Field being fertilized

Fertilizer Production from Phosphates

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Fertilizer Production from Phosphates

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Resource Transformation
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Chemicals
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 100 million - USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Industry, Innovation and Infrastructure (SDG 9) Zero Hunger (SDG 2)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Life on Land (SDG 15) Life Below Water (SDG 14) Climate Action (SDG 13)

Business Model Description

Develop capacities for processing locally extracted phosphate for fertilizer production and for local and sub-regional markets, to meet the growing needs of agriculture suffering from the low availability of quality fertilizers in the country and the sub-region, with public support through tax incentives, financial partnerships and environmental control to limit risks.

Expected Impact

Provide quality and cheaper fertilizers improving agricultural productivity while reducing fertilizer imports.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Togo: Maritime
  • Togo: Centrale
  • Togo: Plateaux
  • Togo: Kara
  • Togo: Savanes
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Resource Transformation

Development need
The production of natural phosphate is processed by Société nouvelle des phosphates du Togo (SNPT) in Hahotoé and processed in Kpémé which has a capacity of 4,800,000 tonnes/year. Phosphate production is entirely exported, thus limiting opportunities for added value and job creation. The lack of processing of natural phosphate means that farmers lose the opportunity to acquire low-cost fertilizers (1, 2).

Policy priority
The 2018-2022 PND planned to develop the transformation of the phosphate and limestone sectors. This objective is confirmed within the framework of the Togo 2025 Roadmap, which provides for the creation of real extraction and processing industries, including that of phosphate fertilizers and the acceleration of the exploration and exploitation of mineral resources (3, 4).

Gender inequalities and marginalization issues
The living conditions of households near phosphate mining sites are challenging. Population movements are carried out to protect them from the dangerous health, chemical and environmental types of sites. This dangerousness also keeps women away from mining activities (21, 22). SNPT employs barely 4.28% women out of a workforce of 1,356 agents, with only one entering a management position (23).

Investment opportunities introduction
Togo's agricultural policy gives an important place to fertilizers in improving agricultural productivity as part of its food self-sufficiency plan, notably through optimizing the development of planned agricultural development zones; accelerating the establishment of agropoles; and facilitating producers’ access to quality inputs (5).

Key bottlenecks introduction
Failures to respect the precautionary principle can constitute one of the main bottlenecks in the extraction and processing of phosphates in Togo. The conditions under which phosphates are exploited can cause environmental damage, which affects the health of local populations and biodiversity. Land is also seriously degraded due to open-air phosphate mining (24).

Sub Sector

Chemicals

Development need
Fertilizer needs in Togo are covered by imports while phosphates extracted in the country are exported. However, the lack of fertilizers and their misuse worsen food insecurity. Quality and more productive soils require efficient use of fertilizers whose availability and accessibility can be enhanced through the local processing of phosphates extracted in the country (25).

Policy priority
Togo, along with West African countries, is committed to accelerating investments and reforms to make fertilizers more accessible and affordable (6). The transformation of phosphates for the production of fertilizers is a necessity to stimulate agriculture, with the support of tax and customs exemptions as well as the installations of the Adetikope Industrial Platform (4, 25).

Gender inequalities and marginalization issues
Women are rarely present in phosphate extraction. No indication is provided in the phosphate processing projects as to the jobs that could be offered to women. Environmental damage impacts the living environment of women and their children. The benefits that women could expect from phosphate processing are still uncertain (21, 22).

Investment opportunities introduction
Needs are growing and their satisfaction is essential for improving agricultural productivity. West African countries have committed to tripling fertilizer consumption and doubling agricultural production by 2035 thanks to promoting investments in transportation, shipping and risk sharing for intrans manufacturers and distributors (6).

Industry

Chemicals

Pipeline Opportunity

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Investment Opportunity Area

Fertilizer Production from Phosphates

Business Model

Develop capacities for processing locally extracted phosphate for fertilizer production and for local and sub-regional markets, to meet the growing needs of agriculture suffering from the low availability of quality fertilizers in the country and the sub-region, with public support through tax incentives, financial partnerships and environmental control to limit risks.

