CRU: Abidjan or Andalucía - NPK Trade Altered as OCP and PhosAgro Strategies Cross Paths

PhosAgro is a low-cost and diverse phosphate producer. Its medium-term strategy focuses on increasing sales in the Russian and European markets, outlined at its 2019 Capital Markets Day in London. PhosAgro produces fertilizer at Balakovo, Metachem (Volkov), and Cherepovets, which are set to receive varying levels of investment over the coming years to increase capacity. The company plans to strategically re-organise its production assets to better match sales geography, mainly geared towards 'close to home' markets.

PhosAgro is a low-cost and diverse phosphate producer. Its medium-term strategy focuses on increasing sales in the Russian and European markets, outlined at its 2019 Capital Markets Day in London. PhosAgro produces fertilizer at Balakovo, Metachem (Volkov), and Cherepovets, which are set to receive varying levels of investment over the coming years to increase capacity. The company plans to strategically re-organise its production assets to better match sales geography, mainly geared towards 'close to home' markets.

Despite this, it has also been pushing into other regions such as the West African NPK market, dominated by OCP in recent years.

This has been very evident so far in 2020. Total NPK (excludes NP and PK) exports to major West African countries of Benin, Ivory Coast, Ghana, Togo, and Nigeria rose by 50% y/y according to available 2020 Q1 trade data. Much of this increase is from the company winning a major Benin NPK tender. For the same reason, OCP's traded market share in the region declined from a dominant 94% in 2019 Q1, to just 26% in 2020 Q1. This is surprising given OCP's more competitive freight costs into West Africa, its recent dominance in the region's NPK sales, and the company's focus on African sales.

Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2020/abidjan-or-andaluc%C3%ADa-npk-trade-altered-as-ocp-and-phosagro-strategies-cross-paths/ 

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