Food security is always an important and urgent matter but it is not an issue that is always widely reported. When the global Covid epidemic was quickly followed by war in eastern Europe, supply chains were disrupted to such an extent that shortages of food and medicine became an everyday concern for people across the world.
Not the perfect time to take over the reins of a large and diverse company which reported a 2021/22 financial loss of R541-million, you might think. But that is what faced Julian Palliam when he was named Chief Executive Officer (CEO) of Foskor in March 2022.
Foskor is a producer and distributor of phosphate rock, phosphate-based fertilisers, sulphuric acid, phosphoric acid and magnetite locally and internationally. Granular fertilisers are the core ingredient in nitrogen, phosphate and potassium fertiliser products known as NPKs. The company employs approximately 1 500 people in three locations: the Phalaborwa Mining Division, the Richards Bay Acid Division and the head office in Midrand.
It is often said that times of crisis can be times of opportunity. And so it proved for Foskor. By ramping up production of the vital ingredients for fertilisers which is the core of its business, Foskor was able to increase its order book in Europe, Asia, Latin America, the Middle East, in South Africa and across the SADC region.
With commodity prices rising at the same time, company revenue increased exponentially but there were also several measures taken to improve performance through cost efficiencies and the recovery of impairments on financial assets.
Foskor turned a profit and is now standing stronger than ever before.
The improved financial performance of Foskor has revived the possibility that the company may be listed on the JSE.
The Mining Division reports an improved safety record, maintenance of a high standard of quality management and the successful conversion of mining rights. In addition, various infrastructure improvement projects are progressing well.
At Richards Bay the Acid Division has three sulphuric acid plants, two streams of phosphoric acid plants and a granulation plant to make granular fertiliser products. Phosphoric acid is either exported in its acid form, sold locally, or used in the production of granular fertiliser at Foskor. Granular fertiliser is mainly sold locally. A recent highlight for this division is the development two new granular fertiliser products.
Looking ahead
In June 2023 the CEO and President of Foskor, Julian Palliam, was elected as a board member of the International Fertilizer Association (IFA). This gives Foskor an opportunity to be on the international map and to participate in provision of direction to the future of the fertiliser global industry, as well as to foster partnerships with global players to ensure future sustainability of the industry.
The IFA has about 450 members in 80 countries and aims to promote the efficient and responsible production, distribution and use of plant nutrients. The 2023 IFA conference topic was, “Where Food and Energy Market Meet”.
Palliam, who held several senior positions at ABB before joining Foskor as Chief Financial Officer in 2019, is credited with having the necessary strategic vision at a critical time for the company.
The improved financial performance of Foskor has revived the possibility that the company may be listed on the JSE. With a R2.8-bllion profit in the financial year to the end of March 2023, the possibility of a listing has increased after years of losses. The company’s biggest shareholder, the Industrial Development Corporation, has signalled its intention of selling down its majority share. If this were to happen, the injection of new shareholder capital would further boost Foskor’s prospects.
If Foskor were to expand, jobs would be created and Foskor is active in helping create the next generation of engineers. The Foskor Graduates and Graduates in Training bursary programme is currently supporting 14 students in mechanical, electrical, mining, chemical and electronic engineering, accounting and geology.
In addition, Foskor runs a Leadership Development Programme in partnership with the University of KwaZulu-Natal (UKZN). The programme aims to build a talent-development culture aligned with Foskor’s philosophy, vision and values. As a skills-based organisation, Foskor recognises the importance of talent management. The development programme was designed for the middle and senior management to improve their management leadership skills.
Topics covered include an understanding of key theories and approaches of leadership and management, knowledge of leadership roles and techniques, development of an ability to gather, evaluate and use information to make informed and well-reasoned decisions, an understanding of communication theory, and the ability to communicate effectively with a wide range of audiences, using an array of media and types of technology, and an understanding of ethical behaviour in leadership and management.
When Palliam congratulated the participants during the latest graduation ceremony, he encouraged them by sharing the famous quote by Steve Jobs, “Stay hungry, stay foolish.”
Also read: A practical, three-pronged approach to food security
Markets
Foskor is the leading domestic producer and supplier of phosphate-based products: phosphate rock, phosphoric acid and mono-ammonium phosphate. Beyond serving the local market and SADC regional markets (DRC, eSwatini, Zimbabwe, Zambia, etc.), Foskor supplies phosphoric acid and mono-ammonium phosphate to international markets, particularly India, the world’s largest market of phosphate products.
The company also supplies phosphoric acid to other international markets (Brazil, Bangladesh, Saudi Arabia, United Arab Emirates, Belgium and France). While the bulk of phosphate-rock concentrate is used in the Foskor phosphoric acid manufacturing plant, available products are also exported to international markets (Belgium, Netherlands, Norway, Lithuania, New Zealand and Japan).
