There’s a handful of big players in the agricultural fertilizer industry. Setting up business within this industry requires huge capital, which makes for a high barrier to entry. The availability of raw materials, especially for potash and phosphate, also limits entry into the fertilizer business (XLB).
The above graph shows nine top agricultural fertilizer producers by NPK (nitrogen, phosphorus, and potassium) fertilizer types. PotashCorp (POT), which recently announced a merger with Agrium (AGU), will become the largest player within the industry by capacity. Mosaic (MOS), which produces potash and phosphate fertilizer, is next. These three companies are based in North America. The orange dashed lines in the graph show expected capacity expansion.
Uralkali and Belaruskali are the largest producers of potash fertilizers in Eastern Europe. EuroChem, which is headquartered in Switzerland, is the fifth largest producer by capacity, followed by CF Industries (CF), which is headquartered in the United States. Yara International is headquartered in Norway, and Israel Chemicals (ICL) is headquartered in Israel.
Potash and phosphate input materials are limited by globally available reserves. Almost 81.0% of known potash reserves are concentrated in Canada and Russia, while about 75.0% of known phosphate rock reserves are concentrated in Morocco and Western Sahara. As for nitrogen fertilizers, the key input material is natural gas or anthracite coal, which are abundantly available.
So the potash and phosphate fertilizer industry is more concentrated than the nitrogen fertilizer industry, which has far more players around the globe.