Thursday, 17 May 2012

Agriculture - Homegrown nitrate boost Investment needed


PHOTO by Business Day | Rod Humphris

Shannon Sherry
Nitric acid is also used to manufacture explosives for the mining industry, and the new plant will greatly alleviate the need to import the substance.
It is Omnia’s second nitric acid production facility in Sasolburg and will produce 1000t/day, or 40% more than the older plant, which was commissioned in 1983, and will also produce ammonium nitrate.
Omnia group MD Rod Humphris says the first plant was opened mainly to supply the fertiliser market. But growth in the explosives market has taken much of its production over the years and is expected to continue doing so.
He says: “It is a much- needed investment in the future of SA’s mining and agriculture sectors. Omnia’s existing plant is operating at full capacity, but the growth in the company’s markets has led to an increasing shortage of nitric acid, which has in particular restricted its use in its fertiliser business.”
Corné Louw, Grain SA’s senior economist: inputs, says the “constant supply” of nitric acid from the plant will make it easier for local users to obtain and “might make price structures better”.
“The other plant is very old. The new one will have greater efficiency and will hopefully bring lower prices.”
Louw says nitric acid can be a substitute for urea, a major fertiliser industry import. Fertiliser is often cited as an expensive farming input and a factor in high food prices.
Fertiliser Society of SA president Marius Brand says SA imports more than 50% of its nitrogen-based fertiliser, mainly in the form of urea.
“Investments from local industry players such as Omnia ... are widely welcomed. They not only create employment opportunities for local communities but the potential movement of products from this plant into the nitrogen-based fertiliser pool should increase competition and benefit the consumer,” Brand says.
Humphris says the cost of the plant is expected to come in below the initial capital budget of R1,4bn.
It is Omnia’s biggest single investment to date and Humphris says it “will have a positive impact on the group’s performance . “Updated guidance in this regard will be provided when the group’s results for the year ended March 31 are released on June 26.”
A feature of the new plant is that it will generate about 50% of the electricity needed for the entire Sasolburg site from excess steam.
German company ThyssenKrupp Uhde, a world leader in the design and construction of chemical, refining and industrial plants, supplied the technology, licences and engineering design for the new plant.
Original Article Here

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