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March 13, 2011

Morocco's fertilizer push targets Africa market

by Souhail Karam

Morocco's state-run phosphate monopoly OCP said on March 10 it has started work on a new fertiliser plant as it seeks to strengthen its presence and sales to Africa's underproductive agricultural sector.

The plant is part of a plan OCP announced last year to turn the world's top phosphate reserves holder into the biggest producer of diammonium phosphate (DAP) and monoammonium phosphate (MAP) by mid-2015.

The 1-million tonne per annum plant is the second of four OCP plans to build as it gears up for a surge in global demand from farmers for fertilizers.

OCP, or Office Cherifien des Phosphates, awarded in December an EPC contract for the first plant to a joint-venture it has formed with U.S. Jacobs Engineering Group.

"This significant expansion will increase Morocco's capacity to produce DAP/MAP from the current 3 million tonnes per year to more than 9 million tons by 2015, making Morocco by far the largest supplier of phosphate rock, phosphoric acid and DAP/MAP," OCP said in a statement.

"This second unit with similar capacity will be identical to the first, and will be on-stream six months later in January 2014," it added.

The four plants -- all of which are to be in the Moroccan industrial port Jorf Lasfar -- are part of a seven-year investment plan worth $7 billion by OCP, also Morocco's top export earner.

With this plan, OCP wants to raise mining capacity from 30 to 50 million tonnes per year, more than quadruple beneficiation capacity to 38 million tonnes annually, expand Jorf Lasfar's port handling capacity to 35 million tonnes and upgrade its infrastructure.
OCP made the announcement as it hosts in the southern city of Marrakesh a conference on the use of fertilisers' in the African continent which struggles to enhance the productivity of its agriculture.

Its head Mostafa Terrab told the conference that OCP wants to forge partnerships with both public and private firms and encourage the use of fertilisers in the continent as it no longer considers Africa to be a market of secondary importance.

The firm had been focusing its business development effort on Europe, the Indian subcontinent and more recently China and Brazil.

Jim Crawford, of Hong Kong-based Quantum Fertilisers, said Africa has by far the lowest fertiliser usage ratio.

"OCP is trying to develop partnerships in Africa. The continent could be the growth area for the next 20-30 years but corruption and political instability represent a key obstacle," Crawford said.

Moussa Diarra, managing director of Malian Recoma Group, said OCP started only recently showing greater initiative to consolidate its presence in the African continent.

"For a long time, we did not even know that OCP existed despite close political and historic ties between Mali and Morocco. But OCP has been strengthening its relations with Africa in recent years," Diarra said.

He said that while OCP provides proximity and competitive pricing to African markets, it does not manufacture urea-based fertilisers.

"Mali needs around 150,000 tonnes of fertilisers per annum, half of which is urea-based. This is nothing when you consider the size of our arable land. But for rice for instance, a farmer needs to use two-thirds urea-based fertilisers and a third based on phosphates. Gulf countries are for the moment Africa's main suppliers of urea-based fertilisers," Diarra said.

Earlier this month, OCP signed a contract to supply a Kenyan firm MEA with 100,000 tonnes of DAP fertiliser annually, which equates to 25 percent of the African country's domestic needs of fertilisers. MEA said the deal is worth an annual 5.5 billion Kenyan shillings ($103.2 million).


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