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Helping resolve the world's food problems through construction of fertilizer plants
Sharp population growth driving increased demand for fertilizers worldwide
Source: "Current world fertilizer trends and outlook to 2011/12," Food and Agriculture Organization of the United Nations, 2008
Today the global population continues to grow at an alarming pace. From roughly 6 billion in 2000, the total topped 7 billion in 2011 – and is projected to exceed 9 billion by 2050.
One of the most critical problems brought about by this dramatic population surge is food shortage. To cope with future increases in population, production of grains and vegetables must be expanded. Moreover, as diets in the emerging and other countries improve, demand will increase for meat, resulting in the need to boost production of feed crops, which are already in rapidly growing demand. In today's world, however, given calls for responsiveness to the natural environment, there is a limit to the amount to which farmlands can be expanded.
This situation is engendering increased importance of fertilizers. When properly used, fertilizers can enable increased production from available farmlands. In the past several decades, for example, production of wheat and rice has been expanded in Japan, the U.S. and Europe without increasing the area of cultivated land – a feat made possible not only through plant breeding and mechanization, but also by use of fertilizers that are enhancing productivity significantly. In recent years agrarian reform of this kind has been making progress in the emerging economies as well, causing expansion in fertilizer demand on global scale. Demand is thus rising all around the world for plants capable of producing fertilizers of good quality at low cost, in order to avert serious food shortages in the future.
MHI has built more than 40 plants in natural-gas-producing regions worldwide.
For more than 40 years MHI, as part of its chemical plant business, has engaged in the construction of fertilizer plants worldwide, thereby contributing to increased food production on global scale. The plants the company handles are nitrogen-based, nitrogen being one of the three major constituent nutrients (along with phosphate and potash) of fertilizers.
Generally, production of nitrogen fertilizers is performed by a process called ammonia synthesis. In this process nitrogen gas, which comprises 80% of our air, is first made to react with hydrogen; this yields ammonia, to which carbon dioxide is added to form ingredients of nitrogen-based fertilizers, e.g. urea. Various methods exist for acquiring the hydrogen needed in ammonia synthesis, and among these production employing natural gas is both the most efficient and inexpensive.
MHI, harnessing the world's foremost chemical process technologies, to date has constructed and delivered 41 nitrogen fertilizer plants to natural-gas-producing regions worldwide, including Asia, Russia and the Middle East.
Contributing to food self-sufficiency in Indonesia through construction of a large-scale fertilizer plant
One example of the company's initiatives in fertilizer plants is a project undertaken in Indonesia.
Indonesia, a country with roughly five times the land area of Japan, is home to the world's fourth-largest population, 238 million people. In recent years the country has been achieving remarkable economic development, its GDP growing by a rate of 6%. But even as industrialization and urbanization are proceeding at a swift pace, agriculture remains a major industry. Indonesia's principal crops are palm oil, natural rubber and coffee beans - all of which contribute to the nation's acquisition of foreign currency - and the country's staple food, rice.
In the 1970s the Indonesian government led an initiative to increase the nation's rice output, and by the 1980s 100% self-sufficiency was achieved. In subsequent years the population has continued to expand by more than 1% each year, but self-sufficiency in rice has largely been maintained.
Contributing to this development of Indonesia's farm industry is Kaltim-4, a large-scale fertilizer plant in which MHI played a key role. The plant was delivered approximately 10 years ago to PT Pupuk Kalimantan Timur (Pupuk Kaltim), a public corporation, established in 1977, that today ranks as Indonesia's largest manufacturer of fertilizers. Pupuk Kaltim is based in Bontang on Borneo Island ("Kalimantan" in the Indonesian language), location of one of the world's foremost production areas of natural gas. The bulk of the fertilizer produced at the Kaltim-4 plant is supplied to two-thirds of the country in terms of land area, including the rice-producing island of Java, where it contributes to the improvement of the productivity of local farmers.
Besides nitrogen fertilizers, Kaltim-4 also manufactures compound fertilizers with phosphate and potash ingredients, and organic fertilizers based on palm or coconut oil. To preserve the richness of local soil, various fertilizers are supplied in good balance, thereby contributing to sustainable agricultural development throughout the country.
