Yara International, a Oslo-based fertilizer maker, said it agreed to a broad deal with Moroccan phosphate supplier OCP (Office Cherifien des Phosphates) that includes the establishment of a 50-50 joint venture in Brazil.
The joint venture will import OCP ‘ s phosphate rock to Brazil for processing by Yara into fertilizer and other products. The Moroccan state-run group, which is the world’s top phosphate reserves holder, will also provide raw materials to Yara plants in Europe.
Brazil is a fast-growing agricultural market, in a country of some 200 million people which accounts for approximately seven percent of the world fertilizer consumption. It has been importing about half of the phosphate it has consumed. Domestic phosrock production is of some six million tonnes, but in general it is located far from the production sites. The Brazilian economy is now the sixth largest in the world.
Giant Yara is also securing the long-term raw material supply for their European NPK plants.
Under the arrangement the Moroccan company will gain a 50-percent interest in Yara’s existing terminal and production plant in Rio Grande, Brazil. According to Yara its Rio Grande plant consumes some 350,000 tonnes of phosphate rock to produce up to 650,000 tonnes SSP (single super-phosphate).
Both parties have agreed on the key terms of the j-v and the deal is to be completed in the first quarter of 2012.