‘The future of OCP is green development,’ says CEO Mostafa Terrab

By Estelle Maussion, Julien Clémençot
Posted on Friday, 4 June 2021 21:33

OCP’s CEO Mostafa Terrab in Paris in 2018. HOC

In this first part of an exclusive interview, OCP’s CEO Mostafa Terrab outlines his group's roadmap for the next 10 years.

65-year-old Terrab is internationally recognised. He was endorsed by Hassan II in the early 1990s when he joined the royal cabinet. Terrab remains a great state representative and is passionate about contributing to his country’s position on the world stage.

OCP – the Moroccan fertiliser giant – that has been under his leadership since 2006, has been totally transformed ($6.1bn in turnover in 2020). It is now diversifying its activities; modernising its infrastructure and governance; and investing in research and development.

The man who has been in charge of OCP since 2006 rarely speaks to the media. However, he agreed to grant us an interview, which we have published in two parts.

In this first part, the Moroccan boss unveiled his group’s strategy for the period 2021-2030. The board of directors is expected to endorse this plan by the end of the year.

The Fez-born executive outlined OCP’s next steps. This involves a green shift, which will be implemented through innovative methods developed at Université Mohammed-VI (owned by the OCP group). These will help build a more environmentally-friendly industry, centred around decarbonisation and water preservation.

At the end of March, OCP made its first fertiliser sale (to Ethiopia) via blockchain. Will the group be using more of this technology in future? 

Mostafa Terrab: Let me correct that. We have not made any sales via the technology you mention. The sales in Ethiopia are the result of a call for tenders dating from October 2020. In this pandemic period where some supply chains have been disrupted, we have been using a trusted third party platform to exchange secure documents needed for payment media and to reduce the processing time of commercial transactions.

The blockchain principle is the basis for creation of crypto-currencies, the best of which is known to be Bitcoin. Are you interested in this new kind of currency which is not managed by central banks?

As I mentioned, in agreement with our client, we have used the technology in question to secure and accelerate payment. Our export revenues are in dollars and euros only.

For several years, OCP has diversified into the sectors of data analysis, agriculture and energy. Each time, you seek to be at the cutting edge of knowledge. What is the objective of this policy? To not miss the innovation that will revolutionise the fertiliser sector?

Two things need to be distinguished. On one hand is knowledge accumulation, talent training, research and development – all of which are the UM6P’s responsibility. On the other hand is the transfer of accumulated know-how and integration of innovation at the OCP level.

In this respect, digital and data analysis; innovations in agricultural research; water and energy are necessary for the production, supply-chain optimisation and customer service. Finally, decarbonisation and mobilisation of non-conventional water resources (recycling and desalination) are levers for sustainable development.

For more than two years, the group has had a sustainability platform in place that incorporates the main sustainable development objectives adopted by the international community, including action with regard to communities.

You also intend to be a player in the hotel industry. In 2020, you mobilised MAD1bn ($113m) and another MAD320m ($36m) this year. This is a far cry from your core business…

Do you know that we have our own hotel infrastructure, as well as residential accommodation, resorts and now, student accommodation? Managing this stock properly, being linked to prestigious establishments and training executives for this sector (through the UM6P and its recognised international partners), allows us to generate synergies and place ourselves as well as our partner – the Hassan II Fund for Economic and Social Development – at the service of one of our country’s most strategic sectors. This explains our commitment to the hotel industry.

In 2022, the EU will change its regulations by lowering the level of cadmium allowed in fertilisers, because of the toxicity of this substance. This substance is more present in your production than in that of your competitors. What impact will this decision have on your exports to the EU (20% of the total in 2020)?

Today, and well into 2022, we are meeting the European standards for cadmium levels (60 ppm). In fact, all the scientists specialising in this issue state that higher levels of this substance are found in soil than in fertilisers. As you will soon learn, all OCP fertilisers will comply with and exceed the strictest regulations in this area.

