Europe’s phosphate industry

PHOSPHATE INDUSTRY REPORT

Europe’s phosphate industry

Leading EU phosphate and NPK fertilizer producers are profiled, including EuroChem, Fertiberia, Grupa Azoty, ICL, Prayon and Yara.

ICL Amsterdam NPK production plant.

Yara International is Europe’s leading phosphate rock and NPK producer. The company’s Siilinjärvi mine in Finland – the EU’s only phosphate mine – produces around one million tonnes of phosphate rock concentrate and 300,000 tonnes of phosphoric acid annually.

Yara’s combined European operations provide 5.2 million tonnes of NPK production capacity (Table 1), more than 80 percent of the company’s total global NPK capacity of 6.2 million tonnes. This is divided between six sites in four European countries: Siilinjärvi and Uusikaupunki in Finland, Glomfjord and Porsgrunn in Norway, Montoir in France and Ravenna in Italy.

Yara is a market-leading producer of NPKs, selling 5.9 million tonnes globally in 2018. That volume placed Yara well ahead of competing NPK producers such as Coromandel, Gresik, Iffco and PhosAgro. The NPK market is a lucrative one for Yara. The company’s compound NPK products, marketed under the YaraMila brand name, sell at a price premium of around $86/t relative to commodity blends. This total does, however, also include premiums generated by the company’s calcium nitrate, fertigation and micronutrient product ranges.

Premium products able to deliver high margins – including compound NPKs and micronutrient (YaraVita) products – feature strongly in Yara’s fertilizer portfolio, being responsible for around two-fifths of global sales volumes in 2018. These value-added products generated a total premium in excess of one billion dollars – versus the commodity fertilizer alternatives – according to Yara calculations.

Increasing the capacity to produce and sell premium products is an integral part of Yara’s future growth strategy. This has been partly delivered by expanding European NPK output. An NPK expansion at the Uusikaupunki site in Finland came on-stream in the third quarter of 2016. Further NPK capacity additions in Norway – by 70,000 tonnes at Porsgrunn and 50,000 tonnes at Glomfjord – were also completed during 2018.

EuroChem: a focus on quality

EuroChem Group operates three phosphate plants with the combined capacity to produce around 4.3 million tonnes of NPK products, phosphate fertilizers and feed phosphates. The Group owns three NPK/ phosphate operations within or adjacent to the EU market,

Phosphorit is a leading Russian producer of phosphate fertilizers and feed phosphates. It is located close to the Baltic coast at Kingisepp, northwest Russia, adjacent to the new EuroChem Northwest ammonia plant.

Located in Belgium with port access, the large-scale EuroChem Antwerpen production complex consists of a number of production units for nitric acid, NPK, AN/ CAN and nitrophosphoric acid.

EuroChem subsidiary Lifosa is one of the EU’s leading phosphate fertilizer producers. Located in Kedainiai, Lithuania, the company, which dates from 1959, manufactures:

• Technical-grade sulphuric acid
• Diammonium phosphate (DAP)
• Phosphoric acid
• Water-soluble monoammonium phosphate (MAP) crystals
• The feed phosphate MCP (monocalcium phosphate).
• Aluminium fluoride (AlF3 ).

EuroChem has channelled more than $210 million of investment into Lifosa over the last 10 years. Much of this capital expenditure has been targeted at establishing water-soluble phosphate production capabilities. A new, highly-efficient, $16 million water-soluble fertilizer unit opened in October 2018. The new 25,000 t/a capacity plant produces water-soluble urea phosphate. Its completion followed the commissioning of a 30,000 t/a capacity water-soluble monoammonium phosphate (MAP) production unit at Lifosa in 2017.

Lifosa produced 805,000 tonnes of DAP and 165,000 tonnes of feed phosphates in 2017 and is recognised for its high-quality products. The company is well-placed for the export market, having access to the ice-free port of Klaipeda on Lithuania’s Baltic coast, some 210 kilometres away from its Kedainiai operations.

EuroChem Group acquired Lifosa in 2002. The purchase helped secure Lifosa’s longterm future and competitiveness by providing access to a supply of high-purity, low-cost igneous phosphate (apatite) rock from Euro-Chem’s Kovdorskiy mine at Kovdor in Russia’s Kola peninsular. In 2015, EuroChem announced plans to invest $104 million in expanding Kovdorskiy’s production capacity by 948,000 t/a, raising total rock concentrate capacity to 3.4 million t/a by 2018.

Lifosa has been producing feed phosphates for nearly two decades. The company’s original dicalcium phosphate (DCP) plant dates from 2001. This was followed by a monocalcium phosphate (MCP) unit in 2002 and a mono dicalcium phosphate (MDCP) unit in 2004.

