Rabat – Koch Ag & Energy Solutions (KAES), an American provider of value-added agriculture and energy solutions, “successfully” completed its acquisition of the Jorf Fertilizer Company III (JCF III). JCF III is owned by OCP Group, Morocco’s phosphates mining and fertilizer giant.
Koch Industries and OCP closed the transaction this Thursday, June 30, establishing JFC III as a 50-50 joint-venture between the two companies.
Commenting on the deal, Mostafa Terrab, CEO of OCP said, “Our long-term partnership with Koch is reaching a new stage through the establishment of our Moroccan-based Joint-Venture, which confirms our common goal to provide farmers with high quality and reliable Moroccan phosphate fertilizers.”
Mark Luetters, President of Koch Ag & Energy Solutions, echoed Terrab’s statement, adding that the new venture will further grow the relationship between the two partners “as [they] work together to secure JFC III’s long-term success.”
Beyond reinforcing the OCP-Korch partnership, the new JFC III venture deal opens new doors for the American giant to establish and reinforce its presence in Africa.
“The closing of this acquisition marks Koch’s first substantial investment on the African continent,” said Brad Razook, Executive VP of Koch Industries. “We are excited to add another nutrient to the KAES portfolio in collaboration with a world-class partner.”
JCF III has an annual production capacity of 1.1 million metric tonnes of phosphate-based fertilizers, and it is strategically located within the world’s largest phosphate fertilizer production platform, known as the Jorf Fertilizer Complex.
Reports say that the new deal, announced on March 2, is set to supply the fertilizer complex with American ammonia amid a global shortage of ammonia due to the ongoing war in Ukraine.
It will thus advance OCP’s plans to increase the production of fertilizers to meet the rising demand, as fertilizers are a critical component of African food security.
Read Also: OCP’s African Dominance Makes Morocco A Global Leader in Food Security
In May, the Moroccan giant reported MAD 25.32 billion ($2.50 billion) in revenues in the first quarter of 2022, marking a 77% increase compared to the same period in 2021.
The remarkable growth in OCP turnovers is attributed to the ongoing war in Ukraine, as the conflict halted the export of fertilizers to the global market from the two warring countries.
“The Russian-Ukrainian conflict intensified the tense situation in terms of supply/demand balance in the phosphate market and led to a further rise in prices, which was also supported by the increase in raw material costs, in particular ammonia,” OCP Group said in a statement.
The surge in fertilizer prices and demand for Moroccan products benefitted OCP’s economic activities. The Group notably announced its plans to increase its production volume by 10% this year to meet the global demand.
Still, the company remains reliant on sulfur and ammonia imports. The production of ammonia, for instance, requires access to energy sources that Morocco lacks.
To overcome this challenge, OCP partnered last year with Abuja, a leading African energy producer, to create a fertilizer plant in Nigeria.
