The screengrab taken from a video on May 30, 2026, shows a manufacturing plant of the Fauji Fertilizer Company (FFC) in Goth Machhi town of Sadiqabad district, Punjab, Pakistan. (Screengrab/ffc.com/File)
- Project expected to add 717,000 tons of annual urea capacity and use indigenous Thar coal
- Analysts say new plant could eliminate supply gaps and turn Pakistan into a net urea exporter
Pakistan plans to build its first coal-based fertilizer plant under a Chinese-backed infrastructure program at a cost of $1.12 billion, a major fertilizer producer said on Saturday, in a project analysts say could strengthen fertilizer security and eventually turn the country into a net exporter of urea.
The project will be developed by Fauji Fertilizer Company (FFC), Pakistan’s largest fertilizer manufacturer, under the second phase of the multibillion-dollar China-Pakistan Economic Corridor (CPEC), part of China’s Belt and Road Initiative. The company said the plant is expected to produce 717,000 tons of urea annually and be commissioned by 2031.
Last week, FFC signed a Front-End Engineering Design (FEED) agreement with China’s Hualu Engineering and Technology Co. Ltd. for the project, which it described as Pakistan’s first coal-to-fertilizer venture.
“The project is expected to produce 717,000 tons of urea annually while utilizing approximately 2.1 million tons of indigenous coal each year, strengthening fertilizer security, enabling value creation from local resources, and supporting Pakistan’s long-term industrial growth,” the company told Arab News.
FFC said the project would be built with an investment of $1.12 billion but did not specify whether the funding would come entirely from Chinese sources or whether the company would also contribute to its own funds.
The development marks Pakistan’s first coal gasification project for fertilizer production and comes as the country’s fertilizer industry continues to rely largely on natural gas as a feedstock.
“This is the first coal gasification project in Pakistan. There were no other projects like this before,” Zayan Babar Khan, an investment analyst at Karachi-based brokerage Arif Habib Limited, said.
He said fertilizer manufacturers currently depend primarily on natural gas, making alternative feedstock sources important for ensuring stable production and supporting food security.
Pakistan, where agriculture contributes about 23 percent of gross domestic product, produces around 6.5 million tons of urea annually.
Muhammad Waqas Ghani, head of research at JS Global Capital Limited, said existing manufacturers, including FFC, Engro Fertilizers Limited, Fatima Fertilizer Company Limited and Agritech Limited, relied on natural gas.
“This plant will be the first to use coal gasification to produce ammonia and urea,” he said.
Ghani said Pakistan’s fertilizer sector was already largely self-sufficient in urea production, with imports used mainly to meet occasional shortfalls.
“The addition of 717,000 tons of capacity would fully bridge any gaps and create a surplus, positioning Pakistan as a net urea exporter and opening up new export opportunities,” he told Arab News.
Minhal Ali, a commodity analyst at Insight Securities Limited, said domestic demand for urea had remained largely unchanged in recent years.
“In the last 5-6 years, our user demand has not increased much. It is around 6.2-6.5 million tons,” he said.
“This plant will possibly be used to cater to exports.”
Ali said the facility would likely be built near the Thar coalfields in Sindh because transporting the coal elsewhere would be impractical.
“They would most probably be exporting their produce as the local market does not have the capacity to consume 717,000 tons of urea. FFC’s new plant will be manufacturing,” he said.
“Maybe some urea could be consumed locally if corporate farming increased by 2030 when this plant comes online.”
Reference Link:- https://www.arabnews.com/node/2645462/pakistan