Senegal’s phosphate flagship ICS gets a new lease of life with Indorama

This is part 3 of a 5-part series

In August 2014, the Asian giant Indorama, originally from Indonesia and based in Singapore, acquired 78% of the capital of Industries Chimiques du Sénégal (ICS) when the company’s activity was almost at a standstill and its liabilities amounted to $320m.

“The former flagship of Senegalese industry has gained incredible reach in the region,” says Patrice Annequin, representative in Abidjan of the International Fertilizer Development Center (IFDC), a non-profit organisation that promotes access to fertilisers.

“The Indorama group has launched a structured business plan, in terms of product development, marketing, research, and development,” he says. “They have developed technical and commercial strategies that are bearing fruit.”

Rehabilitation of industrial sites

Through a $225m investment programme, the company founded in 1976 rehabilitated its three main industrial sites – Tobène (a mining site in the Thiès region, about 100km from Dakar), Darou (phosphoric acid, near Tobène), and Mbao (fertilisers, in the suburbs of Dakar) – allowing it to restart production.

In 2016, the group also commissioned a 20MW power plant in Mboro to ensure its energy supply.

ICS, which employs more than a thousand people, produces 1–1.8 million tn of natural phosphate annually for a turnover “around $450m”, said Alassane Diallo, the company’s managing director, in August 2020, adding that “the commitments made by the company to its creditors have been honoured”.

Despite our request for comment, Diallo, who has been at the helm of the company since 2006 and has not spoken publicly for more than two years, has continued to remain silent.

ICS has seized new opportunities.

Senegal is the second largest fertiliser producer in West Africa (23%), behind Nigeria (70%), a country where Indorama is also present through a large production unit with an annual capacity of nearly 3 million tn of granulated urea.

Opportunities in India

Among Indorama’s co-shareholders are the Senegalese government (15%), the Indian-based Indian Farmers Fertiliser Cooperative Limited (6.78%) – the historical buyer of phosphate produced by ICS – and the Indian government (0.22%). Once extracted, the natural phosphate is converted into phosphoric acid. About 80%–90% of this production is exported to India by sea.

“The ICS has been able to seize new opportunities. In 2021, for example, they exported part of their MAP production (phosphate and nitrogen-based fertilisers) to the American continent because prices were more attractive and demand was stronger while covering the local market needs in NPK (combination of nitrogen, phosphate, and potassium),” says Annequin.

In Toguna Agro Industrie’s fertiliser production plant. © Baba Ahmed for JA

On the American continent, ICS primarily supplies Brazil and the United States.

In Senegal and West Africa, the group is present in NPK supply tenders. This ready-to-use used for rice, peanut, corn, or market garden crops. To manufacture NPK, especially MAP, ICS sources its nitrogen from its Nigerian sister company, benefitting from preferential tariffs and payment conditions.

“The revival of ICS activities by Indorama has repositioned the group as a strategic partner for the Senegalese government, which invests heavily in agriculture, particularly in the supply of fertilisers to farmers,” says Annequin.

What is the local impact?

As a result of the war in Ukraine, the Senegalese market is suffering from the global increase in fertiliser prices, despite the subsidy policy carried out by the Ministry of Agriculture, Rural Equipment, and Food Sovereignty.

In mid-April, the government announced an “exceptional” budget of 100 billion CFA franc for the 2023-2024 campaign, part of which is intended to facilitate subsistence farmers access to fertilisers.

While ICS supplies a certain volume of output to Senegal at a regulated price negotiated with the government, the group does not specify the importance of this contribution.

“We have lost what was once a flagship of the national industry,” says Abdou Aziz Ndiaye, a former employee of a commercial subsidiary of ICS and the author of a book* that calls it a “premeditated economic crime”.

“Until 2008, ICS was sufficiently equipped to supply the local market and neighbouring countries with fertilisers. Today, India uses on-site-produced phosphoric acid to manufacture fertilisers to the detriment of Senegal, which must now import the latter,” he says.

*Industries chimiques du Sénégal – chronique d’un crime économique prémédité, Abdou Aziz Ndiaye, Éditions Mantel, 2014.