BLEAK OUTLOOK FOR FERTILISER PLANT

Press, 20 April 1979, Page 6

BLEAK OUTLOOK FOR FERTILISER PLANT

Doubts that Professor T. W. Walker, professor of soil science at Lincoln College, has about plans to use Maui gas to manufacture nitrogen fertiliser have been reinforced by information that has come to hand from the United States.

It seems that New Zealand will be going into the production of a commodity, for which there is only limited use in this country, and which is likely to be in oversupply on a world basis.

“Can we really justify using Maui gas to make nitrogen fertilisers?” This was the question that Professor Walker asked in an

editiorial in a recent issue .of the “New Zealand Fertiliser Journal.”

The plant that is envisaged will produce about 80,000 tonnes per year of fertiliser nitrogen. This is more than four times New Zealand’s current consump - tion. Professor Walker doubts whether this fertiliser could compete in price with the Japanese, German, or even Australian product. He is concerned about the. prospect of a heavy' subsidy being necessary' , to stimulate home use.

Since writing the editorial. Professor Walker’s views have been reinforced by information from the United States. He

has received word of an address by G. C. Sweeney, a fertiliser specialist to the United States Fertiliser Institute, reported in "The Oil and Gas Journal” of February 26, 1979. Mr Sweeney stated that, without an unexpected strong growth in. demand for nitrogen, products in. the next two to three years, the current depressed state of the American ammonia industry is likely to continue. Over a quarter of their 21 million ton capacity is idle. This idle capacity alone is .over 60 times New Zealand’s planned production and includes some of the larger, newer plants. An increased volume of imported ammonia at prices lower than the United States production costs in many cases is one of the factors responsible for the present situation.

The major pressure is coming from the growing shipment of nitrogen products from the oil industries of Mexico, the U.S.S.R., and Trinidad. Action on the part of the United States Government to restrict such imports is unlikely.

Professor Walker suggests that this overproduction is one reason why the plant said to have been purchased cheaply for New Zealand was never erected in the United States. Perhaps it was not such a good bargain after all.