Romanian Fertilizer Industry Association

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					                                              Popa Oliviu
                        „ Nitrofosfor ”

         Romanian Fertilizer Industry Association




                               Tel/fax: 0040 21 2205670
Splaiul INDEPENDENTEI
                               Mobil: 0040 744 376807
Nr. 202 A Sect. 6
                               E-mail: nitrofosfor@rol.ro
Bucuresti - ROMÂNIA                     oliviu@pcnet.ro
    The Chemical Fertilizer Industry in Romania represents a branch
of the national economy that is essential for the sustainable
development of agriculture; it was set up in order to supply Romanian
agriculture with fertilizers necessary for agricultural production, to
maintain the fertility of the soil and to maintain its production
potential for the future generations. Indirectly, the Fertilizer Industry
contributes to supply the required food products to the population.

    Having the market and, to a great extent the basic raw material
(natural gas) ensured, Romania has developed a mineral fertilizer
industry that has kept pace with the development of similar industry at
international level.

     All fertilizers, as well as some of the soil amendments necessary
 for agriculture have been ensured by the Fertilizer Industry in
 Romania. The surplus was exported.
         The chemical fertilizer industry is, practically, completely
                               privatized.

    S.C.Amonil S.A. from Slobozia is 100% privatized. It has an installed
production capacity of 400,000 t of carbamide, 300,000 t of ammonia nitrate
(AN) and 100,000 t of liquid fertilizers UAN in function and 300,000 t of
carbamide in conservation.

    S.C. Azomures S.A. is 82% privatized. It has an installed production
capacity of 300,000 t of carbamide, 100,000 t of NPK in 100% P2O5,
300,000 t of AN or pearled nitro-limestone (CAN), 450,000 t of AN or
granulated CAN and 100,000 t of UAN, all in service.

    S.C. Azochim S.A. is 81% privatized. It has an AN or granulated CAN
plant of 300,000 t per year which operates on an occasional basis.

    S.C. Combinatul de Ingrasaminte Chimice (Chemical Fertilizer
Combine Groups of Enterprisers) from Navodari is 100% privatized. After a
few years of reorganization, a plant of 50,000 t of simple superphosphate
was put into service again.
    S.C, Nitramonia S.A. from Fagaras is 100% privatized. The plant of
100,000 t of AN can produce both fertilizer and porous ammonia nitrogen
grade.

    S.C. Petrom-Doljchim S.A. from Craiova is 100% privatized. It is
endowed with an AN plant of 300,000 t and an carbamide plant of the
same capacity.

    S.C. Sofert S.A. from Bacau is 100% privatized. It has an installed
capacity of 400,000 t of carbamide and one of 100,000 t of NPKs as 100%
P2O5.

     S.C. Turnu S.A. from Turnu Magurele is privatized and it has an
installed production capacity of 500,000 t of carbamide, 300,000 t of AN
or CAN and 100,000 t of NPK as 100% P2O5.

     All trading companies mentioned above also produce fertilizers with
foliar assimilation, under their own licenses, in large quantities that exceed
the requirements of Romanian agriculture.
Figure 1 presents the evolution of production in the last six years. The dot
lines represent the extrapolation of 2003 based on the deliveries in the first
semester of the year 2003.

                                             Fertilizer production

                     1800
                                                                N2    P2O5     K2O      Total

                     1600



                     1400


                     1200



                     1000
     mii. to. s,a,




                     800


                     600


                     400


                     200


                       0
                        1996   1997   1998     1999    2000    2001     2002         2003       2004
                                                       anul


  Fig, 1
The causes of the drastic decline in production are, to a great extent, the
same for all countries in the Central and Eastern Europe:
• The destruction of the organized market as a result of the collapse of
  CAER organization and of the good exchange between the Central and
  Eastern Europe,
• The recession of the external market of fertilizers,
• The international embargo on trade as a consequence of the war in the
  Gulf region and in Yugoslavia. Romania had very good connections
  with the market in the former Yugoslavia. The war in this country
  brought damages of over 3 billion dollars to Romania,
• The difficulties encountered by the companies that produced fertilizers
  in obtaining natural gas,
• The tendency of the neighboring countries to protect their own
  production by different barriers,
• The penetration on Romanian market of products from the countries
  that have raw material (natural gas) at very low prices,
• Drastic decrease of internal consumption of chemical fertilizers.
 Thus, the functional production capacities have been excessively used, as
 presented in figure 2.
                   Gradul de utilizare al capacitatilor de productie
                                    N, P2O5 si K2O
                                                           N2   P2O5   K2O
           70




           60




           50



         % 40




           30




           20




           10
Fig. 2
            1996    1997   1998    1999   2000   2001    2002   2003    2004
                                          Anul
     Figure 3 presents the deliveries of chemical fertilizers to agriculture
     from own production.

