Morocco's OCP to Build $7 Billion Green Ammonia Plant as a Solution to Prevent Supply Issues

RABAT: Morocco's OCP, one of the world's largest phosphates and fertiliser companies, has reportedly announced that it intends to invest $7 billion in a Green Ammonia plant. The plant will use renewable fuel, specifically green Hydrogen, to increase output and meet its low Carbon goals. OCP is currently one of the largest importers of Ammonia, spending $2 billion on raw materials last year due to supply shortages caused by the war in Ukraine. The renewables push is a key part of Morocco's industrial strategy to decrease energy imports and reinforce its domestic supply chain. To address immediate supply problems, OCP has already secured a deal to purchase Ammonia from North America. The company's long-term goal is to build a plant in Tarfaya, southern Morocco, to achieve a stable domestic supply chain.

A plant is set to produce 200,000 tonnes of Ammonia annually by 2026. The production capacity will increase to 1 million tonnes by 2027 and 3 million tonnes by 2032. The plant will use Hydrogen produced from solar and wind-powered electrolysis as a raw material to make Ammonia. This initiative is part of the company's $13 billion strategy announced in December 2019 to shift to renewable energy. Morocco, which lacks oil or gas and has a difficult relationship with neighbouring hydrocarbons producer Algeria, has invested heavily in renewables due to its plentiful empty land, sun and wind, and a long coastline.

The government has set an ambitious target of increasing the share of renewable energy in the country's installed power capacity to 52% by 2030, up from the current 38%. In addition, the government is advocating for an increase in desalination to aid cities and agriculture in coping with the effects of prolonged drought.

State-owned OCP has announced its intention to rely solely on desalinated water for industrial operations by 2027. To achieve this goal, OCP plans to expand desalination capacity at Safi and Jorf Lasfar on the Atlantic coast through tenders that will be launched in early 2022. The Tarfaya initiative is set to energize a desalination plant using renewable sources, producing up to 60 million cubic meters of water annually. The plant will cater to the needs of industrial facilities.

Despite experiencing a decrease in profits this year due to lower prices, OCP recorded revenues of $11.29 billion in the previous year, up 40% from 2021, with a net profit of $4.9 billion, up 38%. However, the company anticipates a recovery in profits during the second half of this year.

The rising demand by increasing production," stated OCP - the global leader in Phosphate reserves. The company has plans to raise its fertiliser output capacity from the current 15 million tonnes to 20 million tonnes by 2027. Additionally, OCP has pledged to dedicate 4 million tonnes of fertiliser production to the African market. The company has established blending units and thoroughly mapped soil composition across 30 million hectares to facilitate customised fertilisers. OCP's investments in sub-Saharan Africa, particularly in fertilisers, align with the expansion strategies of other Moroccan firms on the continent, bolstering diplomatic relations. In late 2026, OCP will commence production at its Nigeria fertilisers plant and simultaneously begin the pre-production stage at its Ethiopia plant.