Spotlight: Mexico’s fertilizer production

Apart from energy independence, Mexican President Andrés Manuel López Obrador also promised to achieve food sovereignty and ordered federal oil company Pemex to increase fertilizer production with free distribution to all 32 states. 

During an event on March 21 that commemorated the nationalization of oil, CEO Octavio Romero Oropeza announced that, following the rehabilitation of two urea plants and one phosphate plant, the company expects to have increased production from 781,000t in 2018 to around 2Mt/y currently. 

However, he did not specify the location of the plants. He also said that at the beginning of López Obrador’s term in 2018, there were “six deteriorated and non-operational ammonia plants, two non-operational urea plants and one phosphate fertilizer plant,” and that “by next April, two ammonia plants and two urea plants will be in full production.”

López Obrador will leave office on October 1.

Fertilizer assets

Media and official reports suggest that Pemex’s main assets are linked to the acquisitions of Agronitrogenados in 2013 and Grupo Fertinal in 2016 and the rehabilitation of the 103ha Cosoleacaque petrochemical complex in Veracruz state.

One urea plant Romero referred to is related to Pro-Agroindustria, formerly Agronitrogenados, which the administration of former president Enrique Peña Nieto (2012-18) purchased at an extra cost of about US$200mn 10 years ago. Former Pemex CEO Emilio Lozoya is still facing legal proceedings over his alleged role in the purchase.

The urea asset is located in Coatzacoalcos, Veracruz, but it is still unclear whether the government counts it as one unit or several. 

The phosphate plant referred to by Romero Oropeza is the one that the previous administration acquired in 2016 when it bought Grupo Fertinal for US$255mn. The transaction included a phosphate fertilizer unit in Lázaro Cárdenas, Michoacán state, and a phosphate rock mine in San Juan de la Costa, Baja California Sur state.

In March 2022, Romero Oropeza said that the government would invest US$300mn in the rehabilitation of the acquired assets and the complex. US$56mn was supposed to go to the first, US$144mn to the second and US$100mn to the third. 

But since then, the government has failed to update the status of the last investment. Pemex has also not revealed the units that make up the complex, although daily La Jornada reported in December that five plants were being rehabilitated. 

“This complex produces, distributes and markets ammonia and carbon dioxide, satisfying the national demand of clients in the fertilizer sector and chemical industries,” Pemex said in a social media post in 2013.