OWP liVe REPORT

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How diversification, purpose and stakeholder power turned OCP around

S T R AT E G Y

The phosphate giant’s successful transformation shows how to do well and do good. Making money and doing good are often portrayed as antitheses. But Mostafa Terrab, Chairman and Chief Executive Officer of Morocco’s OCP Group, says such apparent opposites can be reconciled. OCP was a lossmaker until a transformation started in 2006 by Terrab, who holds a master’s degree and a doctorate from MIT, and his team. Crucial to the process were a diversification from core phosphate mining into downstream fertilizer production, and efforts to empower the workforce, now numbering more than 20,000. “Our experience demonstrates the possibility of doing well financially by doing good for the world,” said Terrab, currently also President of the International Fertilizer Association.

market share for phosphate based products. Its origins stem from Morocco’s vast resources of phosphate, a rock that is one of the three core components of the world’s fertilizers. Terrab detailed how the group had turned from being a parastatal entity into a limited company, borrowed heavily to invest in its ambitious move downstream and then diversify into adjacent areas. In the process, sales, earnings and employment rocketed, generating valuable dividends for the state, the main shareholder. “People kept telling us: don’t overmanage us. So we let them free, and often, amazing things happened.” The changes included a focus on Africa, OCP’s ‘home’ market, where low fertilizer consumption and swift population growth offered opportunities. With arable land per head declining and populations

soaring, food security depended on greater fertilizer use to boost agricultural production from lows to levels closer to Europe, China and the US.

Gradual transformation

Massive investment went not just into production and the shift downstream, but also research into the soils of different African markets to allow scientifically customized products. Such ‘soil fertility maps’ meant phosphate, nitrogen and potash – the three core ingredients of any fertilizer – could be adjusted, and necessary additions, such as zinc, included for local circumstances. OCP developed customized fertilizer that increased yield up to 37% at a lower price. In addition, customization avoided the danger of water pollution, a frequent danger when more fertilizer is used than plants can absorb. Diversification also created an eco- system of linked activities. Terrab avoids the abbreviation CSR, as he sees this as

MOSTAFA TERRAB Chairman and Chief Executive Officer of Morocco’s OCP Group

OCP is one of the world’s leading fertilizer producers, with a roughly 25 per cent