all aboard the fertiliser bus , page-7

Some serious money starting to flow into phosphate resources:

http://www.ft.com/cms/s/0/6e4de544-f9e5-11de-adb4-00144feab49a.html?nclick_check=1

Engro set for $1bn expansion in N Africa
By Farhan Bokhari in Islamabad

Published: January 5 2010 10:40 | Last updated: January 5 2010 10:40

Engro , the Pakistani chemicals group, is set to spend $1bn expanding into north Africa in what would be the largest overseas investment by a privately owned Pakistan company.

Asad Umar, Engros chief executive, told the Financial Times that the group expected to conclude the $1bn deal to build a phosphate fertiliser plant in north Africa this year.

EDITORS CHOICE
MCB to buy RBSs Pakistan unit for $87m - Aug-12RBS fails to conclude sale of Pakistan arm - Jan-04We want to go to invest where the rock is. The worlds largest phosphate deposits are all in north Africa. We are looking at Morocco, Algeria and Tunisia ... We are looking at all three right now, Mr Umar said.

While Pakistan produces nitrogenous fertilisers for its farmers through domestic raw material, the country does not have enough raw material for phosphate- and potassium-based fertilisers to meet the demand from a growing number of consumers among its rural population.

Almost 60 per cent of Pakistans population of 180m lives in rural areas. Agricultural output accounts for just below one-quarter of the countrys total gross domestic product, making the continued supply of chemical fertiliser a vital element for the Pakistani economy.

Analysts said Engros plans were a reflection of the growing demand for products related to the agricultural sector, where farmers are increasingly looking for ways to increase their yields faced with the effects of recent inflation that has reduced profit margins.

You would expect farmers to spend less because of growing cost of living in rural areas in recent years. But in fact, there is some evidence that they are spending more on inputs like fertilisers to improve their margins, an agricultural scientist from the government-run Pakistan agricultural research council (Parc) in Islamabad said.

In recent years, Engro has expanded into food and power businesses with investments worth about $1.6bn.

In November, the International Finance Corporation, the private sector lending arm of the World Bank, announced a loan of $50m to Engro for the expansion of its dairy business.
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