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Letter of Intent signed to investigate the feasibility of producing synthetic fertiliser domestically

HS Orka, Kaupfélag Skagfirðinga and Fóðurblandan will conduct a feasibility study for a plant, located in Iceland, to produce fertiliser. The parties have signed a Letter of Intent to that effect.

The co-operation is intended to produce Ammonium nitrate (NH4NO3) with domestic green energy to satisfy domestic demand for solid synthetic fertiliser for farmers as well as others who need it for agriculture. The domestic market for synthetic fertiliser is about 45–50 thousand tonnes a year, and the domestic need for the principal element, nitrogen (N), is 10 thousand tonnes. It is estimated that 30 thousand tonnes of Ammonium nitrate need to be produced to obtain this quantity of nitrogen. The feasibility of exporting Ammonium nitrate produced with green energy will also be investigated. If a feasibility study reveals that fertiliser production might be cost effective, the parties will proceed further. It is assumed that the feasibility study will be completed in September of this year.  

The aim of the co-operation is to participate in infrastructure development of the country, strengthen the security of domestic food production, investigate the feasibility of exporting fertiliser produced with green energy and strengthen the basic operation of the parties at the same time.  

Sigurjón Rúnar Rafnsson, Assistant Manager of Kaupfélag Skagfirðinga, emphasises the operational security of Icelandic food production and its sustainability in accord with the environment and the community. “If the outcome of this project turns out to be favourable, we will strengthen these factors. We will thereby increase Icelandic production and the food security of the nation, create more jobs and ensure that our clients, farmers and others, will receive fertiliser produced with green energy at an affordable price for Icelandic agriculture.” 

Eyjólfur Sigurðsson, the Manager of Fóðurblandan, states: “This will give us the opportunity to produce fertiliser with green energy and reduce the carbon footprint of Icelandic agriculture. We are dependent on uncontrollable circumstances in surrounding countries and must therefore increase our independence in fertiliser production and make use of Icelandic know-how to build up Icelandic production.” 

Tómas Már Sigurðsson, the Manager of HS Orka, states: “We shall especially have regard to the feasibility of utilising side products and value flows from other companies in our Resource Park, as well as look into whether our production can be of use for other companies in the area. The project would thus support the domestic use of raw materials as well as the circular economy of the area.” 


Further information:  

Jóhann Snorri Sigurbergsson at HS Orka (, tel. 855 9304) 

Eyjólfur Sigurðsson at Fóðurblandan (, tel. 899 8750) 

Sigurjón Rúnar Rafnsson at Kaupfélag Skagfirðinga (, tel. 864 6647)