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By Ahmed Eljechtimi
CASABLANCA, March 4 (Reuters) – Morocco’s OCP Group, expects to reach a deal this year to build a Nigerian ammonia plant and to start production at a $3.7 billion chemical plant in Ethiopia by 2023/2024, the chief executive of its OCP Africa subsidiary told Reuters.
The world’s largest phosphate exporter, which is 95 percent state-owned, is also considering a factory in Ghana in 2020 as it seeks to bring customised fertilisers closer to key African markets, Karim Lotfi Senhaji told Reuters.
Like many other Moroccan firms, including banks and insurers, OCP has been expanding its investments in Sub-Saharan Africa in recent years, boosting the kingdom’s economic clout.
Lotfi Senhaji said the Nigerian plant would cost $1.5 billion and would have a total capacity of 1 million tonnes of ammonia.
OCP signed a protocol agreement in June to build the industrial platform with Nigeria’s Sovereign Investment Authority.
In Ethiopia, the Moroccan firm expects its chemical plant to be operational by 2023 or 2024, with an initial capacity of 2.5 million tonnes of fertilisers, he said.
These investments are part of a strategy to boost phosphate-based fertiliser use and production in Africa where there is potential to boost consumption five-fold from about 5 million tonnes currently, he said.
“We encourage having this customisation done as close as possible to the farmers or the area of consumption. We don’t aim to produce everything in Morocco,” he said.
The group plans a blending facility in Rwanda, three in Nigeria, one in Ivory Coast, five in Ethiopia and one in Ghana, with each costing between $8 million and $12 million. “These will be launched in 2019 and we expect to have them ready in 2020,” he said.
In Ethiopia, OCP sold a customised fertiliser combining phosphates, nitrogen and sulphur which helped increase maize yield by 37 percent, he said.
The group, which controls 75 percent of the world’s phosphate reserves, has a 65 percent market share of phosphates-based fertilisers in Africa.
“In 2018, sales dropped because the market went down mainly due to a rise in international prices,” Lotfi Senhaji said.
OCP has twelve subsidiaries in Africa, but Lotfi Senhaji said the group will focus on Ethiopia, Nigeria, Ghana, Ivory Coast and Senegal.
However, OCP faces legal hurdles in Kenya where authorities allege it exported fertilizers which were non-compliant with regulatory standards.
OCP stopped shipments to Kenya last summer and asked authorities for a re-testing of its fertilisers, he said.
“We are confident that these tests will reveal that our products are fully compliant with international and Kenyan standards,” Lotfi Senhaji said. (Reporting by Ahmed Eljechtimi; editing by Ulf Laessing and Alexander Smith)