Mexico betting on own fertilizers

| Foreign Markets |

Petróleos Mexicanos (Pemex), a state petrochemical company, took over Nitrogenous Agro and will strive to reorganize artificial fertilizers production in the country.

A major investment

The overall plan of reconstruction and re-launch of the installations involves a budget of 500 million USD. The target output capacity of the enterprise is 990,000 tonnes of urea per year. Such level of production would satisfy 75% of the domestic demand in Mexico, reducing fertilizer imports, whose value now reaches 400 million USD.

Gas available on the spot

Natural gas is known to be the staple resource for the production of ammonia, used for the manufacturing of other goods used in agriculture. Thanks to an energy law reform, Mexican companies will gain access to local shale gas deposits, bringing the cost of fertilizer production down. Fertilizers will therefore become available at a lower price, benefiting Mexican farmers.

Absorbent market

In the largest country in the Middle America, agriculture is responsible for 10% of the Gross Domestic Product and employs a quarter of the workforce, or c. 30 million people. Although many regions require irrigation due to poor soil and location, Mexico remains an important producer of coffee, sugar cane and maize. This explains the rationale behind the development of domestic fertilizer manufacturing. With locally-produced fertilizers, Mexican farming will be able to continue developing and become more competitive of the global market.