AGRI-NUTRIENTS

The focus areas include a more effective Agri-Nutrients business strategy, fully focused research and development programs, sales and supply chain and talent attraction. This transformational initiative allows for more focus, resilience and agility in SABIC’s agi-nutrient business and will pave the way for the new company to achieve a leading position in the industry locally and globally.

SABIC AN is a world-class producer and marketer of Nitrogen and Phosphates, which continue to be the core pillars of its strategic focus. SABIC AN’s leading cost position and operational excellence has contributed to robust financials, which now enables the company to develop additional growth opportunities beyond commodity nitrogen fertilizers across the value chain. SABIC AN is also committed to becoming a front-runner in low carbon ammonia and differentiated products through its strong research and development capabilities, and will continue to maintain a strong pipeline of innovative products and IPs.

This year, we supplied over 7 million tons globally, processed over 4,500 orders and covered over 150 international routes via our well-coordinated production and supply chain systems. We continuously assess our short and long-term targets through a well-established process of key performance indicators (KPIs) and scorecard monitored and reviewed by the management teams and senior executives that also allows us to closely monitor industry trends for any immediate and long-term impact on our existing strategy.

Future investment is centered on establishing a varied portfolio of high-tech enhanced efficiency fertilizers, expanding the company’s global production footprint while reducing the carbon footprint of existing products, and anticipating end-users’ evolving needs.

FINANCIAL HIGHLIGHTS

Agri-nutrients revenues amounted to SAR 18.23 billion, an increase of SAR 6.04 billion or 50% compared to 2021, driven by an increase in sales volumes by 9% and increase in average sales prices by 37%.

OPERATING HIGHLIGHTS

In 2022, we inaugurated a new field to test smart agriculture; using sensors in our technology center, we brought the latest technologies in Artificial Intelligence into agriculture. This will proactively predict nutrient requirement, pest control and water management for sustainable agriculture.

Our energy-efficient operating assets have led to initiatives to reduce Scope 1 & 2 emissions from our assets. Meanwhile, R&D is focused on developing sustainable products to reduce the Scope 3 emissions and improve crop yields. Additionally, we are looking into collaborating with various farmers and stakeholders to bring technology to their farming needs.

We secured a new urea-supply agreement of 100 KMT to South Korea and succeeded in expanding the US market by adding the East Coast market to the existing traditional market of New Orleans and West Coast.

In our phosphates segment, we signed two Memorandums of Understanding (MOUs) with Indian customers, NFL and CFCL; this will ensure growth of historical relations through future supply of phosphate fertilizers. We continued to expand our strong presence in the Americas, building on 2021 achievements and increasing sales by 7% year-over-year (YoY).

DIFFERENTIATED PRODUCTS

We are committed to being a front-runner in low carbon ammonia and differentiated products through our strong research and development capabilities. Recently, we announced innovative products such as BCRU and UCS, with the potential to mitigate some of the sustainability issues around fertilizers use. We also have the distinction of being among the first in the industry to be certified for blue ammonia that is ready for commercial use.

BiOWiSH Technology: Joint Development agreement (JDA): SABIC successfully completed a year-long technical evaluation of BiOWiSH^® Crop Liquid technology coated on SABIC’s urea in nine countries across five continents and nine different crop types. We have constructed a joint development platform that advances further customizations across a range of high-efficiency fertilizers, serving as a foundation for future products and other agronomic innovations.

New Leaf Symbiotics Technology: We signed a joint-development agreement with NewLeaf Symbiotics in March 2022 to supplement SABIC’s portfolio. This opens possibilities to move into commercializing broad acre row crops as SABIC believes NewLeaf is positioned to move into this area.

Urea: In an effort to ensure continued food security in Saudi Arabia, we have aligned with the Ministry of Environment, Water and Agriculture to support local market and increase urea allocation to 15% to accommodate demand increases.

Ammonia: The world’s first commercial shipment of accredited independently certified blue ammonia was dispatched from Saudi Arabia to South Korea. The shipment, consisting of about 25 KMT of accredited “cradle to gates” blue ammonia, is part of a collaboration between SABIC Agri-Nutrients and Saudi Aramco spanning the entire value chain.

Phosphates: We supported local markets by providing an uninterrupted supply of phosphate fertilizers at stable prices when global phosphate market prices rose. We sold 190 KMT, a 25% increase compared to 2021, and supported food security in key markets through contract renewals. We also managed to introduce light DAP to Pakistan via two cargos totaling 56KT, reestablishing our presence in the country.

NPK: In 2022, we worked on three products. NPK 10-26-26 was used on a wide range of crops. NPK 11-29-19+6S & 13S, mainly used for tuber crops and other fruits that include potatoes, onions, and watermelon, provides a solution for farmers providing balanced primary and secondary nutrients to the plant.

Nutrient Plus: Among our new products, we introduced Zinc-Coated Urea (designed to address the zinc deficiency across all soil types), Humic Acid-Coated Urea (SABIC Granular Urea coated with high performance Humic Acid along with bio-stimulants that enhance the nutrients' effectiveness in soil and improve the health of rhizosphere to support better crop growth and yield), and Stabilized Urea (reduces nitrogen loss through ammonia volatilization, making more nitrogen available for the plants).

OUTLOOK

As the world population hit eight billion in 2022, our position as a dependable producer of agri-nutrients for export to the global market presents opportunities. The market outlook for 2023 remains positive with robust agricultural and energy sector fundamentals supporting end-user fertilizer demand. There is a growing global push to replenish grain stocks, safeguard crop yield against adverse weather, and control escalating food prices. This will require sustained fertilizer applications.

However, affordability is a key focus: global crop prices are leveling out while agri-nutrients values continue to rise. Demand destruction and changes in application rates–particularly for smallholder farmers in developing markets–presents a forward risk.