Business Case

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Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

USD 100 million - USD 1 billion

Togo imported 121,368 tonnes of phosphate fertilizers in 2020 for an apparent consumption of 105,982 tonnes in 2020 (30). 

The Singaporean Nutrisource Group has installed a phosphate fertilizer production plant with a capacity of 200,000 tonnes in the Adikopé Industrial Platform. At a price of USD 666,667 per ton, the turnover from sales could reach up to USD 133.333 millions. It should be noted that the targeted market is not only that of Togo (1, 26).

The Chérifien des Phosphates Group (OCP) targets both the Togolese market and that of West African countries for the production of fertilizers. Consequently, production could well exceed the volume of 2023 imports of 212,233.5 tonnes of NKP type fertilizers imported in 2023 for an estimated value of USD 320.97 million, an amount exceeding the estimated market size for 2022 (1, 7, 27).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

> 25%

An example similar to the processing units envisaged in Togo is that of the industrial production of fertilizers based on natural phosphates in Kodjari in Burkina Faso. Such a project indicated profitability of 40% of over the entire planned production period (28).

In the case of phosphate fertilizer plant projects in Togo, there are no pre-feasibility studies available yet to estimate the internal rate of return and the return on investment period. Only the initial amount of the investment of The Singaporean Nutrisource Group is announced: 4.9 billion CFA francs (USD 8,166,667) (26).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

The expected investment horizon is less than five years due to the high profitability of fertilizer projects (28). An investment of USD 8,166,667 was announced by the Singaporean group Nutrisource, with a potential turnover of USD 120 million at 2024 prices assuming full capacity utilization (36, 31).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Market - Volatile

Volatility in international phosphate markets will affect the production of the phosphate fertilizer plant whose supplies will be based on international phosphate prices while fertilizer prices to farmers could be administered (to enable farmers and agro-industry companies to purchase fertilizers at affordable prices), and set at a level lower than the market (28).

Capital - Requires Subsidy

Farmers will tend to demand subsidized fertilizer prices as these may not be adjusted to phosphate input prices determined on international markets. The practice of non-free subsidized prices on the local input market constitutes an indication in this direction, meaning that companies could see their positions decline (28).

Market - Highly Regulated

The extraction and processing of phosphates, due to their negative impacts on the environment, land degradation and the health of local populations, require strong regulation and rigorous monitoring to limit the impacts and ensure repairs. This will increase costs and reduce competitiveness (8, 9).

Impact Case

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Sustainable Development Need

Fertilizer needs (NPK - Urea Potassium Phosphate) in Togo are significant to improve agricultural productivity. These needs are met by fertilizer imports, which amounted to 121,368 tons in 2020 for an apparent consumption during the same year of 105,592 tons (31).

The cost of imported fertilizers amounted to USD 80.206 millions for 101,912.3 tons in 2024 (7). Agriculture in Togo experiences low productivity due to the lack of quality fertilizers at affordable prices, making local processing of natural phosphate essential, which the country has in abundance (25).

Low fertilizer use affects crop yields, which are below 50% of optimally achievable yield levels (32). Fertilizer consumption in Togo remains low: 2.1 kg/ha compared to 40.7 kg/ha for Benin, 55.3 kg/ha for Morocco, 45.9 kg/ha for Côte d'Ivoire in 2021 (10).

Gender & Marginalisation

The extraction of natural phosphates is accompanied by limited employment of women due to lack of professional training and difficult working conditions. This activity does not give women the opportunity to earn significant income for the survival of their family members (22, 23).

Pollution, dust, noise and all other nuisances resulting from the extraction of phosphate in open-pit mines lead to local populations being displaced to new sites with losses of activities, income and quality of life that are not necessarily compensated (22).

Expected Development Outcome

Transformation of phosphates into fertilizer will permit the valorisation of natural phosphates extracted and offer opportunities of jobs creation as well the possibility for the new employed people to improve their conditions of life.