                                 Livrari de îngrasaminte la intern

    600


    500


    400
                                                      total
    mii to




    300
                                 azot
    200
                      fosfor
    100


             0
             1996   1997       1998     1999   2000     2001   2002   2003   2004
                                               anul

Fig. 3
                            Table I


  Area of the Number of     %    Cultivated   afferent
       farm     farms     of the area (ha)      %
        (ha)               total
       <0.25   409,806    10.38     30764      0.29
    0.26÷0.5   180,856     4.58     50512      0.48
      0.51÷1  1,021,559 25.88      554893      5.27
    1.01÷1.5   350,684     8.89    367861      3.50
      1.51÷2   316,392     8.02    484394      4.60
      2.01÷3   380,680     9.65    777859      7.39
      3.01÷5   573,384    14.53   1736357     16.50
     5.01÷10   424,033    10.74   2175058     20.67
    10.01÷20   288,727     7.32   3014800     28.64
    20.01÷50      26      0.0007      607      0.01
   50.01÷100      23      0.0006     1567      0.01
  100.01÷200      24      0.0006     3860      0.04
  200.01÷500      43      0.0011    14640      0.14
 500.01÷1000      53      0.0013    38729      0.37
1000.01÷2000      85      0.0022   128381      1.22
    >2000.01     225      0.006   1154790     10.97
       Total  3,946,630 100.00 10525073       100.00
Average area      2.67 ha
 of the farm
The causes that resulted in the decline of the internal consumption have been
mainly the following ones:

     1. The division of the agricultural lands by applying the succession right
        to property. Over ten million hectares of agricultural land have been
        divided into 48 million parcels of land as presented in the following
        table:
     2. Over two-thirds of the farms have up to three hectares of agricultural
        land that ensures the subsistence of the respective families.
     3. Subsequent to the division of agricultural land, the new owners did
        not have the necessary and sufficient knowledge about fertilizers and
        the technologies of using them in agriculture according to the
        structure of the land and culture.
     4. Many people who got their lands back are living in the cities and,
        thus, they either left their land uncultivated or have cultivated it
        without applying some adequate technologies.
     5. The lack of financial resources led small owners to use cheaper
        fertilizers, namely those with nitrogen, to the detriment of those with
        phosphorus. This led to the alarming situation presented in the
        graphic of figure 4.
  Briefly, the causes of the main malfunctions in fertilizer
  industry are the following ones:

1. Difficulties in covering the requirement of raw materials,
  mainly natural gas, especially in the cold season.

2. Low purchasing power of consumers in agriculture.

3. Fluctuation of demand and especially of prices on the
 international market, recorded in the last years, which caused a
 reduction of the Romanian export of fertilizers.
                        Raportul N2/P2O5

7

6

5

4

3

2

1

0
1996     1997   1998   1999   2000    2001   2002   2003   2004
                              anul

Fig. 4
                Future evolution

    According to the information recorded by the Ministry of
Agriculture, in the future about 14,500,000 ha should be fertilized,
of which 10,000,000 ha. are arable land. Depending on these areas
and on the purchasing power of the agricultural producers, the
development of the internal consumption of fertilizers (thousand
tonnes nutrients AS) is the following :

         Forecast Fertilizer Demand in Romania: 000 t.

                 Total
       Year              Nitrogen Phosphorus        Potassium
                Quantity
       2003       650         480       140            30
       2004       850         550       250            50
       2010      2 200      1 100       800            300
              Conclusions
        - The fertilizer industry is a necessary branch of the Romanian
industry because of its role in supporting the agriculture. The demand of
fertilizers for agriculture in the perspective of 2004 and 2010 amounting
to 2,100,000 tonnes nutrients/year can be achieved by staying in
operation and modernizing the existing plants. The fertilizer producers
are well located in the territory and they can provide the whole
requirement of nitrogen and about 70% of the demand of fertilizers with
phosphorus.

    - The policy of reorganizing the chemical fertilizer sector aims at
reducing the energetic consumption, increasing the competitiveness and
complying with the European Norms of Environmental Protection and
modernization of plants that are kept in operation.

     - The Fertilizer Industry in Romania meets the main conditions for
the integration in the European Union, and the compliance with the
European Norms for Environmental Protection is going to be carried out
in several stages.