What is the scenario of asia complex fertilizer market?
Asian countries are behind US and European countries in terms of achieving agricultural crop yield. The focus on improving crop yields has driven the demand for complex fertilizers in the Asian subcontinent over the past decade. Asia complex fertilizer market registered moderate growth during 2012-2017, growing at a CAGR of ~%, to register revenues worth USD ~ billion in 2017 as compared to USD ~ billion in 2012. Moderate growth was due to decline in consumption of complex fertilizers in certain key territories and slump in price of complex fertilizers, driven by decline in cost of raw materials in international markets. Overall, complex fertilizer production in Asia grew at a CAGR of ~% during 2012-2017, whereas consumption of complex fertilizers grew at a CAGR of ~% during the same period.
Indonesia was the largest consumer and producer of complex fertilizers in Asia and accounted for about ~% of the market in 2017.
India ranked second and comprised for ~% of the market share in 2017. Vietnam, Indonesia and Thailand were other major countries utilizing complex fertilizers in Asia and accounted for ~%, ~% and ~% market share respectively in 2017. All other Asian countries together comprised for remaining ~% of the market.
NPK 16-16-8 was the most widely used complex fertilizer in Asia and accounted for ~% market share in overall complex fertilizer market in 2017. NPK 20-20-15 was the next popularly used fertilizer grade and comprised for ~% market share in 2017. NPK 15-15-15 and NPK 20-20-0 were other popularly used complex fertilizers which comprised for ~% and ~% market share respectively in 2017. All other grades/formulas of complex fertilizers together comprised for about ~% of the market share in 2017.
How has indonesia complex fertilizer market performed?
Indonesia complex fertilizer market is highly regulated and state-owned companies have a monopoly in this sector. Farmers are supplied Indonesia NPK Fertilizer Demand at highly subsidized rate. Although only NPK 15-15-15 is subsidized by the government, the grade accounted for about ~% of overall NPK fertilizer consumption in the country in 2017. The government has announced in its recent plans to redirect government funds for fuel subsidies to improve agricultural production by purchasing seeds and fertilizers.
Indonesia lacks mineral resources of phosphate rock and potash to produce its NPK requirements locally. However, local companies are making efforts to lessen the countries dependence on importing finished NPKs. Petrokimia Gresik’s joint venture with Jordan Phosphates Mines Company (JPMC) has led to the establishment of Petro Jordan Abadi (PJA) phosphoric acid plant in Java, which became operational in early 2014.
Indonesia has been increasingly focusing on utilization of complex fertilizers in the recent past. Consumption of NPKs has inclined from ~ million MT in 2012 to ~ million MT in 2017. This represents growth at a CAGR of ~% during the period 2012-2017.
The market for complex fertilizers grew from USD ~ million in 2012 to USD ~ million in 2017, representing growth at a CAGR of ~% during the period 2012-2017. The market witnessed a slump during 2015-2016 due to fall in prices of raw materials used for production of complex fertilizers.
Indonesia imported about ~ thousand MT of NPK fertilizers during 2016, majorly from Malaysia and Norway. Imports declined in 2016 by as much as ~% as compared to 2015. Oversupply of NPK fertilizers in the domestic market coupled with decrease in price of Urea, DAP and NPKs resulted in decline in imports of the same in 2016. Overall, imports grew at a CAGR of ~% during 2012-2016 from ~ thousand MT in 2012 to ~ thousand MT in 2016.
Malaysia and Norway were the two biggest exporters of NPK fertilizers to Indonesia as of 2016, contributing about ~% and ~% of the overall NPK imports of the country (in terms of volume). Belgium and Russia were other important import destinations amongst several other countries in 2016 and resulted in ~% and ~% of the overall NPK fertilizer imports.
Which segments have outperformed?
NPK 15-15-15 was by far the most widely used complex fertilizer in Indonesia since this NPK grade is subsidized by Indonesian government. The usage of this particular NPK fertilizer has grown at the fastest pace during the last 5 years. NPK 12-10-20, NPK 15-7-20, NPK 20-10-20, NPK 15-10-28, NPK 13-6-27 and NPK 16-16-16 were other popularly used complex fertilizer grades in Indonesia.
Indonesia largely produced and utilized high quality granulated or fused complex fertilizers and was largely dominated by public sector companies. The market was strictly regulated by the government and entities invested quite heavily in setting up manufacturing facilities and producing high quality complex fertilizers.
Consumption of granulated fertilizers stood at ~ Million MT in 2017, comprising for ~% market share of overall complex fertilizer consumption in the country. On the other hand, consumption of blended complex fertilizers stood at ~ Million MT in 2017 which accounted for ~%market share of the overall complex fertilizer market in Indonesia.
How is competition structured?
Indonesian complex fertilizer market is highly competitive and very largely dominated by public sector. The market comprises of very few domestic manufacturers, with state-owned companies almost having a monopoly in this sector. The country’s domestic production has been sufficient to meet the consumption demand in the last few years. Moreover, most NPK manufacturers utilized advanced technology and produced high quality granulated/fused complex fertilizers. The market is highly regulated and subsidized, with about 90% of complex fertilizer consumption being subsidized.
Indonesian complex fertilizer market is very concentrated with top 4 players together comprising for ~% of the market share, in terms of revenue. Petrokimia Gresik was the market leader by far, in terms of revenue, by accounting for ~% market share in 2017. Pupuk Kalimantan Timur emerged as the second largest player in this space and comprised for ~% market share. Pupuk Kujang and Pupuk Sriwidjaya Palembang accounted for ~% and ~% market share, respectively. Several other players including Yara International, Wilmar International and Malaysian Agrifert-Kuoks comprised for the remaining ~% market share in 2017.
What are the growth prospects of indonesia complex fertilizer market?
Indonesia has a very balanced demand and supply equilibrium, with high level of regulation and participation from the government. All the largest complex fertilizer manufacturing companies in Indonesia are part of Indonesia Holding Company (public / state-owned enterprise) and over ~% of the domestic consumption of complex fertilizers were subsidized by the government as of December 2017. Since the country has been steadily increasing its utilization of complex fertilizers over Urea and other mineral fertilizers and the government has been pushing local companies to develop more complex fertilizer plants, complex fertilizer manufacturers are expected to keep investing and expanding their manufacturing capabilities at least in the near future. Consumption of complex fertilizers in Indonesia is expected to grow at a CAGR of ~% during the period 2017-2022. Ken Research estimates the consumption of complex fertilizer to grow in the next five years, rising from ~ million MT in 2018 to ~ million MT by 2022. Average selling prices of NPKs are most likely to improve 2018 onwards owing to recovery in agricultural commodities’ prices.
Most manufacturers produced high quality granulated/fused complex fertilizers in Indonesia since the government provided subsidy on high-quality granulated/fused NPK 15-15-15 only. Hence, production of complex fertilizers is expected to grow at healthy CAGR of ~% during 2017-2022, inclining from ~ million MT in 2018 to ~ million MT by 2022. NPK 15-15-15 was the most widely used complex fertilizer in Indonesian market, recording fastest growth during the last 5 years. Going forward, utilization of NPK 15-15-15 is most likely to remain strong owing to balanced nutrient composition and continued subsidy provided by the government.
For more information on the research report, refer to below link
Related Reports by Ken Research
Ankur Gupta, Head Marketing & Communications
+91-124 423 0204