A 1.3-billion US dollar (about 3.5tri/-) natural gas to urea fertiliser manufacturing plant is set for establishment in the country, a facility which is expected to bring significant reforms in both agricultural and industrial sector, while creating hundreds of thousands of jobs.
This is after the Government through the Tanzania Petroleum Development Corporation (TPDC), Tanzania Fertiliser Regulatory Authority (TFRA) and the Tanzania Investment Centre (TIC) signed the Memorandum of Understanding (MoU) with the PT ESSA Industries Indonesia Tbk.
At the signing ceremony in Dar es Salaam, Minister in the President’s Office (Planning and Investment), Prof Kitila Mkumbo stated: “This project is very important. Its construction is set to take five years.”
The plant, to be established in Mtwara Region, is expected to begin operations in 2029, however, Prof Mkumbo challenged the investor to shorten the construction period.
“We need to increase productivity in agriculture and industries. Because apart from food crop, our agenda is to go to industry-driven economy, so you can’t speak of industries without speaking of agriculture because 65 per cent of raw materials used in industries come from farms, so there is no industrial revolution without agricultural revolution,” Prof Mkumbo argued.
He said the country’s agricultural master plan for the next over 10 years stresses on Tanzania to become self-sufficient in fertiliser production.
“So, this plant will help us in our industrial agenda and create more jobs,” he pointed out.
Indonesia Ambassador to Tanzania, Tri Yogo Jatmiko said both sides are committed to implementing the project on time.
“We need to implement this project following commitment from our two Presidents. I am very happy that we are all committed,” said Ambassador Jatmiko.
On his part, Mr Rahul Puri, Commissioner and Board Member of the ESSA Industries, noted that the company has a great backup from the Presidents of two countries-President Samia Suluhu Hassan and her Indonesian counterpart Joko Widodo.
“We intend to replicate this technology from Indonesia to Tanzania. Tanzania has immense natural gas. We learnt from our own example in Indonesia where there are six different plants since 1950s to make sure there is adequate urea in the country,” Mr Puri assured.
He said Tanzania has potential to produce urea for its own use and export to neighbouring countries, noting that 60 per cent will be used domestically while the remaining 40 per cent will be for export.
Tanzania normally brings fertilisers from outside and using its domestic route and transportation to transport it to land-linked countries.
Therefore, Tanzania will become the channel of the domestic fertiliser into these countries.
‘If we export to these neighbouring countries, we will also be able to bring in foreign currencies to the country, this is another importance of this project,” he said.
On his part, TPDC acting Director General, Mr Francis Mwakapalila explained that the initial requirement of natural gas to the envisaged factory is 70 million standard cubic feet.
“The reserve that we have in Tanzania is 54.57 trillion cubic standard feet. But, since we started using natural gas in Tanzania, we haven’t even consumed a single trillion cubic feet, so 70 million is just a small amount that we can manage to supply to the project.
“We are confidence that this MoU will take our partnership to a significant step and we are thinking that in the near future the government will take a next step of signing another agreement for supplying gas,” Mr Mwakapalila affirmed.
The Executive Director of the TFRA, Mr Joel Laurent, was of the view that the event was testimony that the Sixth Phase Government is committed to attracting investment in all sectors including agriculture and building up the economic diplomacy.
Mr Laurent informed that Tanzania is net importer of fertiliser, 87 per cent of fertiliser consumed in the country is imported.
“Given the strategic position of Tanzania and the available opportunities, including availability of raw materials and potential market, the country is positioned to be the hub of fertiliser supply in the region.,” he expressed optimism.
He said despite the increase of fertiliser in the country, their production was depending on imported raw materials, so the Urea manufacturing facility is timely in the fertilise sub sector.
“Availability of natural gas as raw materials in production of Urea is essential for agricultural production, enabling farmer to increase production,” he stated.
Commenting, TIC Executive Director Gilead Teri said the investment is expected to create over 400,000 jobs, thanking the President and Minister Prof Mkumbo for their endless efforts to attract investors in the country
