EuroChem eyes Mena food security opportunity
24 August 2023
EuroChem Group is one of the top three global fertiliser producers and is one of only three firms worldwide with manufacturing capacity in all three primary nutrient groups: nitrogen, phosphates and potash.
Headquartered in Switzerland, EuroChem operates manufacturing facilities in Belgium, Brazil, Kazakhstan, Lithuania and Russia, employing over 27,000 people in 40 countries. Its products are exported to more than 100 countries.
In the wake of the Russia-Ukraine war, however, the company has found itself caught in the net of economic sanctions imposed by the EU and its member states on companies doing business in Russia.
The financial sanctions, which included the freezing of its bank accounts, caused EuroChem to look to set up a branch outside Europe from which it could continue to do business with its customers. The company opened a trading outpost in Dubai earlier this year.
“Recently, we have moved some of our trading functions to Dubai to be closer to our clients in Asia, Africa and the Indian subcontinent. These regions present great growth opportunities for our business and will add to our strong market presence in Europe and the Americas,” says Samir Brikho, executive chairman and CEO of EuroChem Group.
“While EuroChem remains a Swiss company with global operations across most major agricultural markets, establishing this new branch in the Middle East will position us to expand our operations in the region, as well as across Africa and Asia.”
Regional strategy
EuroChem is looking to tap into the opportunities presented by the efforts of countries in the Middle East and North Africa (Mena) region to address food security challenges.
“We believe the region presents production and sales opportunities that are aligned to our long-term growth ambitions. We are discussing partnerships and investments that could further bolster our regional presence,” Brikho says.
“We know the potential is there. In 2022, EuroChem sold almost 140,000 tonnes of fertilisers and industrial products to the Mena region, including more than 40,000 tonnes sold to the Middle East,” he says, adding that the firm is also committed to making a contribution to food security in Africa.
“We recently appointed a head of strategy for Africa who will help us to identify opportunities for investment on the African continent.”
The availability of commercially-feasible natural gas as a feedstock is one of the key criteria for fertiliser producers such as EuroChem to consider when investing in output expansion projects.
“Gas is an essential feedstock for the production of nitrogen fertilisers and an important input for phosphate fertilisers. Both fertiliser types are produced by EuroChem. As with all input materials, the availability of natural gas, at the right price and in proximity to our operations, is essential for our production and business model,” Brikho says.
When it comes to potentially expanding EuroChem’s business in the UAE beyond the sales branch, Brikho says: “The UAE is perfectly positioned as a major commercial, manufacturing, logistics and export hub with more than 40 multidisciplinary freezones.
“However, fertiliser production is reliant on proximity to its raw material supply chain of ammonia, natural gas, phosphate rock and potash.
“At present, we have no plans to invest in production facilities in the UAE, but if we identify opportunities that make business sense, then it will most certainly be considered.”
Addressing food security
Food security is a growing global challenge, and for the Mena region, which is primarily an importer of food products, the challenge is steep.
The situation has been made worse by rising global inflation spiking food prices, especially those of agricultural produce.
The high cost of fertilisers for farmers has played a part in pushing food prices even higher in recent months, mainly as a consequence of the Russia-Ukraine war.
“The fertiliser industry has faced multiple sanctions-related obstacles that have disrupted production, access to finance, logistics and supply chain networks. Taken together, this had a devastating impact on global production last year,” says Brikho.
The fertiliser industry has faced multiple sanctions-related obstacles that have disrupted production
“In Europe in particular, the inconsistent application of EU policies relating to sanctions had profound effects that curtailed production and caused shutdowns of European fertiliser production facilities. This led to reduced supply and availability and drove up costs.”
During last year’s peak, fertiliser prices increased by up to 300 per cent compared to 2021, affecting farmers globally, he continues.
“Now, we are seeing the longer-term impacts this has had on food availability and prices globally, where it is always those who can least afford it who suffer the most.”
EuroChem is doing its part to address food security and challenge the issue of rising costs, the CEO says.
“At EuroChem, we are united with international farmers and those from regions such as Mena that rely heavily on food and fertiliser imports.”
International governments need to put policies in place that "protect the global agricultural supply chain from the types of disruption and volatility brought on by geopolitical events and sanctions that we have experienced over the last year”, Brikho adds.
“We have to work together to mitigate against shocks that continue to impact food production, availability and the price of feeding our communities – and in particular those communities in poorer countries that are the most vulnerable.”
Main image: EuroChem's facilities in Antwerp, Belgium
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Abu Dhabi hopes bigger is better with Disney theme park
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Commentary
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Enter Disney
Disney changes that. It is the largest brand in the theme park space and will be a major attraction, but with limited information released on the project so far, it is difficult to fully gauge how significant the project will be.
The official release said that the project will be developed and operated by Abu Dhabi developer Miral, adding that Disney’s in-house design and engineering unit, Walt Disney Imagineering, will lead creative design and operational oversight to provide a world-class experience. It did not give any details on the ownership of the project.
In Hong Kong, for example, a company, Hong Kong International Theme Parks, was established as a joint venture, with the Government of Hong Kong holding 57% and The Walt Disney Company holding 43%.
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Tourism gateway
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Data centres churn investments
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Global investment firm KKR appointed retired US Army general and former Central Intelligence Agency director David Petraeus as chairman of its Middle East operations in mid-April.
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That announcement came a day after UAE National Security Adviser and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon Bin Zayed Al-Nahyan, met with US President Donald Trump at the White House. During the meeting, the UAE is understood to have committed to a 10-year, $1.4tn investment framework for the US.
Tech funds
In the past 24 months, Abu Dhabi and Riyadh in particular have set up funds, sometimes in partnership with global firms, to invest in AI and data centre infrastructure, both domestically and abroad.