Prayon: water soluble phosphates

Belgium’s Prayon Group’s is an acknowledged leader in wet-process phosphoric acid production globally. The company was founded in 1982, although its roots in Belgium’s Liège region stretch back more than 100 years. Currently, some 50 percent of phosphoric acid production sites globally use Prayon technology while 70 percent use Prayon equipment.

The Group brings together over 20 companies located in more than 10 countries, employing 1,450 people and generating a turnover of e500 million. The company is jointly owned by OCP Group and Société Régionale d’Investissement de Wallonie (SRIW).

Prayon is also a world-leading producer of high-purity phosphate chemicals for the fertilizer, detergent, food additives and technical markets. The company’s production arm manufactures purified phosphoric acid (PPA) using a proprietary solvent extraction process. This acid is available in different grades and concentrations for use in the production of a wide range of technical- and food-grade products.

Prayon’s production sites in Engis and Puurs, Belgium, have the capacity to produce 250,000 tonnes of P2 O5 per year. Emaphos, a joint venture between Prayon, OCP and Chemische Fabrik Budenheim (CFB) located at Jorf-Lasfar, Morocco, provides a further 150,000 tonnes of P2 O5 capacity.

Prayon manufactures over 300,000 tonnes of phosphate salts each year from Engis and Puurs in Belgium, Les Roches de Condrieu in Lyon, France, and Augusta, Georgia in the US. Production output includes sodium, potassium, calcium, ammonium and aluminium phosphates. Many of these products are marketed under the Europhos brand name and targeted at food and technical/industrial markets.

Prayon has also been manufacturing horticultural phosphates in Europe for over 40 years, and markets a comprehensive range of water-soluble fertilizers. These were consolidated under the single Hortipray® brand in 2011. The Hortipray® range of fertilizer products is designed for application to fruits, vegetables, flowers and plants by fertigation, and are recognised for their purity and high solubility. They include:

• micronutri Fe
• MAP & MKP anticalc
• Pbooster
• Monoammonium phosphate (MAP)
• Monopotassium phosphate (MKP)
• Potassium nitrate (NOP).

ICL Fertilizers

ICL is one of the world’s largest fertilizer producers. The Israeli-headquartered company provides farmers, growers and distributors on five continents with a wide protfolio of high-performance plant nutrition products, including: potash, Polysulphate, phosphate fertilizers, phosphoric acid, specialty fertilizers, phosphate rock and tailor-made compound fertilizers.

ICL operates two European NPK production plants located in Amsterdam in the Netherlands and Ludwigshafen in Germany. Combined, both sites provide the company with 850,000 t/a of NPK production capacity within the EU market.

ICL’s Amsterdam site has a total nameplate capacity of 550,000 tonnes for NPK production, divided between 450,000 tonnes of granular and 100,000 tonnes of powder products. The Ludwigshafen plant, although smaller, still has an impressive nameplate capacity of 300,000 tonnes.

ICL is able to produce over 80 different grades of NPK fertilizers from its Amsterdam and Ludwigshafen facilities. ICL also has two mines in Europe: potash is mined at Súria in Spain, while the Boulby mine in the UK is the world’s first and only polyhalite mine.

ICL markets polyhalite, a soluble fertilizer containing sulphur, potassium, magnesium and calcium, through its Polysulphate® portfolio of products. These includes PKpluS® , a range of polyhalitecontaining, granular PK precision fertilizers. These balanced formulations contain phosphorus and potassium, without nitrogen (N), supplemented by a wide range of secondary nutrients, including sulphur, magnesium and calcium.

Grupa Azoty targets Poland and Germany

Grupa Azoty Police, a subsidiary of Grupa Azoty, is Poland’s largest manufacturer of phosphoric acid, phosphates and NPK fertilizers, making it a significant European producer. The company is based in Police in the country’s southern Lesser Poland province. Its main commercial products include:

• MAP, DAP and NPK fertilizers, incorporating secondary nutrients (sulphur, magnesium) and micronutrients
• A granulated NS fertilizer comprised of ammonium sulphate, urea and magnesite
• Urea
• Liquid ammonia
• White titanium dioxide-based dyes.

Grupa Azoty Police’s fertilizer unit is the largest within the company, both in terms of production volumes and revenues. Its NPK and DAP products – POLIFOSKA® and POLIDAP® – are market-leading brands in Poland. Its fertilizer products are also sold in Europe, South America and Africa. The unit produced just over one million tonnes of compound fertilizers in 2018, accounting for just under 60 percent of company revenues. This was supplemented by 326,418 tonnes of phosphoric acid production.

Grupa Azoty Police expected to complete a $18.5 million (PLN 67 million) upgrade project at its phosphoric acid unit by June last year. This involves replacing the existing DA-HF production process with new technology licensed by Prayon. This change should enhance production efficiency and improve output quality.

Grupa Azoty Police purchases its phosphate rock under contract or on the spot market. These purchases are largely African-sourced and mainly from Arabic countries in the north of the continent. In February last year, the company entered into a two-year contract with Ameropa and Senegalese-based supplier Somiva to supply low-cadmium phosphate rock sourced from Senegal. This contract runs until February 2021.

