Today.Az » Business » SOCAR`s carbamide plant promises huge benefits
19 May 2017 [18:00] - Today.Az

By Azernews

By Sara Israfilbayova

SOCAR`s carbamide plant, which will play a key role in strengthening of Azerbaijan`s economy through boosting the country`s export potential and its non-oil sector, is close to completion.

The total cost of the project is 750 million euros. Approximately 95 percent of the project work, performed by the general construction contractor, Samsung Engineering, has been completed. The engineering work and procurement of equipment have been completed by 100 percent, construction work - by over 80 percent, civil engineering work - by over 90 percent, installation of equipment - by 70 percent, Trend reported.

The carbamide plant will start bringing profits in seven to eight years after its commissioning, Plant's Director Khayal Jafarov said.

Jafarov also noted that Azerbaijan has managed to reduce the construction cost of the plant to €700-750 million through optimization of the expenditures. The cost was previously estimated at the level of €900-920 million. South Korea’s Export-Import Bank has allocated €500 million for the construction of the plant. It is expected that the plant will make a profit of $100 for each ton of carbamide.

The commissioning of a carbamide plant will cease dependence of Azerbaijan on the import of nitrogen fertilizers, and it can be confidently asserted that in 2018 carbamide will become one of the weighty items of Azerbaijan's non-oil export.  Production of the first products at the carbamide plant is expected in the first quarter of 2018.

Besides, this will allow to save foreign currency reserves. Over the past five years, Azerbaijan has spent $295 million on the purchase of mineral fertilizers from abroad. The State Customs Committee of Azerbaijan reports that only in 2016 the cost of the purchased fertilizers hit $51.9 million.

Today, Azerbaijan covers the domestic demand for fertilizers through imports through the state leasing company Agroleasing. Although local farmers receive mineral fertilizers at a subsidized cost (the state pays 70 percent of the cost of fertilizers), the cost of fertilizers increases every year.

Azerbaijan has always enjoyed good advantage for establishing its own carbamide production. The raw material for carbamide production is gas, and the country  possesses large reserves of natural gas, which is the key to success in the implementation of this project.

Production at the plant will be environmentally friendly. The entire control system will be fully automated and will meet the highest requirements, including in terms of safety.

The production capacity of the plant will be about 2,000 tons of carbamide per day, or about 650,000 tons per year, and the current demand for carbamide in the country is about 150,000-200,000 tons per year. Consequently, the plant is able to cover this need and the remainder, about two-thirds of the output, will be exported.

The main export direction will be Turkey, as the neighboring country annually imports 1.5-1.8 million tons of carbamide per year. Taking into account the fact that the Baku-Tbilisi-Kars railway will be launched this year, it will be possible to supply carbamide quickly and inexpensively to the Turkish market.

The carbamide plant will strengthen the non-oil sector of Azerbaijan, and due to the localization of production will allow to spend the saved currency for other needs. It is extremely important that significant volumes of carbamide production contribute to the increase of the export potential of the country, which will bring additional revenues to the budget and give impetus to the development of the non-oil sector.

Finally, the implementation of this project is of great importance in terms of creating new jobs. Roughly 350-400 people will be employed in the plant.

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