Mexico bets on domestic fertilizer production

Mexico is implementing a major strategy to reduce its dependence on imported nitrogen fertilizers. Private companies Fermachem and Gas y Petroquímica de Occidente (GPO) are investing more than $3.2 billion in two large-scale production complexes that will provide the country with domestic capacity to manufacture urea and ammonia.

Mexico currently imports about 75% of its total fertilizer demand and more than 80% of its urea, sourcing supplies mainly from the United States, Russia, the Gulf countries and China. According to Juan Carlos Anaya, Director of the consulting firm GCMA, this dependence leaves the agricultural sector vulnerable to geopolitical risks and sharp swings in global fertilizer prices. During recent market disruptions, global urea prices surged from $472 to $800 per ton, contributing to higher food inflation in the country.

The first project, developed by Fermachem in Durango State, will produce up to 1 million tons of granular urea annually. The $1.6 billion facility will use natural gas supplied from Texas and incorporate carbon capture technology. Construction began in June 2026, with commercial operations scheduled to start in 2029. The plant is expected to replace about 58% of Mexico’s current urea imports.

The second project, developed by GPO in Sinaloa State, represents an investment of $1.63 billion. Scheduled to begin operations in 2027, it will become Latin America’s largest merchant ammonia plant, with an annual production capacity of about 800,000 tons. The facility will supply fertilizers to one of Mexico’s key agricultural regions and reduce the country’s ammonia imports by approximately 70%.

At the same time, the federal government is investing in the revival of the domestic petrochemical industry. State-owned PEMEX, together with the Ministry of Energy, is constructing an ammonia and urea plant in Veracruz State. Once all planned projects reach full capacity, Mexico expects to fully meet domestic urea demand by 2029 and begin exporting the product to other Latin American countries.

Tags: fertilizers, Mexico