From Over 80% Imports to Self-Sufficiency: Petrobras Leads Brazil’s Fertilizer Push

In a significant move, Petrobras has decided to breathe new life into its long-dormant fertilizer plant. The state-owned oil company’s board of directors gave the green light to resume work on the Nitrogen Fertilizer Unit (UFN-III) in Três Lagoas, Mato Grosso do Sul.

This decision marks a shift in Petrobras’ strategy, aligning with the federal government’s push to boost domestic fertilizer production. The project, which had been on hold since 2014, is now back on track with a hefty investment of R$3.5 billion ($625 million).

Brazil, the fourth largest agricultural producer in the world, is indeed highly dependent on fertilizer imports, with approximately 87% of its fertilizer needs being met through imports.

That is why the Brazil’s Senate Agriculture Committee has passed in March 2024 the Profert bill, channeling R$30 billion ($6 billion) into fertilizer industry development by 2030.

Wilson Guilherme da Silva, Petrobras’ general manager of investment programs, explained the next steps. The company will start looking for contractors in November, with a preference for Brazilian firms. They aim to restart construction in June 2025.

The UFN-III plant has an interesting history. Construction began in 2011 but stopped in 2014 due to issues with the original contractors. Despite the pause, Petrobras kept the site in good shape. They had already spent R$3.9 billion and completed 81% of the work.

From 87% Imports to Self-Sufficiency: Petrobras Leads Brazil’s Fertilizer Push

Brazil’s heavy reliance on imported fertilizers makes this project crucial. The plant’s location in Três Lagoas is strategic, close to major agricultural regions in central, southern, and southeastern Brazil. It will use natural gas and water to produce fertilizers.

Once up and running, the UFN-III plant will be a powerhouse. It’s designed to churn out 1.2 million tons of urea and 70,000 tons of ammonia yearly. These products are vital for Brazil’s farming sector, especially for crops like corn, sugarcane, coffee, wheat, and cotton.

Petrobras expects the plant to start operations in 2028. This revival shows the company’s renewed interest in the fertilizer sector, which it had previously deemed less attractive. It’s a big step towards reducing Brazil’s dependence on imported fertilizers and supporting its agricultural industry.