Our current development plans, ongoing transformation and future investments are part of a green development strategy that intends to use renewable energies, mobilise non-conventional water resources and recycle waste as well as short circuits. Today, the energy used in our processing plants in Safi and Jorf Lasfar is clean, as we recover water vapour.

Similarly, all the energy used for the Boukraa mine is wind-generated. The Slurry pipeline, which is used to transport phosphates from Khouribga to Jorf, allows us to save 3million m³ of water, reduce our carbon footprint by nearly 1m tons of CO2 equivalent and optimise our transport logistics costs!

More generally, what do you think of the growing number of experts who are calling for a reduction in the use of fertilisers for ecological and health reasons? Should the quantities used in countries with intensive agriculture be reduced?

For more than four years, we have been diversifying our fertiliser portfolio and conducting research as well as agronomic trials on the use of fertilisers for the right soil, the right crop and at the right dose.

However, we should not forget that phosphorus – which is an essential element for life – is an organic element and not a synthetic one. I would add that – in regards to human health – only fertilisers can provide essential nutrients (such as zinc) to plants, and also neutralise cadmium, according to experts.

Customising our products to suit the needs of farmers, soils and crops is an effective part of this. Therefore, fertilising our soils in an environmentally friendly way ensures food security and soil health; it also helps fight deforestation. If properly used, it can also contribute to carbon sequestration.

On the other hand, fertilisers are still not used a lot in Africa. Is this changing?

You know that the continent has the potential to feed the whole world. Most of the arable land is in Africa. The continent will double its population by 2050. This is why our commitment in Africa is not as a fertiliser supplier but rather as a partner in the development of public policies in agronomy, rural development and, where appropriate, industry.

This is how we view our industrial commitment in countries such as Ethiopia and Nigeria, that have one-third of the African population. Our university is also committed to this and as such, presents itself as an institution for training African talent.

A little over six months ago, you appointed Mohamed Anouar Jamali to head OCP Africa. Were you not satisfied with the results in this area?

Mohamed Anouar Jamali is someone who knows the continent well and has done excellent work for UM6P in terms of African cooperation. He succeeded Karim Lotfi Senhadji, who took up the important responsibility of handling the group’s finances.

How should we interpret the decline in recent years in OCP’s exports to Africa, from 27% in 2017 to 21% in 2020?

You seem to forget that our Africa strategy is not even 10 years old. In 2013, we were capping at 50,000 tonnes of exports per year to Africa, and today, our volumes are at around 3m tonnes per year. If you judge performance by volume alone, you won’t have the right indicator of performance.

In some countries, including Nigeria, we have invested in blending units where products are customised locally to suit the needs of the soil and crops. I would like to point out that the OCP Foundation was involved in drawing up a soil fertility map in certain African countries, with the precise purpose of carrying out this customisation.

What is OCP’s strategy in Africa? Is your approach of combining business development with providing support for development projects proving successful?

I think I have provided enough information to shed light on our approach on the continent. It is based on the conviction that Africa has the means to take charge of its own destiny. We are simply trying to contribute to this.

In March, you signed an agreement with Nigeria to build a $1.3bn fertiliser plant there. Several groups, including Dangote, also have major projects there. How do you intend to establish yourself in this huge market? Will this project also have a regional scope?

This agreement was signed in Morocco following a decision made during His Majesty King Mohammed VI’s visit to Nigeria in December 2016. It brings together Morocco’s phosphate resources and Nigeria’s gas resources for the benefit of Nigerian agriculture and this great country’s immediate neighbours.

Are you going to increase your number of factories in Africa? Wouldn’t this be to Morocco’s detriment?

To the contrary! A company that wants to be global increases its opportunities for growth whenever the interests of the parties concerned are clear. Proximity also makes it possible to adapt our products to farmers’ needs, thereby reducing the cost of inputs.

It’s also important to remember that this growth, which is made possible by investing as much as possible in the markets, increases the value of phosphorus, which is then available to all! This is the main reason for our approach.

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