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Fertilizer giant to revamp blending factories

The OCP Group – a Moroccan fertilizer giant – is to revamp the five state-owned fertilizer blending factories which were damaged following an import of substandard fertilizers, The Reporter has learnt.

The Group has agreed to make the factories operational by the end of 2018.

It is to be recalled that five state-owned fertilizer blending factories, built at a total cost of 140 million birr a couple of years ago, have ceased operation back in 2016. Particularly the case was related to an import of 75,000 tons of Boron fertilizer from Yara Switzerland for blending by these facilities.

The aforementioned fertilizer shipment was found to be below the required standards for blending. The boron fertilizer from Yara was supposed to be granular but was found to be much smaller in size. Yet again, this fertilizer shipment, which was imported in 2014/15 and 2015 /16, was distributed to fertilizer blending factories across the country.

However, these fertilizer shipments were a source of trouble to most of the blending factories as they were below the required standards and did not match with what was written on each bag as specification.

This mismatch has finally resulted in damaging the blending equipment of the factories managed under Gibe Dedessa Farmers’ Cooperative Union in Oromia Regional State, Merkeb Cooperative Union in Amhara Regional State, Enderta Farmers’ Cooperative Union in Tigray Regional State and Melek Site in Southern Regional State.

The government is estimated to have spent close to USD 1.2 million to build these blending factories. In this regard, the government has been separately importing nutrients such as Zink, Boron and potassium; blended using the aforementioned plants.

The controversies have created uproar particularly from the farmers’ cooperative unions which finally got the attention of the parliament. Four months ago, the then minister of Agriculture & Natural Resource, Eyassu Abrha (PhD), told MPs that suspected individuals related to the purchase bids and distribution of the faulty fertilizer shipment will face justice for abuse of power and mismanagement of resources.

Later, The Reporter learnt that the government has penalized Yara for the damages.

Yara is now blacklisted and has no right to participate in any bid activity to supply fertilizer to the Ethiopian government, an official from the Ethiopian Agriculture Business Corporation confirmed to The Reporter.

In addition, it is to be recalled that back in May, 2018, MPs urged concerned bodies to revamp the factories as soon as possible and help them resume their activities.

That was when OCP came to the scene to partner with the government in order to revamp these factories, Faycal Benameur, Senior Vice President, OCP’s East Africa, told The Reporter.

OCP has already signed a 15-year lease agreement with Ethiopia to oversee the renovation of the factories. Currently, the company is doing a deep assessment of the factories.

Experts from Mohammed VI Polytechnic University, R & D wing of OCP Group, will also be deployed in the process of revamping the factories as well as making sure the sustainability of the factories. In this regard, the equipments which were damaged because of the earlier substandard fertilizers will be replaced with a new one.

Once we finalize the study, we will know the total cost of each factory, which will be covered by OCP, according to Benameur.

In addition, studies will also be conducted in identifying the specific formula of the nutrients favorable for each agro-ecological area around the factories.

In this regard, an advisory board consisting of the Ministry of Agriculture, regional agriculture bureaus, Agricultural Transformation Agency, Farmers Cooperatives and Federal Cooperative Agency is already established. The board will be involved in every decision other than the operational aspect.

Once the factories become operational; OCP will also be involved in skill development of farmers and experts who will work within those factories.

Moreover, after this, the group has a long term plan to increase the number of blending factories across the country to 17.