Paying full heed to local environmental and economic needs in collaboration with a local partner
As its name indicates, Kaltim-4 is Pupuk Kaltim's fourth fertilizer plant. MHI received the order for this project in 1999 after a competitive bidding process. The deciding factors for the client were MHI's outstanding track record in projects of this kind worldwide and its superlative technological capabilities in freely coordinating state-of-the-art chemical processes. Moreover, MHI had already successfully completed two other projects in the Bontang region.
The Kaltim-4 project was carried out in the form of a consortium with a local company. MHI was in charge of the work from overall planning and supervision to basic design, supply of the plant's high-efficiency compressors and other core equipment supply, commissioning, and operational training. Detailed engineering work, equipment procurement and construction were performed by PT Rekayasa Industri (REKIND), an engineering and construction firm based in Jakarta.
Before commencing construction work, Pupuk Kaltim first undertook an environmental impact assessment in compliance with governmental environmental guidelines. Next, based on that assessment MHI proceeded with meticulous planning of highly efficient manufacturing processes that would result in minimal waste of natural gas, the main resource, electric power, etc. In addition, to cope with the plant's water and gas discharges, MHI prepared a design that cleared all regulatory environmental guidelines and minimized impact on the plant's surrounding natural environment.
During construction work, every effort was made to ensure safety by maintaining close liaison with both Pupuk Kaltim and REKIND. Attention was also paid to supporting the local economy by proactively relying on local labor power.
Once all facilities were in place, MHI proceeded to fully confirm design performance through operational test runs. The company undertook training not only of engineers who would be controlling the plant as a whole, but also of all personnel who would be in charge of the various processes, including equipment operators and maintenance staff.
As the culmination of these diligent procedures, Kaltim-4 went into operation in 2002, and since then it has performed stably and to the client's high acclaim. Today the plant continues to make a vital contribution to the development of agriculture in Indonesia.
Pursuing construction projects worldwide to respond to expanding demand for fertilizers
Since completing the Kaltim-4 project, MHI has continued to engineer and construct large-scale fertilizer plants all around the world, including sites in Asia, the Middle East, Russia and Africa.
In November 2010 MHI received an order from Joint Stock Company Ammoni of the Republic of Tatarstan, Russian Federation, for the construction of a plant – one of the largest of its kind in the world – to produce ammonia, urea and methanol. The order for the plant, which is to concurrently produce methanol and nitrogen fertilizers from natural gas, was taken in partnership with a Japanese general trading firm and a Chinese construction company. Construction is presently under way, with a target startup date of 2015.
Other related developments in fiscal 2011 include the receipt of an order in October from a state-owned oil corporation in Malaysia for a large-scale fertilizer plant. Also, in November the company, together with three other Japanese firms, concluded a front-end engineering design (FEED) agreement for a fertilizer plant to be built in the Republic of Angola. The agreement covers basic design, preparation of engineering documents and contracts, site surveys, etc.
As the global population continues to grow, demand for fertilizers is expected to expand further in the years ahead. MHI will continue to diligently push forward with fertilizer plant projects worldwide, as its way of contributing to solving the world's food problems.
Expectations of MHI
I hope MHI continues to make superior proposals that contribute to the development of our country.
Nugraha Budi Eka Irianto
Pupuk Kalimantan Timur
I am very satisfied with the work MHI has done in regards to the Kaltim-4 project. Specifically, communication was great and the project was able to progress very smoothly from the design stage. Schedule management was quite solid, allowing the project to be finished five months ahead of schedule, which is faster than any project we had done.
In addition, we place emphasis on the environmental preservation of the region, such as the forests and coastal mangroves around the plant. MHI thoroughly understood our management policy and reflected it in the plant's design. Aside from that, MHI imparted much advice cultivated from their experience and know-how from across the globe, such as giving Rekayasa Industri pointers on safety management during the construction stage, and thoroughly educating our employees when we took over.
As Indonesia's population continues to increase, domestic farmers will continue pursuing improved productivity. Going forward, I hope MHI continues to make superior proposals that contribute to the development of our country.