UPDATE 1-Tanzania to start building $3 bln fertiliser plant this year

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INNOCENT-THE BLOGGER-BOY
By Fumbuka Ng'wanakilala
May 20 Tanzania plans to start work this year on a $3 billion fertiliser plant, which it said on Friday will be Africa's largest, as part of an effort to increase its agricultural production.
The factory, which Tanzania is building along with a consortium from Germany, Denmark and Pakistan, will use natural gas to produce fertiliser, the president's office said.
"The plant, which will become Africa's biggest fertiliser producer, will have a capacity of producing 3,800 tonnes per day," it said in a statement.
"The factory is expected to create more than 5,000 jobs and its investment will cost $3 billion." the statement said.
Tanzania currently imports most of its fertiliser for crops including coffee, sugar and maize.
Officials said the state-run Tanzania Petroleum Development Corporation (TPDC) has signed a joint venture agreement with German firm Ferrostaal Industrial Projects, Danish industrial catalysts producer Haldor Topsoe and Pakistan's Fauji Fertilizer Company to develop the plant.
Carsten Schneider, Ferrostaal's leader of the project, confirmed the company will proceed with the project and that the plant will be operational in 2021.
It will be built in southern Tanzania near big offshore gas finds and is expected to be commissioned in 2020. Natural gas can be used for the industrial production of ammonia, a key fertiliser ingredient.
The east African country said in February an additional 2.17 trillion cubic feet (tcf) of possible natural gas deposits has been discovered in an onshore field, raising its total estimated recoverable natural gas reserves to more than 57 tcf.
Fertiliser produced by the plant will be used to boost agriculture output in Tanzania, while surplus capacity will be exported to foreign markets.
Agriculture contributes more than a quarter of Tanzania's gross domestic product (GDP) and employs around 75 percent of the labour force, but growth is stifled by low crop yields. (Additional reporting by Tom Kaeckenhoff in Duesseldorf; Editing by George Obulutsa and David Evans)