Mexico Breaks Ground on $1.5 Billion Fertilizer Megaplant

Mexico · Economy

A new Mexico fertilizer plant worth around $1.5 billion broke ground this week in the northern state of Durango, a private bet to loosen the country’s heavy reliance on imported fertilizer and shore up its food supply.

A big bet in the desert north

On June 8, in the town of Lerdo in Durango, a Mexican industrial group called Fermaca began building what it bills as the largest nitrogen-fertilizer project in Mexico in decades. The complex, run through a subsidiary named Fermachem, carries a price tag of roughly $1.5 billion, though figures cited at the launch ranged from about $1.15 billion in the company’s own statement to $1.6 billion mentioned by the state governor. Whichever holds, it is an enormous private investment for the region, spread across 150 hectares of land.

The plant is designed to turn out one million tonnes of urea a year. Urea is the workhorse nitrogen fertilizer that farmers spread to make crops grow, and it is made using natural gas as the raw ingredient. That is why Durango was chosen: the company pointed to competitive access to natural gas and signed a separate deal with a supplier, Essentia Energy, to feed the plant.

Why this Mexico fertilizer plant matters

The reason a fertilizer factory makes national headlines comes down to one uncomfortable number: Mexico imports more than 80% of the urea its farms consume. That leaves the country’s food production exposed to events far outside its control, the price swings, shipping snarls and geopolitical shocks that ripple through global fertilizer markets. When the war in Ukraine and the more recent Middle East conflict pushed energy and fertilizer prices higher, those costs landed directly on Mexican farmers.

Against that backdrop, the plant’s planned output makes a real dent. One million tonnes a year is equal to roughly 58% of all the urea Mexico imported in 2024, when the country brought in about 1.7 million tonnes. It would not end the dependence, but it would meaningfully shrink it, which is why federal and state officials lined up to praise the project under the banner of what they call food sovereignty, the idea that a country should be able to feed itself without leaning on foreign suppliers for the basics.

Private money, public goal

What makes this project notable is who is paying for it. This is private capital, led by Grupo Fermaca, not a state venture, and the launch drew guests from the United States and Spain alongside Mexican officials. That distinguishes it from a parallel effort by the government’s own oil company, Pemex, which is separately spending billions to revive state-owned petrochemical and fertilizer plants, including a large ammonia and urea facility in Poza Rica. Mexico, in other words, is attacking the same problem from two directions at once: a public push through Pemex and now a major private one in the north.

For the company, the logic is commercial as well as patriotic. Beyond serving Mexican farmers, Fermachem says it intends to sell into export markets in the United States and the rest of Latin America. A plant that can both replace imports at home and ship abroad is a more resilient business than one betting on a single market.

The long road to 2029

A groundbreaking is a beginning, not a finish line. The first phase covers engineering, permits and the early construction work, and the developer expects the plant to come on stream around 2029, with executives candidly admitting a complex build of this scale could slip. Until the first tonnes actually roll out, Mexico’s farmers will keep buying foreign urea.

Still, the project lands at a moment when import substitution, the strategy of making at home what you used to buy abroad, has become a recurring theme across Latin America, from Brazil’s push to rebuild its own fertilizer industry to similar plans elsewhere in the region. For Mexico, a country whose farms feed both its own people and a large export trade, a homegrown supply of the most basic crop nutrient is a strategic prize. The next few years of construction will show whether the bet pays off.

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Frequently Asked Questions

What is being built and where?

A private group called Fermaca, through its Fermachem unit, has begun building a nitrogen-fertilizer complex in Lerdo, in the northern Mexican state of Durango. The investment is around one and a half billion dollars and the plant is meant to produce one million tonnes of urea a year.

How much will it reduce Mexico’s imports?

Its planned output equals about fifty-eight percent of the urea Mexico imported in 2024. The country currently buys more than eighty percent of the urea it uses from abroad, so the plant would shrink that gap without closing it entirely.

When will the plant open?

The developer expects production to begin around 2029. The first stage covers engineering, permits and construction, and the company has acknowledged that a project this complex could take somewhat longer.

Connected Coverage

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