Brazilian President Luiz Inácio Lula da Silva (right) and Petrobras President Magda Chambriard. Photo: Ricardo Stuckert/Presidecy

By Brasil 247 - Brazilian President Luiz Inácio Lula da Silva said the country's fertilizer production is a strategic issue for national sovereignty during a ceremony marking the resumption of construction at Petrobras' Nitrogen Fertilizer Unit III (UFN-III) in Três Lagoas, Mato Grosso do Sul. According to Brasil 247, citing Agência Gov, the project is part of the New Growth Acceleration Program (Novo PAC) and will receive more than R$5 billion in investments.

The UFN-III project, suspended since 2015, has been reinstated in Petrobras' investment plan. The federal government said the initiative aims to expand domestic fertilizer production, strengthen food security and reduce Brazil's dependence on imports in a sector considered essential for both agribusiness and family farming.

Petrobras has selected the companies responsible for completing the project. Among them is China's PowerChina, which will work alongside Brazil's Nova Engevix Engenharia e Projetos on several construction lots. Other selected companies include ETC Empreendimentos e Tecnologia em Construção, Engeko Engenharia, the Enfil/Carioca consortium and the Monto Industrial/Mendes Júnior consortium.

During the ceremony, Lula said Brazil must reduce its dependence on imported agricultural inputs. "I am proud because I still dream that we will produce more than 70% of all the fertilizer we need in this country. Because a country will never be sovereign if it does not control the main things it produces," he said.

The president added that restarting the plant represents a concrete step toward rebuilding Brazil's industrial capacity. "You can be sure: this country will build its sovereignty by becoming independent from importing fertilizers from other countries. We just have to wait and see what happens," Lula said.

According to Petrobras, UFN-III is one of the company's main fertilizer projects and has been confirmed as technically and economically viable under its 2026-2030 Business Plan. Around 81% of the plant has already been completed. The remaining work has been divided into several contracts covering infrastructure, ammonia production units, urea granulation systems, industrial automation and power supply.

The federal government estimates that the project will generate about 8,000 direct and indirect jobs while stimulating the regional economy through demand for suppliers, transportation, accommodation, food services and commerce.

The president also defended a broader strategic role for Petrobras beyond oil production, saying the company should contribute to sectors such as fertilizers, shipbuilding and the energy transition. "Petrobras plays a fundamental role in the energy transition this country is going through. It is very important for Brazil and for the world," he said.

Petrobras President Magda Chambriard said restarting UFN-III reflects confidence in Brazil's industrial capacity. "When we talk about resuming UFN III, among other things we are saying that we believe in Brazil, we believe in Petrobras and we believe in Brazilian technology and engineering," she said.

The plant's location is considered strategic because Brazil's Central-West region accounts for about 40% of national urea demand, particularly for corn, sugarcane, cotton and pasture production. Petrobras said the facility is expected to reduce logistics costs and improve fertilizer supply to major agricultural states.

Commercial operations are expected to begin in 2029. The plant will have the capacity to produce 3,600 metric tons of granular urea and 2,200 metric tons of ammonia per day, equivalent to approximately 1.3 million metric tons of urea annually, or about 16% of Brazil's current domestic demand.

Chief of Staff Miriam Belchior said the project is part of the Novo PAC strategy to expand infrastructure investment, create jobs and support economic growth. She added that the federal government is also investing in urban mobility, health, drainage and housing projects in Três Lagoas.

According to the government, Petrobras' fertilizer portfolio under Novo PAC includes four production units: Fafen-BA, Fafen-SE, ANSA and UFN-III. Once all facilities are operating, the company expects to supply around 35% of Brazil's urea market by 2029.

The government said Brazil previously relied entirely on imported urea, exposing the country to geopolitical risks, price volatility and supply chain disruptions. Officials said the war in Ukraine highlighted those vulnerabilities by affecting global fertilizer markets.

Former Planning Minister Simone Tebet, who attended the ceremony, described Três Lagoas as "a global reference" and said UFN-III will become the largest nitrogen fertilizer plant in Latin America.

Petrobras also announced the expansion of its Autonomia e Renda Program in Três Lagoas, offering around 1,400 vocational training places through partnerships with SESI, SENAI and federal education institutes, with priority given to socially vulnerable populations.

The company also maintains five environmental and social projects in Mato Grosso do Sul, totaling R$27 million in investments through 2030, including education, sustainable economic development and forest conservation initiatives.

(Reported by Brasil 247 on June 26, 2026)