Director-General of Gafsa Phosphate Company (GPC) Ramadan Suweid says it is unlikely the state will sell GPC, although he acknowledges the company’s financial woes. But he says that phosphate production decreased due to social unrest and not from a lack of foreign demand.
Ramad Suweid, GPD was a lucrative business for the state prior to the revolution (in 2011), today GPS suffers from production and export problems. How do you view the current situation?
Director-General of Gafsa Phosphate Company (GPC) Ramadan Suweid says it is unlikely the state will sell GPC, although he acknowledges the company’s financial woes. But he says that phosphate production decreased due to social unrest and not from a lack of foreign demand.
Ramad Suweid, GPD was a lucrative business for the state prior to the revolution (in 2011), today GPS suffers from production and export problems. How do you view the current situation?
The phosphate sector in Tunisia is strategically important. Prior to the revolution, the sector used to contribute three to four percent to the country’s GDP and accounted for 15 per cent of total Tunisian exports. It produced nearly eight million tonnes annually, processed in the Tunisian Chemical Group (TCG) plants to produce phosphate derivatives of high added value, highly demanded all over the world.
After the revolution, however, and due to protests and people’s rising demands, production units were disrupted and production fell to a record low of about only three million tonnes.
What are the estimated losses to the sector in the last five years after the revolution?
They are significant. Before the revolution, the GPC and the TCG made an annual profit of US$ 400 million, but today the two companies are almost in deficit and they suffer severe financial difficulties.
The losses in the last five years reached around US$ 2.5 billion, equal to a loan obtained by Tunisia from the International Monetary Fund in 2013. This means had the sector retained the same pre-revolution profits, Tunisia would not have had to take the loan, especially since phosphate prices have been very high in the last years.
How many global markets has the sector lost as a result of this deteriorating situation?
Tunisia ranked among the countries with world’s largest phosphate production and exportation. It used to export phosphate to a large number of countries, notably Turkey and China. Tunisia has been working in this field for over 100 years. European farmers prefer Tunisia’s high quality phosphate derivatives.
However, production declined after the revolution, reducing exports by 40 percent. It is not true that Tunisia lost customers; only exports declined, forcing our customers to resort to competing countries, such as Morocco.
Some say the state may sell the GPC to foreign investors in light of the difficult economic and financial conditions. Is that true?
Selling the GPC or TCG is a red line, which no state official thinks about. However, partnerships are possible, especially since many countries formed partnerships in phosphate production and extraction, as in Jordan, Morocco and South Africa.
In the future, if Tunisia’s annual production exceeds 12 million tonnes, partnerships will become inevitable because of the great international competition that necessitates a strategic foreign partner to further strengthen the sector’s position in the global market.
One reason for stalled production in the GPC is frequent protests by the unemployed. Have you not been able to employ part of them to restore production?
This is true. Gafsa, in southwestern Tunisia, witnessed great social tensions due to these protests staged in different areas of the mining basin. This caused the closure of the bulk of production units and cut the railway transporting phosphate to the TCG. Therefore, phosphate extraction fell to low levels where production in 2015 equaled that of 1928.
We understand protesters’ demands for jobs. Since the revolution, the GPC has made great efforts in employment. As a first step, it created a planting and environment company to absorb the unemployed and employ a large number of university graduates.
This upward trend of employment continued. Most recently, 260 people were employed through transparent and fair competition. Also, a few days ago, we announced the employment of 1,700 executive officers distributed to all production units.
Does this mean that your only solution is to absorb part of the unemployed? What about GPC’s contribution to investment and funding of private enterprises?
The GPC is engaged in the corporate social responsibility project. In this context, it has allocated nearly US$ 30 million to two public banks over three years (2015-2017) to finance enterprises by the unemployed. It is expected that the project will benefit hundreds of young entrepreneurs.
One demand of the people of Gafsa is to give the region part of the phosphate revenues. Is it possible?
Gafsa Governorate and the mining basin suffer a serious lack of development projects and the solution is equitable distribution of wealth, which has been merely a slogan for several decades, and to diversify the economic base in the region.
Now, the GPC needs to recover to achieve profits in order to use part of them in job creation and in meeting the demands of development and basic facilities in the region.
In my opinion, the real problem is that Gafsa Governorate only depends on phosphate. Therefore, the solution lies with diversifying the economic base and creating real dynamics in the field of entrepreneurship and creation of job opportunities in new areas.