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Petrobras informed on Monday, April 29, that it has opened the bidding for leasing the Fafens, as the company’s nitrogen fertilizer plants in Sergipe (Fafen-SE) and Bahia (Fafen-BA) are known.
The leasing process for the fertilizer plant located in Sergipe began on January 10, where Petrobras announced on February 1 that it had initiated the process of hibernation for the fertilizer plant in Sergipe (Fafen-SE) and that it continues with the bidding process for leasing this unit, awaiting proposals from potential interested parties. The bidding includes the maritime terminals for ammonia and urea at the Port of Aratu in Bahia, the state company reported.
The state-owned company pre-qualified three proposals for the second phase. The companies eligible to participate in the bidding for the units in Sergipe (Fafen-SE) and Bahia (Fafen-BA) are Proquigel Química S.A., PJSC Acron, and Formitex Empreendimentos e Participações Ltda., Petrobras stated. Where the companies will have until June 22 of this year to submit the final proposal. The company that presents the highest price for leasing over a period of ten years, renewable for another ten, will win.
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The competition has been a topic in the National Congress since Petrobras announced its exit from the fertilizer sector in the country. Federal Deputy Evair Vieira de Melo (PP/S) requested the holding of a public hearing in the Agriculture and Livestock Committee of the Chamber to discuss fertilizer production in Brazil and the reopening of nitrogen fertilizer plants in Bahia and Sergipe.
The closure of the plant in Sergipe and Bahia was announced in March of last year. The reason, according to Petrobras, was the losses from fertilizer production. In 2017, the state company stated that the loss reached R$ 600 million. To mitigate the social impact in the region of Laranjeiras (SE), Petrobras said it is developing a plan for social projects in association with educational institutions, with investments planned amounting to R$ 26 million for the period from 2019 to 2022.
Senator Alessandro Vieira criticized the government’s and Petrobras’s stance and stated that opening the fertilizer market to international companies could directly impact the production costs of Brazilian agribusiness.
“Today Brazil already depends on the import of fertilizers, but if the Fafens stop, we will depend 100% on imports,” he criticized. “In addition to jobs and the local supply chain, there is a national strategy issue in this process. It is not smart to put the pricing composition of our main commodity in the hands of foreigners,” he added.
The Fafen-SE is a nitrogen fertilizer unit with a total urea production capacity of 1,800 t/day. It also sells ammonia, carbon dioxide, and ammonium sulfate (also used as fertilizer).
The Fafen in Sergipe began operating in October 1982, and the announcement of the plant’s closure provoked a series of protests. Around 1,500 direct jobs may be lost, along with an additional 5,000 indirect jobs.
Petrobras announces the sale of RLAM and oil workers will respond with a protest today, April 30.
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