Work on Qatar Fertiliser Company’s (Qafco) phase four proceeded on track as the company reported its highest production levels for ammonia and urea in 2002, mixed fortunes for exports and a drop in the net profit.

Qafco-4, scheduled for completion in first-half 2004, has been designed for a daily capacity of 3,500 tonnes for ammonia and 2,000 tonnes for urea.  This will bring Qafco’s annual production to 2 million tonnes of ammonia and 2.8 million tonnes of urea, thereby boosting ammonia’s production by 50 per cent and urea’s by 65 per cent. German multinational engineering company Krupp Uhde has the contract to build a unit each for ammonia and urea.

Meanwhile the construction of a urea formaldehyde plant, part of the Qafco-4 expansion, is nearly complete and the plant will go on stream in September 2003, according to the company. The plant will make Qafco self-sufficient in that product. Urea formaldehyde is currently imported. The project is being funded as a joint venture between Qafco and some companies from the Qatari private sector.

Qafco also said it was conducting studies to revamp its phase-3 facilities to boost production. 
Ammonia production for 2002 reached 1.41 million tonnes, up 0.7 per cent over 2001, while the figure for urea was 1.73 million tonnes, an increase of 4.7 per cent.
Qafco said it adopted a policy of attracting new customers while strengthening ties with old ones in order to counter the effects from “frequent spells of sluggish trade.”  “This enabled the company to conclude new marketing deals and renew existing ones, thus retaining a large network of distributors and ensuring that all are satisfied with the quality of Qafco’s products and services and the company’s level of commitment,” a management report said.

Quantities supplied under contracts signed in 2002 amounted to 1.15 million tonnes of urea and 200,000 tonnes of ammonia. “These deals helped to stabilise our exports and protect them from the pressures influencing the global fertiliser markets as a result of variations in supply and demand,” the report said.

Qafco’s ammonia exports in 2002 were 405,900 tonnes, down 14.4 per cent from the previous year, the company explaining that a large proportion of the product was consumed in-house as feedstock to produce more urea. During the year, ammonia prices also tumbled to an average of $110 per tonne from $135 per tonne in 2001 because of oversupply and a drop in gas prices, which led to higher production in the US.  New capacities in Malaysia, Indonesia and Trinidad also contributed to the decline.
The company’s urea exports were 1.76 million tones, up 9.5 per cent. Urea prices were relatively stable in 2002, hovering around $106 per tonne compared with an average of $107 per tonne in 2001.

Lower exports and lower ammonia prices contributed to the net profit’s decline from QR290.86 million to QR239.32 million.
Qafco chairman Abdulla Hussein Salatt said the company’s results were “excellent” considering that the fertiliser industry went through its toughest times. The performance attested to the “firm standing of Qafco and the solid foundation on which the company is built.”

Internally, the company pursued its plans for development of management systems and introduced various upgrades to its existing safety, quality and environmental management systems to ensure compliance with the latest internationals standards.