Dhaka wants to set up fertiliser factory in KSA

The government is looking to set up a factory at Saudi Arabia in a bid to ensure steady supply of urea fertiliser at affordable prices.

Prime Minister’s Private Industry and Investment Advisor Salman Fazlur Rahman recently sent a letter in this regard to Foreign Secretary Masood Bin Memon, a copy of which was obtained by The Business Post. 

Prime Minister Sheikh Hasina has given instructions to take steps towards setting up the factory, said the letter dated 13 November.. 

According to a foreign ministry source, discussion to set up the fertiliser factory in Saudi Arabia has already begun.

A delegation of Bangladeshi officials will soon visit Saudi Arabia to discuss the project and whether it will be financed by only Bangladesh or by both countries, said the source. The delegation will be led by Salman Fazlur Rahman. Officials of the Prime Minister’s Office, industries ministry, commerce ministry, and other agencies concerned will be part of the team.

In his letter to the foreign secretary, Salman F Rahman said Saudi Investment Minister Khalid A Al-Falih, in a discussion held on the sidelines of World Economic Forum 2021, had agreed to supply gas to the proposed factory.

The Saudi minister had also said an agreement may be signed to send the produced fertiliser to Bangladesh at a fixed price.

Urea, a white crystalline solid containing 46 per cent nitrogen, is widely used in the agricultural sector both as a fertiliser and animal feed additive. It provides the plants with nitrogen to promote green leafy growth and aids the photosynthesis process. Ensuring urea supply at affordable prices is of paramount importance for the
growth and sustainability of the agriculture sector. 

Currently, Bangladesh has to import a large amount of urea to meet local demands. The proposed factory in Saudi Arabia is expected to reduce that import dependency. 

The government has set the demand for chemical fertilisers in the current fiscal year at around 67 lakh tonnes. Out of this, urea is 26 lakh tonnes, TSP 7 lakh tonnes, DAP 15 lakh tonnes, MOP 7.5 lakh tonnes, gypsum is 5.5 lakh tonnes, Zinc Sulphate 1.41 lakh tonnes and the rest is Gypsum and Boron.

The demand for chemical fertiliser in the previous fiscal year was at around 66 lakh tonnes.