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French Version

Fertilizing growth

Jordan may be short of most of the natural resources that other countries in the Middle East region have in abundance, such as oil and gas. However, it has some of the world’s most extensive reserves of phosphate ore, much in demand for use in fertilizers. With estimated reserves in excess of 1.7 billion tons, Jordan is the world’s sixth largest producer of rock phosphate and the second largest exporter.

The kingdom’s monopoly producer of phosphate is the Jordan Phosphate Mines Company (JPMC), set up in 1949 and turned into a public shareholding company in 1953. With a workforce of more than 4,000 employees, JPMC is the country’s largest industrial employer.

Apart from the mines it works at Hassa, Eshidiya and Abiadh, JPMC also operates a fertilizer and chemical plant in Aqaba on the Red Sea, producing Di-Ammonium Phosphate, Sulphuric Acid and Aluminium Fluoride, and has its own port facility outside the main harbor facility.

According to figures released by the Department of Statistics on February 13, overseas sales of fertilizers amounted to $320 million or 7.9 percent of Jordan’s exports in 2006. This ranked the sector, and with it JPMC, second only behind the clothing industry as an export earner.

One of the reasons Jordanian phosphate is in high demand is because of its low levels of heavy metals such as Cadmium, Lead, Mercury, Arsenic and Zinc. This gives JPMC an edge in the global market over its rivals. The mining of phosphate also drives other sectors in the economy, notably the production of chemicals.

On March 13, JPMC announced it had turned in a record-breaking year in 2006, with revenues higher than in any time in its 54-year history. Out of total revenue of $415.8 million, JPMC generated a post tax profit of $22.5 million, well up on the comparative figures of $401 million and $14.5 million for 2005. The improveAd profit margin despite a rise in expenditures, attributed to high fuel prices and an increase in income tax, were partly due to the company’s processing of phosphates.

Announcing the results, JPMC’s Chairman and CEO, Mr Walid Kurdi, said the company’s board would recommend a payment of $10.5 million in dividends to shareholders, the first such distribution since 1996.

Of the company’s three mines, output at Eshidiya exceeded 3 million tons in 2006, with Hassa and Abiadh producing well over 1 million tons each. JPMC announced that it is going to scale down production at the latter two facilities, concentrating its mining activities at Eshidiya, which is at the center of the richest vein of phosphate ore in the country.

A report on the outlook of the Jordanian economy recently published in the local press said the country’s exports could grow beyond the anticipated 14 percent this year if JPMC further improved its production.

This is exactly what JPMC is planning to do. By rationalizing its production and focusing on its Eshidiya Mine, the company hopes to further boost output while also reducing overheads.
One area in which JPMC has been working to improve its performance is adding value to its production. Rather than merely exporting raw phosphate ore, the company has moved to increase its phosphate processing capacity, selling refined ore and fertilizers produced at its Aqaba plant. Production facilities have been upgraded and new markets sought.

On January 31, JPMC signed a memorandum of understanding with Indian Farmers Fertilizer Cooperative (IFFCO), the sub-continent’s biggest manufacturer of fertilizers, to set up a joint venture to construct and operate a Phosphoric Acid facility at Eshidiya. When operational, the plant will have a daily capacity to turn out 1,500 tons of acid, all of which will be exported to the Indian market.

JPMC has a long history of international joint ventures. In 1992, JPMC and the Arab Potash Company established the Nippon Jordan Fertilizer Company (NJFC) with a consortium from Japan to produce fertilizers for export to the Japanese market. Holding a 20 percent stake in the venture, JPMC has another small but solid revenue earner, with the NJFC making profits of $2 million in 2005, the last year for which figures were released.

With new reserves of phosphate being identified and existing supplies sufficient to keep processing plants operating well into the next century, JPMC seems set to retain its standing as one of Jordan’s leading companies.

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