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MIRA INFORM REPORT
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Report No. : |
509244 |
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Report Date : |
16.05.2018 |
IDENTIFICATION DETAILS
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Name : |
JORDAN PHOSPHATE MINES CO PLC (JPMC) |
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Registered Office : |
Al Sharif Al Radi Street, No. 5, Shmeisani, PO Box 30, Amman 11118 |
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Country : |
Jordan |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
16.02.1964 |
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Com. Reg. No.: |
16, Amman |
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Legal Form : |
Public Shareholding Company |
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Line of Business : |
Extraction, Processing and Export of Phosphate Rock and Phosphoric
Fertilizers. |
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No. of Employees : |
3,978 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A+ |
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Credit Rating |
Explanation |
Rating Comments |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous
Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Jordan |
B1 |
B1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
JORDAN - ECONOMIC OVERVIEW
Jordan's economy is among the smallest in the Middle East, with insufficient
supplies of water, oil, and other natural resources, underlying the
government's heavy reliance on foreign assistance. Other economic challenges
for the government include chronic high rates of poverty, unemployment and
underemployment, budget and current account deficits, and government debt.
King ABDALLAH, during the first decade of the 2000s, implemented
significant economic reforms, such as expanding foreign trade and privatizing
state-owned companies that attracted foreign investment and contributed to
average annual economic growth of 8% for 2004 through 2008. The global economic
slowdown and regional turmoil contributed to slower growth from 2010 to 2017 -
with growth averaging 2.6% per year - and hurt export-oriented sectors,
construction, and tourism. Since the onset of the civil war in Syria and
resulting refugee crisis, one of Jordan’s most pressing socioeconomic
challenges has been managing the influx of 650,000 UN-registered refugees, more
than 80% of whom live in Jordan’s urban areas. Jordan’s own official census
estimated the refugee number at 1.3 million as of early 2016.
Jordan is nearly completely dependent on imported energy—mostly natural
gas—and energy consistently makes up 25-30 percent of Jordan’s imports. To
diversify its energy mix, Jordan has secured several contracts for liquefied
natural gas and is currently exploring nuclear power generation, exploitation
of abundant oil shale reserves and renewable technologies, as well as the
import of Israeli offshore gas. In August 2016, Jordan and the IMF agreed to a
$723 million Extended Fund Facility that aims to build on the three-year, $2.1
billion IMF program that ended in August 2015 with the goal of helping Jordan
correct budgetary and balance of payments imbalances.
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Source
: CIA |
SUMMARY
Company Name :
JORDAN PHOSPHATE MINES CO PLC (JPMC)
Country of Origin :
Jordan
Legal Form :
Public Shareholding Company
Start Date :
March 1949
Registration Date :
16th February 1964
Commercial Registration Number :
16, Amman
Issued Capital :
JD 75,000,000
Paid up Capital :
JD 75,000,000
Total Workforce :
3,978
Activities :
Extraction, processing and export of phosphate rock and phosphoric
fertilisers.
Financial Condition :
Poor
Payments :
Regular
COMPANY
NAME
JORDAN PHOSPHATE MINES CO PLC (JPMC)
ADDRESS
Registered &
Physical Address
Street : Al Sharif Al
Radi Street, No. 5
Area : Shmeisani
PO Box : 30
Town : Amman 11118
Country : Jordan
Telephone : (962-6) 5607141
/ 5660141 / 5607010 / 5607141
Facsimile : (962-6)
5682290 / 5691290 / 5608229
Email : admin-jmpc@nets.com.jo
/ jpmc@nets.com.jo
/ info@jpmc.com.jo
Premises
Subject operates from a large suite of offices that are owned and
located in the Central Business Area of Amman.
Branch Office (s)
Location Description
El Hassa Owned
mine
El Abiad Owned
mine
Rusifa Owned
mine
Eshidiya Owned
mine
Industrial Complex for Fertilizers Owned
fertilizer complex
Aqaba
Tel: (962-3) 2014151 / 2017004
KEY
PRINCIPALS
Name Position
Dr Mohammed
Thneibat Chairman
Abdelfattah Abu Hassan Director
Adel Al Sharkas Director
Muzahim Muhaisin Director
Junaidi Masri Director
Mohammed Al Hmoud Director
Mohammad Kreishan Director
Salem Al Qudah Director
Mohammad Al Munaifi Director
Dr Shafiq Al Ashqar Chief Executive Officer
Mohammed Baderkhan Finance
Manager
Iyad Al Azzab Operations
Manager
Suhail Musleh Marketing
Manager
Faisal Doudin Technical
Manager
LEGAL
FORM & OWNERS
Date of Establishment : Subject’s
operations date back to March 1949, however it was registered on 16th
February 1964.