Transformation of phosphates into fertilizer will reduce imports of fertilizers and establish an import substitution industry in the field of phosphate fertilizer.

Transformation of phosphates into fertilizer will result in local agriculture fertilizers at affordable costs for stakeholders in the agricultural industry to extend their cultivated areas and improve agricultural production and productivity, ultimately contributing to food security.

Gender & Marginalisation

Transformation of phosphates into fertilizer could provide job opportunities, including for women who are exploded in the extraction of phosphates, ensuring them chances of better social inclusion.

The transformation of phosphates into fertilizers will provide resident populations, including women and youth, with skills in this area, including preventing the consequences for themselves and their environment.

Primary SDGs addressed

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.3.1 Proportion of informal employment in total employment, by sector and sex

Current Value

87.1% in 2014, 94.53% and 88.09% for men (12).

Target Value

N/A

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.2.1 Manufacturing value added as a proportion of GDP and per capita

Current Value

24% in 2021 (12).

Target Value

N/A

Zero Hunger (SDG 2)
2 - Zero Hunger

2.2.1 Prevalence of stunting (height for age <-2 standard deviation from the median of the World Health Organization (WHO) Child Growth Standards) among children under 5 years of age

Current Value

28,200 children in 2022 (11).

Target Value

N/A

Secondary SDGs addressed

Life on Land (SDG 15)
15 - Life on Land
Life Below Water (SDG 14)
14 - Life Below Water
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Workers involved in the transformation of phosphates into fertilizer will benefit from a pool of skills in the production of fertilizers, which will allow them to contribute effectively in the competitiveness of agriculture.

Gender inequality and/or marginalization

Women and girls could be involved in the activities of phosphate fertilizer production companies as part of the prevention and reduction of environmental risks resulting from the process of transforming natural phosphate into fertilizer.

Planet

Companies developing the transformation of phosphates into fertilizer will help agriculture increase its productivity and therefore reduce its material footprint and landscape degradation per unit produced.

Corporates

Companies engaged in the transformation of phosphates into fertilizer will ensure the availability of fertilizers at affordable costs and will have knock-on effects for the growing agriculture and important growth opportunities for the phosphate fertilizer production industry.

Public sector

The government will receive taxes through the transformation of phosphates into fertilizers and will save foreign currency thanks to the reduction of fertilizer imports and exports of phosphate fertilizers resulting from the natural phosphate transformation activity.

Indirectly impacted stakeholders

People

Artisans and small industries will find business and learning opportunities for their own activities through the production of fertilizers, by building warehouses and being involved in decentralized manufacturing of fertilizers to bring it closer to large customers.

Gender inequality and/or marginalization

Women and girls, including the most vulnerable among them, carrying out agricultural activities will find, thanks to the transformation of phosphates into fertilizer, the necessary inputs for the development of their agricultural activities.

Corporates

Companies transforming phosphates into fertilizers will constitute a vector of innovation for other non-agricultural activities, such as the transformation of other natural resources based on chemical processes.

Outcome Risks

The production of phosphate fertilizers, despite its contribution to Togolese agriculture, requires taking into account dust and sulphur pollution in the air that are harmful to health and the environment (14, 35).

Phosphate fertilizer production causes pollution of the water table due to uncontrolled discharges, the consequences of which on ecosystems are harmful to the environment (14, 35).

The production of phosphate fertilizers can cause displacement of populations to protect them from pollution, but can expose them to poverty if compensation is not adequate (35).

Non-payment of the public subsidy intended to make fertilizers affordable for farmers can increase the cost of access to fertilizers.

The lack of trained personnel in the fields of the transformation of phosphates into fertilizers can lead companies in the sector to seek personnel outside the country, which would lead to high labor costs.

Working conditions with limited protection of workers can expose them to recurring dust inhalation, which can affect their health and productivity.

