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The Fertiliser and Nitrogen Compounds Industry
In 2017 the estimated value of purchases in the fertiliser industry was R13.8bn, representing 9.5% of total purchases in the agricultural sector, according to Statistics South Africa. South Africa remains a relatively small player internationally but it has one of the largest and most sophisticated fertiliser markets on the African continent. The fertiliser industry will be affected by the delay in the 2018/19 planting season due to drought, where it has been estimated that maize plantings reduced by 20%.
The industry is highly concentrated, with Omnia and Kynoch being the largest companies in the sector. Sasol and Foskor also play a large role as they are significant providers of inputs to the manufacture of fertilisers. A number of rulings by competition authorities have had a significant effect on the sector. It may also be affected by the draft Fertiliser Bill provides for regulation concerning raw material and licensing of facilities, and land expropriation. On the other hand, it may benefit from European Union regulations to reduce the level of cadmium in fertilisers as South African fertilisers have low cadmium levels.
This report focuses on the manufacture, wholesale and retail of fertilisers and nitrogen compounds in South Africa and the factors influencing the sector’s success including competition and regulatory issues. There are comprehensive profiles of 41 companies including major players such as Sasol, Foskor and Omnia, which is building a nitro phosphate plant in Sasolburg at a cost of R690m. Profiles include those of Farmisco, trading as Kynoch, which has bought Profert, which is also profiled, out of business rescue.