RI, Moroccan companies exploring joint projects to produce fertilizer feedstock

Jakarta (ANTARA News) - A consortium of four Indonesian companies led by PT Petrokimia Gresik (PT Petrogres) and the Moroccan state-owned OCP (Office Cherifien des Phosphates) Group are to explore the feasibility of joint projects to produce fertilizer plant feedstock in an effort to ensure their supply amid their rising world market prices.

The two sides` agreement to do the exploration was formalized in a Memorandum of Understanding (MoU) signed by PT Petrogres President Director Arifin Tasrif and OCP Marketing and Sales Director Mhamed Ibnabdeljalil on the sidelines of an International Fertilizer Association (IFA) conference in Nusa Dua, Bali, on Wednesday.

Mhamed Ibnabdeljalil said the MoU was an initial step to study the feasibility of projects OCP intended to undertake together with the consortium of PT Petrogres, PT Pupuk Kalimantan Timur (PKT), PT Medco Energy International Tbk, dan PT Bosowa Investama.

"We want the feasibility study to be completed in six months` time after which we will move to the next stage of the cooperation," Mhamed said.

He said the two parties would cooperate to set up an integrated posphate acid factory in Morocco which had the biggest posphate rock reserve in the world.

According IFA data, Morocco had a reserve of about 21 billion tons posphate rock and its posphate production in 2006 stood at about 27.1 million tons or the third highest output in the world after China and the United States.

"We will also collaborate to build an ammonia plant in Indonesia to ensure ammonia supply to make fertilizer in Morocco," the OCP executive said.

PT Petrogres chief Arifin Tasrif said the cooperation was intended to ensure stable supply of phosphate for the production of various types of fertilizer needed in Indonesia such as DAP, SP-36, and NPK.

"The world market prices of fertilizer feedstock such as phosphate are now constantly rising because demand is exceeding supply in line with the development of bio fuels in many countries," he said.

The Indonesian side was hoping that through the cooperation it would be assured of stable supply of posphate, phosphate acid in particular, for the production of non-urea fertilizer at a favorable price while the world market prices of these commodities were on an upward trend.

So far, non-urea fertilizer makers in Indonesia, PT Petrogres in particular, were importing posphate rock and posphate acid from several countries, including Morocco. The price of phosphate rock had continuously increased from $70 per ton early this year to $150 late this year.

"We expect this cooperation to be able to ensure supply of phosphate to Indonesia as demand for non-urea fertilizers such as NPK is expected to continue to increase and reach four million tons by 2020," he said.

The envisaged phosphate factory in Morocco would have a production capacity of 300,000 to 400,000 tons a year and was estimated to require an investment of $225 million to $360 million.