Brazil Petrobras Gets License To Build Fertilizer Plant
First Published Tuesday, 22 February 2011 04:25 pm - © 2011 DowJones

RIO DE JANEIRO -(Dow Jones)- Brazilian state-run oil company Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, said Tuesday that it had received the installation license to build the Tres Lagoas fertilizer plant in Mato Grosso do Sul state.

The plant will have installed capacity to produce 1.21 million tons of urea and 761,000 tons of ammonia, Petrobras said. The Tres Lagoas plant will be Latin America's largest nitrogen-based fertilizer production facility, alone responsible for doubling Brazil's output of urea.

Petrobras plans to build four fertilizer plants as part of a government-pushed initiative to boost fertilizer production to feed the country's massive agricultural sector. Brazil now imports more than half its fertilizer needs.

The government has been pressuring major fertilizer companies to increase production in an attempt to lower costs for farmers. Brazil's agribusiness sector has been a major contributor to the country's trade surplus over the years, but high fertilizer import costs have hurt local farmers' profit margins.

The four plants include an ammonia sulfate plant in Sergipe, the Tres Lagoas urea plant, an ammonia plant in Minas Gerais and a urea and ammonia chemical complex in Espirito Santo.

Site work at Tres Lagoas will start in April, with construction on the plant expected to start in September, Petrobras said.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; [email protected]