MOROCCO – OCP Group, a Moroccan state-owned fertilizer producer, has announced its new green investment program that will run from 2023 to 2027 and is worth US$13 billion.
The group said the new green investment program meant to put an end to the group’s dependence on ammonia imports and enable investment in the chain of renewable energies, green hydrogen, and green ammonia, will help consolidate its world position; reach a local integration rate of 70%; back 600 Moroccan industrial enterprises; and create 25000 direct and indirect jobs.
OCP Group Chairman and Chief Executive Officer, Mostafa Terrab noted that the group’s first investment program, launched under the King’s guidelines in 2012, helped solidly anchor OCP in the fertilizers market.
By increasing its fertilizer production capacity and delivering balanced fertilization to take up the challenges of sustainable agriculture and food security, the OCP group said it is positioned as one of the world’s leading producers and exporters of phosphate fertilizers.
The new investment program from OCP revolves around increasing the fertilizer production capacities while committing to achieve carbon neutrality before 2040 by relying on the unique source of renewable energies as well as on the Kingdom’s progress in this field.
By investing in solar and wind power, the group plans to feed all its industrial facilities with green energy by 2027.
The supply will allow the world’s biggest importer of ammonia to eventually enter the market of green fertilizer and fertilization solutions adapted to the specific needs of different soils and crops.
The Low-carbon energy will also be used to supply the new seawater desalination facilities to meet the group’s needs and provide the areas around OCP sites with drinking and irrigation water.
The green investment announcement followed outstanding Q3 financial results, where the company reported a turnover of MAD 89.5 billion (US$8.32 billion) throughout the first nine months of 2022, representing a 55% year-on-year increase compared to the same period last year.
The phosphate rock miner attributed the strong financial results to solid market conditions throughout the first nine months and its move to increase selling prices across all of its product categories.
Rock sales increased by 74% compared to the same period last year, while phosphoric acid revenue was slightly down by 6% year-on-year due to lower export volumes to Europe and India, according to the company.
Fertilizer sales generally increased by 68% due to the rise in selling prices. However, phosphate fertilizer prices witnessed a gradual decline in the second half of 2022 due to lower demand from key markets, particularly Brazil.
The group emphasized that fertilizer continues to dominate OCP’s largest share of sales, representing 65% of total sales at the end of September compared to 60% during the same period last year.
This was the opposite outlook of the company’s announcement that it expected a decline in fertilizer prices in the third quarter “due to demand impacted by record prices in the first half of the year as well as high inventory levels and unfavorable weather conditions in some regions.”
High-demand markets, including South America, Asia, and Africa, accounted for 87% of the group’s export volume over the 2022 period.
Its EBITDA improved to 48% compared to 42% in the same period last year, strengthening the group’s position in the sector as well as its ability to adapt its production and “redirect” its exports to “high-growth markets.”
OCP group also reported an investment expenditure mounting to MAD 15.22 million against MAD 7.12 million from a year earlier.