Jordan Phosphate Mines Co. wins $100 million tender
The Jordan Phosphate Mines Company (JPMC) won a $100 million tender to export Diammonium phosphate (DAP) to Ethiopia, according to Amer Majali, the company’s chairman.
“The company won the tender in spite of strong competition from many countries,” Majali said in a meeting with the press last week.
The company sold phosphate to Ethiopia at “slightly below cost price” in order to re-enter the Ethiopian market lost in a tender last year due to high competition from neighbouring countries, JPMC Chief Executive Officer Emad Madadha said during the meeting.
The executives said the company, which is the second largest exporter of phosphate and 5th largest producer globally, is eyeing new customers to increase its exports and will soon sign memoranda of understanding to open more factories.
“We eye new markets such as Australia, Pakistan, Turkey, Malaysia and others because we do not want to be largely dependent on the Indian market only,” Majali said.
About 50 per cent of the company’s production goes currently to India, where demand for phosphate is declining and unstable especially after the Indian government started cutting subsidies to the agricultural sector, Majali explained.
As part of its expansion plans, the company will soon sign two memoranda of understanding with an Arab and a European country to open two new factories to increase its production and sales worldwide.
Majali indicated that the company has a strategic plan during the next five years to increase production of value-added phosphate products, noting that JPMC has so far invested around JD1 billion to produce value-added products and start new projects and the amount will increase to JD4 billion during the next three years.
The chairman attributed the fall in company’s net profit to JD6.6 million during the first half of this year from JD75.9 million during the same period in 2012 to several local and international factors.
Strikes by Customs Department personnel and at Aqaba Ports Corporation and repeated sit-ins by the company’s retired employees during the first six months slowed down exports, he said.
There was also a “huge drop” in demand on phosphate in the first half of this year, he added, noting that there were “large stocks” of phosphate worldwide.
Lower demand led to drop in prices which, in turn, affected profitability, he concluded, blaming also the increase in production costs and energy bill for a large decline in the company’s profits in the first half of 2013.
However, he said profits in the second half of this year are expected to be higher as the company is entering new markets.
The executives highlighted the impact of increase in mining fees and taxes on the company’s profitability.