18 February 2000

Hydro Agri to cut nitrate capacity

By Vicky Houchin

HYDRO Agri has announced plans to close 1m tonnes of nitrate capacity after reporting losses of 1999m Norwegian krone (£154m) last year.

The company believes there is about 3m tonnes of excess nitrate production in Europe due to increased regulation of fertiliser use and set-aside.

Although eight plants are being assessed for closure, it is thought that two factories would have to shut to take out that amount of production.

Insiders suggest Immingham, with a capacity of 650,000t, and Ambes in France are likely targets.

The company admits that 1200 staff could lose their jobs by the end of the year.

Executive vice president, Thorleif Enger, said the nitrogen fertiliser market had been extremely weak over the past three years, but stressed he hoped it had now reached rock bottom.

Meanwhile, urea fertiliser is becoming increasingly scarce with boats destined for the UK apparently taking cargoes to better paying destinations.

Many traders claim to know victims and say the situation is worst on the east coast.

Neil Taylor, sales and marketing manager at Usborne Fertiliser, says he is not surprised, given the strong demand for urea which is in short supply across Europe.

Risen in value

Urea prills have risen almost 30% in value since November to £105/t delivered. Granular urea is now almost unavailable.

"People are reluctant to admit its happened," says Phil Collins, of Framlingham Farmers. "But some producers, concerned they wont get deliveries, are chasing."

There is little spare nitrogen available. Some traders are still struggling to get October and November deliveries on farm, he adds.

Dalgetys Gary White says problems with shipments have been sorted. "Its not been easy. Its been a real pain getting it here."

He blames the recent price rise on a general nitrogen shortage caused by European plant closures and increased exports to America and the Far East. &#42