Phosphate Giant Seeks Foreign Investors as War Squeezes Finances

Morocco’s phosphate giant OCP SA is looking to attract foreign investors for some of its businesses, as supply disruptions caused by the Iran war hit profits at the state-owned company.

OCP has started talks with local and foreign investors for a potential equity injection in Mzinda, its new fertilizer hub in central Morocco that’s slated to start production next year, according to a person familiar with the matter. That comes after surging sulfur prices forced OCP to slow Mzinda’s development as it sought financing to pay contractors and suppliers, the person said, requesting anonymity because the discussions are private.

Soaring costs for fertilizer inputs such as sulfur — caused by disruptions to flows through the Strait of Hormuz — are squeezing Morocco’s biggest company by revenue. OCP reported a first-half loss last month and may suspend dividends this year. The company won’t ask the Moroccan state, which owns almost 95% of the firm, for equity, the person familiar said.

OCP’s media department declined to comment.

With the company seeking to bolster its finances, it entered a joint-venture in July with Koch Ag & Energy Solutions, which will invest in Jorf Fertilizers Co.

The firm will also consider equity injections from foreign investors into its new subsidiary OCP Specialty Products and Solutions, which handles chemicals outside fertilizers, the person familiar said. SPS generated much of its $1 billion revenue last year from purified phosphoric acid that’s used in electric vehicle batteries and fluorine.

OCP, which controls over two-thirds of the world’s phosphorus deposits, reduced production in May and June by bringing forward maintenance originally scheduled for the last two months of 2026, the person said. That’s because it was running short of sulfur, which is used to produce phosphoric acid, they added.

To counter that shortage, the company has boosted output of so-called TSP, a fertilizer that requires less sulfur and no ammonia. It’s also seeking partnerships with traders such as Bunge and Louis Dreyfus Co. to promote increased TSP use in places such as Brazil and Argentina, the person said.

To further cut its reliance on sulfur from the Persian Gulf, OCP is also looking to supplies from places including Spain, Canada, Kazakhstan and the US Gulf Coast.

It also plans to acquire Chinese industrial technology to extract sulfur from locally mined pyrites. OCP, the world’s biggest buyer of sulfur, is targeting output of 1 million tons in 2027, with the potential for as much as 4 million tons in 2030, which would equate to about half of its current requirements, the person familiar said.

OCP is also looking at long-term shipping contracts to replace its reliance on the spot market, in a bid to achieve annual savings of as much as 2 billion dirhams ($203 million). The company has worked with the Massachusetts Institute of Technology to determine its shipping requirements.