Mhamed Ibnabdeljalil Director of Worldwide Sales & Marketing of OCP

What is the overall investment climate like right now in Morocco?

After its independence in 1956, Morocco chose the liberalized economic path and has, ever since, been slowly but diligently liberalizing its economy. We are starting to see many sectors in Morocco becoming more liberalized or privatised: telecom, banking, transportation, infrastructures and roads. This is creating a very healthy and dynamic competitive environment for growth.

Morocco today has a stable multi-party political system and very stable economic environment positioning it as a major foreign direct investment destination.

How do you see the current phosphates market?

We believe that the market today is driven not only by an increase in global demand, but also by a tight supply due to years of underinvestment. Phosphates is a very cyclical market that responds mainly to the dynamics of supply and demand. At some point, and this is typical of most commodities sectors, new supply will come in and the market will go down if it changes the supply/demand balance. But the market will remain cyclical. There is talk today of different dynamics in the market, such as biofuels, eating habits of China and India, but I don’t believe that they will get rid of the traditional market cycle.

What are the strengths of OCP’s products and of Morocco?

The main strength of our country is its natural phosphate reserves; some call it a “geological scandal”. It essentially has around 70% of the phosphate reserves in the world. Morocco’s identified phosphate reserves are estimated at around 110 billion tons. To put this in perspective, the current mineable reserves are around five billion tons, which gives us about 170 years at current production rate.

Phosphate however is a very widespread resource across the world, so you could then ask the question: what’s the big deal with Morocco? Well it turns out that most of Morocco’s phosphate reserves are less than 100 miles from major ports, resulting a significant logistic gain.

One of the biggest advantages of OCP is that we have the best cost position in the business. And if you look at the phosphate industry, it’s all about cost. Another major OCP advantage is the ability to serve customers with large volume requirements (more than one million tonnes per year); very few phosphate suppliers can reliably do this over the long term.

What are your investment priorities to consolidate your position as market leader in the future?

Our investments are centered on several axes: firstly, improve OCP’s cost position (both in production and logistics). Secondly, increase production capacity to better serve our customers in the future, and thirdly to reduce any impact on the environment.

For example, one of our major strategic projects under study is the construction of the slurry pipeline to transport rock phosphate from the Khouribga mine to Jorf Lasfar chemical plant for further processing or to port for export. That project is slated to significantly reduce the land transport cost but will also have a significant positive environmental impact with the saving of about one million cubic meters of water per year.

We have also launched a major increase in our mining capacity that will accompany our chemical capacity expansion. In the past we have relied on organic growth as well as through joint ventures for expanding our chemical capacity. As we look to the future, we are also going to encourage direct foreign investment by our customers and partners in Jorf. We are now talking about the Jorf Phosphate Hub (JPH) as a plug-and-play chemical platform where plants can be added seamlessly with JPH providing the critical infrastructure and services needed to run a very cost effective plant.

To what extent is OCP an environmentally friendly company?

We take the environmental question very seriously. As part of our new strategy, the environment will take centre stage. We are in the process of crafting an environmental strategy that will position OCP as one of the most environment-friendly company in the phosphate sector. Actually we have already kicked-off several projects with a significant environmentally positive impact. For example, OCP is now completing a carbon management strategy and will annually publish the carbon footprint of its products.

What challenges lie ahead for OCP and the economy?

We have initiated a restructuring plan at all levels which will position OCP for success. Though we are very bullish about OCP’s prospects for success, the challenges are many and the road ahead will not be easy. We have recognized this have incorporated it in our thinking as put in place the new structures and procedures We know that it’s a challenge, but failure is not an option given the significant position OCP holds in the Moroccan economy.