Arab Potash Company (APC) said its 2015 net profits rose 31 percent year-on-year to around JD131 million, while it also achieved a record production volume of 2.355 million tons over the same period.
In a statement, APC’s chairman Jamal al Sarayreh in part attributed the positive results to cost management policies, and rising global prices, particularly during the first half of 2015.
As a result, the company’s payments to the government also increased; income tax payments were up to JD32 million in 2015 compared to JD11 million in 2014; royalty payments also rose to JD24 million from JD13 million, year over year.
However, despite last year’s positive results, al Sarayreh predicted a slowdown in 2016 due to international price trends. Low oil prices have weakened demand for potash in key markets, including India and China, leading prices to drop to their lowest in eight years.
Low potash prices have prompted international companies to announce lower investments and expansion plans this year, including Canada’s Potash Corp, a leading investor in APC, which recently announced it was going to cut production due to a weak global fertilizer market. Furthermore, India, one of the main markets for fertilizer consumption, has announced a halt to potash imports due to drought, while China and Brazil also trimmed their buying.
“Falling potash prices will make APC, which holds only 4 percent of the global market, captive to international price trends, with the choice of either keeping up with the prices set by big producers, or leaving certain markets to our competitors,” APC said.
Nonetheless, the company still maintains a positive outlook for the future, with plans to expand its asset base in plants located in the south of Jordan. The company has set aside approximately JD1 billion for capital projects that will be implemented over the coming few years, including an increase in production capacity by 245,000 tons and raising the production capacity of granular potash by 250,000 tons per year. It will also embark on a project to generate electricity from solar, said al Sarayreh.
APC’s President and CEO Brent Heimann said his company has also started building an industrial port in Aqaba at an initial cost of JD118 million—to be financed equally by APC and the Jordan Phosphate Mines Company—to cope with the increase in production.