History : JPMC’s operations
date back to March 1949, however is was registered and
incorporated as a Public Shareholding Company
on 16th February 1964.
On 1st May 1986, JPMC absorbed the
operations of Jordan Fertiliser Industries
Company (JFIC), whose accumulated losses by
the end of 1985 had reached JD 40.3 million. JFIC is now operating as a
division of JPMC.
Legal Form : Public
Shareholding Company
Commercial Reg. No. : 16, Amman
Issued Capital : JD 75,000,000
Paid up Capital : JD 75,000,000
Shareholders (s) Percentage
Kamil Holdings Limited 37.00%
Jersey
Ministry of Finance 25.66%
Social Security Corporation 16.46%
Kuwait Investment Authority 9.34%
Jordan Islamic Bank 1.26%
Arab Mining Company 0.67%
Non Jordanian investors
3.32%
Other Shareholders 6.29%
AFFILIATED
COMPANIES
Name Percentage Held
Indo-Jordan Chemicals Company Limited 100%
Roya Transportation Company Limited 100%
Nippon Jordan Fertilizer Company
Limited 70%
OPERATIONS
Activities: JPMC currently operates three mines in Jordan producing phosphate rock, with a fourth mine at Al-Ruseifa having ceased production in 1985, and a downstream fertilizer and chemicals plant at Aqaba in the south of Jordan producing phosphoric acid, diammonium phosphate ("DAP"), sulphuric acid and Aluminium fluoride.
Subject was founded in 1949 with a capital of JD 1 million to exploit
the phosphate deposits in Jordan. The first mine was opened at Rusifa, north of
Amman. In the early 1960s mining commenced at El Hassa,, south of Amman and in
the late 1970s the El Abiad mine was opened 20 Km north of El Hassa. In 1988
the Shidiya mine was opened. Production of fertilisers started in 1982 at
Aqaba.
The company’s proven phosphate reserves amount to over 2 billion tonnes
and could total as much as 10 billion tonnes. The Shidiya mines has proven
reserves of 1.2 billion tonnes and possible reserves of 4-5 billion tonnes,
compared with 200-300 million tonnes of proven reserves at Al Hassa and Al
Abiad. JPMC is currently producing 6.5 million metric tons of rock phosphate
per year from various mines. Approximately 4.5 million metric tons is exported
to 20 countries worldwide. The balance of the quantity is used for
manufacturing phosphoric acid at Aqaba complex and to supply the joint ventures
as well.
JPMC currently mines and produces phosphate rock at its mines at
Al-Hassa, Al-Abiad and Eshidiya, producing various grades of phosphate rock.
JPMC is currently the only entity licensed to mine and produce phosphate rock
in Jordan. JPMC also has a dormant mine at Al-Ruseifa.
Eshidiya Mines
Eshidiya mines, which covers an area of approximately 258 square km, is
located in the south of Jordan, approximately 125 km north-east of the port at
Aqaba.
Phosphate bearing deposits were discovered in the Eshidiya region in
1975 and, following Government exploration and feasibility studies, JPMC took
over implementation of the mining project in 1987. Phosphate rock production
commenced at Eshidiya in 1988 and amounted to 3.31 million mt in the year ended
31 December 2002. JPMC estimates that the Eshidiya mining area has phosphate
bearing deposits of some 1.34 billion mt of which 810 million mt are considered
by JPMC to be "proven". JPMC believes that ongoing exploration is
likely to lead to an increase in estimated reserves in JPMC's mine at Eshidiya.
In 1999, a new deposit with 62 million mt proven reserves of a high grade were
discovered in the Upper Horizon area at Eshidiya. Production from this mine
during 2009 was 3,416,992 tonnes.
Hassa & Abiad Mines
Al-Hassa and Al-Abiad mines are located approximately 20 km apart, some 130 km south of Amman. Each of the mines has a railway terminal linking it to the port at Aqaba, 200 km to the south.
The mines at Al-Hassa and Al-Abiad, each covering an area of approximately 25
square km, were, until the development of Eshidiya in 1988, the main mining and
production sites of JPMC.
The mines at Al-Hassa and Al-Abiad produce two main grades of phosphate rock,
although selective mining and blending can produce other grades. The principal
grades produced are a standard grade 70/72 BPL, which requires only crushing
and screening followed by drying of the mined ore, and a higher grade 73/75 BPL
resulting from additional beneficiation by washing followed by subsequent
drying to reduce the moisture content to a maximum of three percent.
