India's IFFCO partners to build Canada nitrogen plant
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - The Indian Farmers Fertiliser Co-operative (IFFCO), one of India's largest fertilizer makers, plans to build a C$1.2 billion ($1.22 billion) nitrogen plant in Eastern Canada with a Canadian partner to cash in on strong North American demand.
IFFCO and La Coop federee said on Tuesday they plan to begin construction in the province of Quebec in two years, provided they can raise the remaining 45 percent of the capital cost and pending a feasibility study. They hope to start producing urea, a nitrogen-based fertilizer for crops, in 2017.
The project is the latest in a series of announced plans for additional nitrogen capacity in North America, as high crop prices support demand and with new technology unlocking the key ingredient natural gas from shale rock.
IFFCO and La Coop will face stiff competition from Norway's Yara International ASA (YAR.OL: Quote) and Canada's Agrium Inc (AGU.TO: Quote) (AGU.N: Quote), both of which plan to expand their nitrogen output.
In the near term, a surplus of nitrogen production is unlikely, considering that the United States is a net importer of the fertilizer, said Claude Lafleur, CEO of La Co-op, in an interview.
"The (crop) production in North America is increasing also, and corn needs a lot of nitrogen," Lafleur said. "At the end of the day, if everybody goes and builds new facilities, it could lead to a glut, but we don't see that in the next 10 years."
The U.S. imports more than two-thirds of its urea production, but still, if all the rumored projects became reality North America would quickly have a surplus, said David Asbridge, president of NPK Fertilizer Advisory Services.
"Even if we have three, possibly four new plants in North America in the next five years, that's going to be a little price-depressing," Asbridge said. Continued...