OCP SA, Casablanca, and state-run Ethiopian Chemicals Industry Corp. (ECIC) have set up a jointly-funded subsidiary, Pan-African Fertilizers, in Ethiopia, with the aim of improving cooperation between the two countries and helping boost Ethiopian agricultural productivity, according to the Morocco World News outlet, citing a Moroccan official gazette announcement on Feb. 11 . The new subsidiary has been created at a cost of $50 million, and OCP and ECIC will each hold 50 percent of Pan-African Fertilizers’ assets.
According to the news report, the new subsidiary is targeting some $1.3 billion as supplementary investments by 2025 to bolster Ethiopia’s fertilizer production capacity to 3.8 million mt/y. Reaching that production level would support and meet the growing local demand for fertilizers, it said, citing OCP Chairman and CEO Mostafa Terrab, who has spoken of OCP’s plan to help Ethiopia reach self-sufficiency in fertilizer production “with prospects of investing in its potential for exportation.”
Ethiopia currently imports all of its fertilizer requirements. OCP and its Ethiopian government partners have been working to complete the estimated $2.4 billion of financing needed for the first phase of the planned joint-venture fertilizer production project – the Dire Dawa Fertilizer Complex – to be built some 250 km east of the capital, Addis Ababa. First-phase capacity is expected to be 2.5 million mt/y, with an ultimate expansion to 3.8 million mt/y targeted (GM Jan. 26, 2018).
The project was first proposed in late 2016 (GM Nov. 23, 2016), and the Moroccan group last year said it plans to start the first phase no later than 2021 or 2022 (GM Jan. 26, 2018). The planned facility is expected to produce urea and other types of fertilizer utilizing Ethiopian potash, natural gas, and ammonia, as well as OCP’s phosphoric acid produced by the Moroccan group in Morocco.
Pan-African Fertilizers is part of the Moroccan group’s wider goal to invest in intra-African capabilities to meet some of the continent’s critical challenges, including food security, according to the Moroccan authorities. The Moroccan group established OCP Africa as a wholly-owned subsidiary in February 2016, with the dedicated aim to contribute to meeting the challenge of creating structured, efficient, and sustainable agriculture on the continent of Africa (GM Feb. 26, 2016).