In April 2018, Grupa Azoty signed a three-year phosphate rock supply agreement with Morocco’s OCP in a deal thought to be worth around $103 million (PLN 350 million). This contract runs until December 2020. OCP previously agreed to supply Grupa Azoty with one million tonnes of phosphate rock in 2017 in a similar but shorter-term $35 million (PLN 135 million) deal.

Polish phosphate rock imports have been on the rise in recent years. Trade statistics show the country imported 1.2 million tonnes in 2017, some 56 percent of this supplied by Morocco. Poland imported 674,835 tonnes of Moroccan phosphate rock in 2017, up from 541,279 tonnes in 2016.

Fertiberia adapts to market needs

• Fertiberia has eight million tonnes of production capacity for chemical intermediates and end-products. It operates 16 production centres located in four countries – ten in Spain, two in Algeria, three in Portugal and one in France. The company produced just over three million tonnes of products and raw materials in 2018, a rise of more than two percent on the previous year. These included
• 1,062,000 tonnes of nitrates
• 676,000 tonnes of nitric acid
• 531,000 tonnes of ammonia
• 342,000 tonnes of urea
• 282,000 tonnes of nitrogen solutions
• 125,000 tonnes of NPKs

• 290,000 t/a of complex NPK fertilizers
• 290,000 t/a of diammonium Phosphate (DAP)
• 150,000 t/a of monoammonium Phosphate (MAP)

However, Fertiberia ceased manufacturing DAP and MAP at Huelva in 2013, citing high production costs, having previously ended phosphoric acid production at the site three years previously. The company now sources the phosphoric acid needed for NPK production from international markets. It reported a large annual rise in the cost of this raw material (above 20 percent) in 2018.

The production changes seen at Huelva in recent years were part of a restructuring plan by Fertiberia to make the site a central hub for NPK production.

However, 2018 was a difficult year for the Huelva plant, according to the company: “Production of compound fertilisers fell by 17 percent compared to the previous financial year, affected by operational problems and by a lower than forecast sales volume.”

Fertiberia’s NPK output has in fact declined by around one-third in the last three to four years, having previously been above the 188,000 tonne production level in 2014 and 2015.

In addition to producing NPKs at Huelva in Spain, Fertiberia’s Portugese subsidiary ADP Fertilizantes has the capacity to produce 400,000 t/a of NPKs and 170,000 t/a of superphosphates at its Setúbal plant.

Fertiberia has been diversifying and expanding its product portfolio. The company launched a new line of NPK fertilizers in 2016 as part of the Fertiberia Advance product line. The company also introduced a new NPK product SulfActive in 2018, part of its CLASSIC range. This new low-chloride NPK formulation contains six basic nutrients and is “optimised to activate the absorption of nutrients by plants” according to Fertiberia.

Adapt to survive and thrive

The European phosphates industry has undergone further consolidation and market shifts over the last decade (Fertilizer International 443, p45; Fertilizer International 485, p43). The industry had been in steady retreat for several decades due to the combination of large-scale, low-cost global competition and the region’s reliance on imported phosphate rock.

The trend for consolidation and closures in Europe has continued with Fertiberia notably ending DAP and MAP production at its Huelva plant five years ago.

The need to secure a competitively priced supply of phosphate rock also remains a challenge for non-integrated European producers. Grupa Azoty has, however, been able to address this by entering into long-term supply agreements with OCP and Ameropa.

Looking ahead, the introduction of stringent cadmium limits, as part of the new EU fertilizer regulation, has the potential to disrupt phosphate rock imports into Europe and increase costs, with lower cadmium Russian rock most likely to gain at the expense of higher cadmium rock from North and West Africa. The initial introduction of a higher cadmium limit (60 mg/kg P2 O5 ) could be achieved without major disruptions to phosphate rock supply, according to the European Commission, although this is disputed by some suppliers.

Europe’s major phosphate producers are increasingly focussed on higher-value segments such as compound NPKs, water-soluble fertilizers and feed phosphates. The shift to NPK production has been a particular popular and successful strategy for European phosphate producers, with EuroChem being the latest company considering a move away from DAP to NPK production.

The switchover from DAP/MAP to NPK production seen in Europe is part of much wider global trend, as margins for the former weaken and demand for the latter grows. Changing their product mix in this way has provided Europe with a strong position in the growing and higher-margin NPK market. Indeed, EU phosphate producers currently account for roughly half of global NPK exports, most of this coming from Belgium, Norway and Finland.

Author’s note

The European NPK fertilizer operations of Rosier are not covered by this article. These include Rosier’s two NPK plants at Moustier in Belgium and Sas Van Gent in the Netherlands. Fertilizer International hopes to profile these in a future edition of the magazine.