Abu Dhabi’s MGX aims to build $100bn in assets under management within a few years, along with US-headquartered and Blackrock-backed Global Infrastructure Partners and Microsoft, the fund's key partners. It is part of the US’ Stargate consortium, which aims to mobilise up to $500bn to build AI infrastructure in the US over the next four years.
In Riyadh, a $100bn AI initiative known as Project Transcendence is expected to invest in data centres, technology startups and other related infrastructure for the development of AI.
US-based Silver Lake announced in March 2025 that, together with MGX, it has become a minority shareholder in state-backed, Abu Dhabi-based Khazna Data Centres, one of the region’s largest data centre operators.
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Not to be outdone, the founder of Dubai-based private real estate developer Damac pledged to invest $20bn in data centre projects in several US cities earlier this year.
And there is more to the growing – if outsized – number of bidirectional data centre-focused investment flows than meets the eye.
Given the global AI race and mounting competition, investment decisions regarding data centres are moving from a simple, commercial focus to account for complex geopolitical considerations, according to Jessica Obeid, a partner at Dubai-headquartered New Energy Consult.
“As the US weaponises its technological advancements, decisions to invest in US-based data centres hedge against the risks of US export controls, positioning developers in proximity to suppliers, ensuring reliable access to components.
“Yet, this access could become costlier, driven by trade tariff wars, heightened regulations and limited access to grid infrastructure,” Obeid says.
She adds that the GCC is quickly positioning itself as a global digital hub, driven by cost-competitive energy, advanced infrastructure and strong government backing.
“Proximity to reliable power supply at an affordable cost, and speed in licensing processes and grid connections, are increasingly becoming strategic factors in data centre deployment – and the GCC offers that.”
Powering AI strategies
Almost all of the GCC states have formulated AI strategies that aim to improve operational efficiencies, create jobs and support their energy transition and net-zero initiatives.
As a result, analysts expect the region to register double-digit annual growth in data centre construction activities in the next few years.
In a recent update, global consultancy PwC projected that the Middle East data centre capacity could triple from 1GW in 2025 to 3.3GW in five years’ time.
According to data from regional projects tracker MEED Projects, as of April, an estimated $12bn-worth of data centre construction projects are in the planning stage, in addition to over $820m under bid and $7bn under construction.
Li-Chen Sim, assistant professor of civil security at Abu Dhabi’s Khalifa University, says that AI investments are, on the one hand, “all part of a carefully conceived strategy to … diversify out of a hydrocarbons-driven economy, to create new revenue streams from overseas data centres, build new growth sectors, support business requirements and offer more knowledge-based jobs as opposed to traditional manufacturing from domestic investments”.
On the other hand, AI investments also aim to future-proof the hydrocarbons sector, which Sim expects will continue to be a significant driver of growth, revenue and exports, even as the use of renewable power grows.
However, the ability of Gulf states to execute their plans for leveraging AI to diversify economies and create jobs –and specifically to address youth unemployment – depends on two factors, according to Obeid.
The first factor is the ability of countries to advance their AI goals from infrastructure to capital and partnerships. The second involves the speed with which they can build up adequate human capital and a skilled workforce.
“We will have to see how governments align their educational curricula with the AI policies and electricity infrastructure development,” she says.
Ecosystem investment
AI and data centre investments go beyond the facilities that house thousands of advanced graphics processing units, miles of cables and many cooling systems. To run and execute applications – particularly AI inferencing tasks – data centre facilities require a substantial amount of energy.
Moreover, data centres in the Middle East and North Africa region face elevated environmental risks due to the high ambient temperatures, which increase energy demand for cooling, as well as water requirements.
This presents both a challenge and an opportunity, according to Obeid. "The GCC has an opportunity to advance innovation in energy and cooling technologies. Liquid cooling is necessary for AI workloads, and small modular reactors will become central in these data centres.”
In January, Abu Dhabi’s Emirates Water & Electricity Company (Ewec) appeared to show the way with a plan to build a round-the-clock solar photovoltaic (PV) plant combined with a battery energy storage system (bess) facility.
The 5.2GW solar PV and 19 gigawatt-hour bess plant is expected to deliver renewable power as baseload, and UAE President Sheikh Mohamed Bin Zayed Bin Sultan Al-Nahyan has said that the project will help power advancements in AI and emerging technologies, and support the delivery of the UAE National AI Strategy 2031 and 2050 Net Zero initiative.
Sim agrees that renewables combined with battery storage is part of the answer when it comes to building sustainable data centres. “Globally, data centres consume about 1% of electricity, and this figure – together with carbon emissions by data centres – is expected to grow significantly.”
He notes that Goldman Sachs Research forecasts that global power demand from data centres will increase 50% by 2027, and 165% by the end of the decade, compared to 2023.
“The other part of the puzzle with regard to sustainability is water consumption by data centres, particularly those in the Gulf, where high temperatures necessitate even more cooling measures.
“Singapore, for instance, has pioneered integrated water systems that recycle treated wastewater for reuse – and this circular water model could be an option for data centres in the Gulf, instead of using expensive desalinated water,” says Sim.
As things stand, the GCC can play a key role in the advancement of these and other technologies, along with efficiency measures and the optimisation of server utilisation through AI applications such as digital twins, says Obeid.
This is just as well, since the region appears to be on the cusp of a boom in inbound and outbound investments that will build data centre capacity abroad and closer to home.
“We are at a pivotal moment for innovation, where the intersection of digital advancements and energy innovation could position the GCC as a global leader, shaping the future of sustainable digital infrastructure,” concludes Obeid.
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