Wednesday, December 6, 2023

Dutch company to build US $1.5B fertilizer plant in Durango

A Dutch company is investing US $1.5 billion to build a fertilizer plant in Durango that is expected to drastically reduce Mexico’s reliance on foreign imports.

Durango Governor Esteban Villegas Villareal and federal Interior Minister Adán Augusto López announced the investment by fertilizer producer Tarafert earlier this month. The plant, which will be capable of producing approximately 1 million metric tonnes per year of the substance, is slated to begin operations in 2026.

Durango Governor Esteban Villegas and Mexico's Interior Minister Adan López
Durango Governor Esteban Villegas and Interior Minister Adan Augusto López at an event in Durango announcing the fertilizer plant. (Photo: Government of Durango)

The ammonia and urea plant will be built in the municipality of Lerdo and could produce enough fertilizer to cover 50% of Mexico’s demand for the substance, Tarafert says on its website.

At a business event in Durango on Thursday, Villegas highlighted that there are currently no fertilizer manufacturers in Mexico and that the cost of the imported product has increased significantly due to the Russia-Ukraine war.

Announcing the investment on Feb. 1, Villegas thanked Tarafert “for showing confidence in this government and Durango.”

“I cannot thank the government of Andrés Manuel López Obrador enough for its invaluable support,” he added.

Lerdo, Durango Gov. Homero Martinez and Mexico Interior Minister Adan Lopez
Lerdo Mayor Homero Martínez Cabrera, left, said at an event announcing the plant in Durango that he’s excited that the plant will bring good-paying jobs to town. (Photo: Government of Durango)

Thomas Berkvens, director of project development for Tarafert, expressed the company’s “excitement” at having the support of federal and state authorities, according to a Durango government statement.

Villegas said Thursday that construction of the plant will generate 3,000 jobs and that the facility will employ 400–500 people in “very well paid” jobs once it begins operations.

The municipal government of Lerdo will sell treated wastewater to the plant, meaning that it won’t deplete drinking water supplies, according to Gov. Villegas.

Jesús Castrillón Jiménez, Lerdo’s director of economic development, said earlier this month that Tarafert’s plant complies with environmental requirements and posed no threat to the Nazas River, which runs through Durango and Coahuila.

The $1.5 billion investment is a new record for the municipality, located in the Comarca Lagunera region of Durango and Coahuila.

“Tarafert will be the anchor company that will bring five other supply companies [to Lerdo]. They will be the base of the first industrial park … in this municipality, thanks to the intervention of the Caxxor group, which has dedicated itself to the design and construction of the park,” Castrillón said.

He said that one factor that convinced Tarafert to build its plant in Lerdo is the municipality’s proximity to railroad tracks and highways, including the Gómez Palacio-Durango City freeway. Another is the proximity of the El Encino-La Laguna gas pipeline.

At Thursday’s “Invest in La Laguna” business event, Villegas said that several other companies are close to announcing nearshoring investments in Durango.

The “Invest in La Laguna” website says the region is at “the center of North America’s most dynamic economic corridor.”

High productivity and the availability of industrial space and specialized labor are among the reasons why the Comarca Lagunera region is an attractive place to invest, the site says.

With reports from Milenio and El Economista

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