Norway’s Yara has signed a Memorandum of Understanding (MoU) with Jordan’s Arab Potash to cooperate in producing and selling potassium nitrate, also known as potash.

As part of the deal, the companies will evaluate the possibility of doubling capacity at Kemapco, a subsidiary of Arab Potash.  Kemapco operates a plant in Aqaba, Jordan, with a capacity of 150,000 t/y potash and up to 60,000 t/y in batches of dicalcium phosphate (DCP), a feed additive. Yara said the plant’s output reached 130,000 t in 2017, with sales amounting to about $105 million.

Yara is targeting a minority 30% position in Kemapco with a 100% distribution and marketing agreement. Potassium nitrate is a key ingredient in solutions for fertigation, the combined application of water and nutrients to crops. The Oslo-headquartered group said fertigation is a fast-growing segment that both companies aim to develop further.

“The collaboration with Kemapco will facilitate exchange of technology and know-how and secure access to potassium nitrate that will strengthen our fertigation offering,” said Terje Knutsen, Yara’s European vice president for crop nutrition. Jamal Al-Sarayrah, chairman of the board of directors at Arab Potash, added that the deal was an important step in its plan to grow the business.

The transaction remains conditional on the usual regulatory and corporate approvals.

According to UK-based research firm Technavio, the global potassium nitrate market is expected to expand at a compound annual growth rate (CAGR) of more than 4% for the period 2017-2021, driven by a rising trend for agricultural sustainability.