Koch to acquire 50% interest in OCP's JFC III unit: companies

Koch Ag & Energy Solutions and OCP have agreed to a 50/50 joint venture in Jorf Fertilizers Company III, which would shore up ammonia and sulfur supply and leverage their logistical capabilities for shipment of fertilizers from Morocco, the companies said March 2.

The announcement amid turbulent times in the ammonia markets following the Russian invasion of Ukraine. Morocco-based OCP had lost access to ammonia supply from the Black Sea with the closure of Yuzhny port along with TOAZ announcing suspension of exports Feb. 25.

JFC III owns and operates an integrated phosphate fertilizer production facility in Jorf Lasfar, Morocco, with the capacity to produce up to 1.1 million mt annually of phosphate-based fertilizers. JFC III is one component of the Jorf Fertilizer Complex, the world's largest Phosphate fertilizer production platform. OCP would typically import ammonia, which is a key ingredient for fertilizer production.

European markets have been rattled following the loss of Black Sea production with new sources of ammonia expected to come from the Middle East and the US.

US-based Koch Fertilizer and OCP will market the joint production from JFC III, Koch said. Additionally, the companies will collaborate on the supply of ammonia and sulfur to OCP and leverage their logistical capabilities for the shipment of fertilizers from Morocco, Koch said.

Trade reports were heard of OCP securing two cargoes March 2 on a spot basis from port Jorf Lasfar. Terms were not available.

"All under control -- so far," a European trader said. "Yuzhny out, so let's see if Europe can live without Russian ammonia."

The Platts-assessed CFR Northwest Europe ammonia price from S&P Global Commodity Insights was $1,220/mt, up $40 from the prior day.