Arab Potash Company achieves ‘record’ production in 2018; revenues up by 39%

AMMAN — The Arab Potash Company (APC) announced on Wednesday that its net profit after taxes, provisions and royalties amounted to JD125 million in 2018, recording an increase of 39 per cent from 2017’s JD90 million.

APC's Chairman of the Board of Directors Jamal Al Sarayrah said that the company “has achieved a significant progress towards reducing production cost per tonne”, explaining that production cost of potash has decreased by 31 per cent per tonne since 2013, an APC statement said.

Sarayrah attributed the reduction in production costs primarily to the savings achieved in water and energy use, which coincided with the record production volumes achieved in 2018, reaching 2.436 million tonnes — the highest recorded volume in the company's history, according to the statement.

The company’s chairman pointed out that the cost management policy, production growth and the increase in international potash prices have all led to increasing the gross margin from 25 per cent in 2017 to 35 per cent in 2018. 

“Also, APC has succeeded in utilising marketing strategy that enabled the company to achieve unprecedented sales volume of potash that reached 2.439 million tonnes,” he added. 

Sarayrah noted that increase in the company’s profits has “enabled the APC to maintain its leading position as a major provider of income and returns to the Treasury”, putting the value of payments to the Treasury at JD71 million in 2018, an increase of 22 per cent from 2017, according to the statement.   

The company spent a total of JD9.8 million in 2018 on its corporate social responsibility programmes, which focused on “sustainable projects of long-lasting benefits to citizens in education, health, water and service sectors, among other sectors,” the statement said.

Sarayrah explained in the statement that APC is working on implementing a set of future plans that focus on expanding the company’s asset base in its plants in the country’s southern regions, adding that funds have been allocated in APC’s future budgets for capital projects, planned to be implemented in the coming years, with a value close to $1 billion.

“Among the company’s mega projects is the expansion of potash production in the northern area at a total cost of JD130 million, which is expected to increase the production capacity by 140,000 tonnes,” he added.

The company has also set up a budget to conduct technical studies in the Lisan area and in Ghor Fifa, located to the south of the Dead Sea, with preliminary results indicating a possible production increase of 1 million tonnes if these projects proved to be economically feasible and the concession right for the Lisan area is obtained, Sarayrah was quoted as saying in the statement.

He pointed out that the outlook of global markets forecasts a growth in international demand for potash, noting however that the additional production quantities that are expected to enter the market in the coming years must be taken into consideration. 

“Jordan’s strategic location and its proximity to developing markets will enable the Jordanian potash industry to capitalise on the expected growth in these promising markets,” Sarayrah said, adding that the focus now is on expanding the production of potash derivative industries and specialty fertilisers such as potassium nitrate.

APC’s acting CEO, Mohammed Al Razem, described 2018’s financial results as “very good”, indicating that APC has plans to increase the handling capacity of the export berth at the Aqaba Port to cope with the expected expansions in potash production, adding that exports have already begun from the new industrial port in Aqaba.

Razem said that “APC’s top priority is to provide a safe working environment for its employees”, adding that the company is “among the leading industrial companies in worker safety in Jordan and the region”.