OCP Responds to Media Reports on PhosBoucraâ Subsidiary
By Business Wire News
By Business Wire News
Recent media reports and statements on The OCP Group (“OCP”) and its subsidiary PhosBoucraâ have contained extensive and serious factual errors and gross misrepresentations. Abiding by its policy of open communication, OCP wishes to share basic relevant facts about its operations, and particularly those of its subsidiary Phosboucraâ.
OCP, headquartered in Morocco, is one of the world’s largest fertilizer companies, and the leader in the phosphates sector. Created in 1920 as l’Office Chérifien des Phosphates, a state administration, OCP was transformed in 2008 into a corporation (“société anonyme”) operating under Moroccan corporate law, of which the Moroccan state remains a majority shareholder. OCP serves customers on 5 continents with a broad range of products designed to increase agricultural yields under three paramount guiding principles: sustainability of natural resources, rural development -especially in Africa, and food security for a growing global population.
Phosboucraâ is OCP’s fully owned subsidiary operating under Moroccan corporate law and fulfilling the strictest criteria of applicable international and United Nations doctrine. Phosboucraâ was founded in 1962 by the Spanish Institute Nacional de Industria (INI). In 1976, OCP purchased a 65% stake in Phosboucraâ. The OCP-INI joint venture continued until 2002 when OCP acquired the remaining 35% stake in Phosboucraâ. Since 2002, Phosboucraâ has been a wholly owned subsidiary of OCP, operated and managed to the same high, sustainable standards as all of OCP’s mines across Morocco. OCP develops local phosphate reserves in a way that is transparent, responsible and benefits the population.
Phosboucraâ develops OCP’s smallest mine at Boucraâ, with a total production capacity of 2.6 million tonnes per year, from a reserve base that represents less than 2% of OCP’s reserves. OCP is committed to ensuring the long-term viability of the deposit at Phosboucraâ. The nature of the deposits at Phosboucraâ as well as the challenging geography of the site -the phosphate extracted at Phosboucraâ has to be transported by an 100 km conveyor through the desert to the processing center at a port in Laâyoune – mean that the cost of extraction at Phosboucraâ is 2.5 times that of OCP’s other mines in Morocco. For these reasons, until recently the operation was unprofitable. OCP has invested substantially to improve operational efficiency, upgrading the capital stock and strengthening the sustainability of the mine and associated infrastructure.
Since 1976, when OCP entered into its joint venture with INI in Phosboucraâ, long-term development and sustainability of operations rather than short-term profitability has been the focus as shown by the consistent reinvestment of profits into Phosboucraâ, with no dividends being distributed to OCP. Operational improvements along with market dynamics in the phosphate industry have finally allowed Phosboucraâ to become profitable since 2007. Since then, all of Phosboucraâ’s profits are retained by the subsidiary and reinvested in its local operations and in the local community. Capital expenditure is a priority that OCP has fostered since becoming sole owner of the mine. In that regard, half of total investments since 1976 have been made over the last ten years of sole ownership. Another major policy, particularly since 1997, has been the focus on working with local providers in expending capital.
The large majority of the roughly 2300 employees of Phosboucraâ are locals, supplemented by personnel from other OCP operations who have specific expertise relevant to Phosboucraâ’s needs. Phosboucraâ is the largest local private employer and a major contributor to economic life and social infrastructure. A particular emphasis of capital expenditure, as in the other mines and processing sites, has been improving the lives of Phosboucraâ employees with investment in housing, cultural and health facilities along with educational support and social programming for retirees, employees and their children. This policy has spread to the wider community through spending on external social activities which has risen over the last seven years for projects ranging from urban beautification to community health projects to environmental protection.
About The OCP Group:
The OCP Group is the largest global producer of phosphate rock and phosphoric acid, and a leading global fertilizer company, backed by almost a century’s production history. The Group has exclusive access to Morocco’s phosphate rock reserves, the largest global reserve base according to the USGS. The Group is a leading low-cost producer of phosphate rock, and it has become a leading player across the phosphate value chain. For more information visit: WWW.OCPGROUP.MA
The OCP Group