The lack of protection of local production could encourage imports of phosphate fertilizers at lower costs than locally manufactured products, and thwart the local industry exposed to competition on the local market.

Impact Risks

The transformation of phosphates into fertilizer in a subsidized and uncompetitive system will limit the reduction in the costs of fertilizers, potentially making them less accessible to those most in need.

Gender inequality and/or marginalization risk: The field of processing phosphates into fertilizer may not create many jobs, nor have a significant impact on young girls and boys in terms of employment.

Impact Classification

C—Contribute to Solutions

What

Producing phosphate fertilizers for agricultural stakeholders at affordable prices will boost agricultural productivity and increase the country's capacity to ensure food security.

Who

Workers, companies and authorities involved in fertilizers processing will ensure that they are provided to farmers and agro-industrial companies at affordable prices for better yields.

Risk

While the business model is proven, issues of accessibility and job creation require attention.

Impact Thesis

Provide quality and cheaper fertilizers improving agricultural productivity while reducing fertilizer imports.

Enabling Environment

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Policy Environment

The transformation of phosphate into fertilizer is one of the objectives of the NDP (2018-2022) confirmed in the Togo 2025 Roadmap to stimulate agriculture, with the support of tax and customs exemptions as well as adjustments to the Adetikope Industrial Platform (4, 25).

The Togolese authorities signed an agreement with the Office Chérifien des Phosphates in May 2023 for the establishment of a local phosphate fertilizer plant. This agreement is a first result for Togo of the High-Level Round Table on Fertilizers and Soil Health in West Africa (27).

The World Bank funding is in addition to the $4 billion already in place and will finance improvements in the supply of agricultural inputs, as well as investments in irrigation, integrated soil management, the adoption of new technologies, the construction of roads in rural areas, etc (34).

Financial Environment

Art. 52 stipulates for holders of a mining title or a processing authorization, exemption from: income tax, corporate tax and the minimum flat-rate tax for its activities; VAT for all services and goods received under mining title; any duty and any customs tax, VAT for export of any mineral substances (8).

Other benefits include customs duty exemptions under Art. 53 stipulating temporary admission regime for all capital goods, machines, utility vehicles, tools, spare parts and consumable products (except petroleum products) imported for mining activities relating to the mining title (8).

Regulatory Environment

Under the mining law, Art. 55- State participation, the government may, in certain specific circumstances and on behalf of the Togolese State, research, mine or market mineral substances (8).

Environmental Code Law No. 88-14 of November 1988 established the environmental code, which is important for the regulation of mining exploitation and processing activities whose environmental impact is undeniable (9).

Law No. 96-004 on the Mining Code of the Republic of Togo regulates the conditions for carrying out mining activity in the country including processing and transformation. Art. 23 of this law stipulates the right to undertake the processing of mineral substances subject to authorization (8).

Marketplace Participants

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Private Sector

New Phosphate Company of Togo (SNPT); Cherifian Phosphate Office (OCP) (29), Nutrisource (Singaporean Nutrisource Togo) (26).

Government

Minister Delegate to the President of the Republic in charge of Energy and Mines; General Directorate of Mines and Geology; Geological and Mining Information System; Mining Cadastre System (33).

Multilaterals

African Development Bank, ECOWAS Investment and Development Bank, West African Development Bank, European Union, International Finance Corporation, World Bank Group, United Nations Development Programme (UNDP) (27, 29).

Public-Private Partnership

The partnerships in place in the production of phosphate fertilizers are those linking government with Nutrisource (26) within the framework of the Adetikopé Industrial Platform and, with Cherifian Phosphate Office for the establishment of a phosphate fertilizer factory (27).

Target Locations

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country static map
semi-urban

Togo: Maritime

The Maritime region located open to the Atlantic Ocean to the south is the phosphate mining area. It is also the region in which NutrisSource has installed its phosphate processing plant into fertilizers as part of the Adetikopé Industrial Platform (25).

Togo: Centrale

Togo: Plateaux

Togo: Kara

Togo: Savanes

References

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