof organization of the fertilizer industry), estimated that worldwide 58 new urea plants are expected to come on stream between 2010 and 2015, increasing capacity by 44 million tonnes N, to 224.5 million tonnes in 2015.

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