OBG talks to Mostafa Terrab, Chairman & CEO, OCP Group

Interview: Mostafa Terrab

How can phosphates processing be increased?

MOSTAFA TERRAB: One of the most important elements of OCP's transition from a state office to a corporation is that our shareholder, the state of Morocco, has made a strong commitment to a dividend policy enabling a long-term investment plan that emphasises value creation, both for the company and the environment it operates in. This paves the way for us to invest in the production capacity and infrastructure necessary to enhance our downstream presence in finished fertilisers, and to expand our mining production capacity to respond sustainably to growing global demand. Such a programme also acts as a catalyst to the local ecosystem and requires, we believe, a scale-up of both hard infrastructure (such as ports, highways and utilities) and soft elements (an attractive fiscal environment, human capital and education).

In what way do you see the price of phosphate products evolving over the medium term?

TERRAB: The surge in fertiliser prices in 2007 and 2008 resulted from a combination of long-term drivers – mounting global demand for fertilisers combined with a long-term under-investment in the sector due to historically low prices – and short-term triggers peculiar to the market that year. Our investment program is designed to help stabilise prices through increased production capacity and constant product improvement to match growing demand.

How important is environmental sustainability to increasing upstream phosphate production?

TERRAB: We are managing a precious endowment that serves a vital global need. Phosphate resources are not scarce, but are finite in the very long term, and nonrenewable with current technologies. Hence, sustainability is in our DNA. Mining is, by its very nature, an activity that affects the natural and human environment. Sustainability, a core element of our corporate strategy, has three interlinked components: how we mine and transform our phosphate; the optimisation of the environmental and social impact of our operations; and new innovations in products and use.

The slurry pipeline we are building between Khouribga and Jorf, will considerably reduce water and energy consumption and phosphate losses. OCP also promotes a “shared value” approach to our ecosystems, by fostering employability and entrepreneurship programmes, and by strengthening education and research through the Mohammed VI Polytechnic University.

What can be done to increase Africa’s fertiliser use?

TERRAB: Fertiliser use is low in Africa by global standards, but the reasons are well known. Smallholder farmers – the mainstay of African agriculture – have poor access to credit, to information about fertiliser use and to markets where they could get a fair, reliable price for any increased yields.

We are helping farmers with soil fertility maps and outreach programs; developing specialised fertiliser products for African soils and crops; and working with partners to promote investment and innovation in the sector through the Global Food Security Initiative.

What can help encourage a more stable, sustainable agricultural output on the continent?

TERRAB: The first challenge is to reverse the dramatic fall in agriculture investments seen over the last 30 years, by international institutions and donors as well as African governments. We are finally starting to get recognition that sustainable agricultural development, with a strong role for smallholder farmers, is the key not only to Africa’s economic development and rural livelihoods, but also to feeding the people of Africa and the world. Africa is not the locus of the problem of food security – it is a key part of the solution. It is the only continent in the world left where there is significant potential for environmentally sustainable yield enhancements that do not strain the use of marginal lands or threaten increasingly valuable water supplies.