Production from the two mines was 491,808 tonnes (Hassa) and 1,371,893
tonnes (Abiad) during 2009.
Al-Ruseifa
The mine at Al-Ruseifa commenced production in 1935. However, owing to the depletion
of economically exploitable reserves, this mine has been dormant since 1985 and
JPMC has no plans to recommence mining operations. The total quantity of
phosphate produced during the year 2008 from this mine amounted to 44,000
tonnes, which was derived exclusively from existing stockpiles of mined ore
Aqaba fertilizer Complex
The Aqaba fertilizer complex is located at WADI 2, 15 Km south of Aqaba
city on the Red Sea coast and approximately 360 Km south of Amman.
Production started in 1982 to produce Sulphuric acid, Phosphoric acid,
Diammonium phosphate and Aluminium fluoride.
In the early nineties JPMC decided to rehabilitate the phosphoric acid
plant and sulphuric acid plant in order to upgrade its annual production
capacity, product quality & yield. The complex now comprises the following
plants & production facilities:
- Utilities plant producing
steam, water & electricity.
- Sulphuric acid plant
rehabilitated in 1994, comprising two lines of production, producing
1.45 million tons per year of
sulphuric acid.
- Phosphoric acid plant
rehabilitated in 1993, producing 350,000 tons per year of phosphoric acid.
- Granulation plant, comprises
two lines of production, producing 650,000 tons per year
DAP.
- Aluminium fluoride plant, producing
14,000 tons per year of aluminium fluoride.
On 14th January 2015, Dr Shafiq Al
Ashqar, the CEO of the Jordan Phosphate Mines Co signed a Memorandum of
Understanding with the Indian company (GNFC) to establish a factory producing
phosphoric acid in India using around one million tons annually of the
Jordanian phosphate ore.
Import Countries: Germany, the United States of America and the Far
East.
Export Countries : Subject exports approximately 85 percent of
phosphate output with a significant portion
of it going to Norway and Asian countries, as well as Germany, Australia
and New Zealand.
Subject has a workforce of 3,978 employees.
FINANCIAL
DATA
Financial
highlights provided by local sources are given below:
Currency: Jordanian
Dinars (JD 000’s)
Consolidated Balance Sheet 31/12/17 31/12/16
ASSETS
Non-current assets
Property, plant and equipment 228,979 247,197
Projects in progress 31,480 30,126
Investments in associates and joint ventures 271,996 273,466
Intangible assets 155,586 162,945
Deferred tax assets 4,941 6,537
Employees' housing loans 5,520 5,481
Financial assets at fair value through other
comprehensive income 413 452
Loans receivable 16,033 6,781
Long term accounts receivable 5,076 5,076
Production and development stripping cost 19,393 30,060
Advance payments on investments - 5,000
740,730 774,096
Current assets
Inventories, spare parts and supplies 161,235 199,894
Accounts receivable 141,716 123,683
Other current assets 27,820 24,695
Financial assets at fair value through profit
and loss 194 182
Cash on hand and at banks 5,968 13,745
336,933 362,199
TOTAL ASSETS 1,077,663 1,136,295
EQUITY AND LIABILITIES
Equity
Paid-in capital 82,500 82,500
Statutory reserve 75,000 75,000
Voluntary reserve 75,000 75,000
Special reserve 75,000 75,000
Fair value reserve (266) (227)
Retained earnings 363,544 411,076
Equity attributable to Company’s shareholders 670,778 718,349
Non – controlling interests 7,374 6,495
Total Equity 678,152 724,844
Non-current liabilities
Long-term loans 72,791 83,912
Compensation and end-of-service indemnity
provision 2,394 11,338
Asset deferral provision 14,543 13,775
89,728 109,025
Current liabilities
Accounts payable 106,541 79,215
Accrued expenses 40,116 54,425
Other current liabilities 22,662 26,988
Due to banks 92,136 101,512
Employees incentives and retirees grants
provision 744 1,058
Current portion of long-term loans 46,111 38,708
Income tax provision 1,473 520
309,783 302,426
Total Liabilities 399,511 411,451
Total Equity and Liabilities 1,077,663 1,136,295
TOTAL EQUITY AND LIABILITIES
Income Statement
Net Sales 586,666 549,697
Cost of sales (496,099) (471,964)
Gross profit 90,567 77,733
Selling and marketing expenses (8,332) (9,375)
New phosphate port terminal expenses (11,405) (11,997)
Aqaba port fees (5,090) (4,074)
Transportation expenses (57,185) (49,140)
Administrative expenses (25,198) (23,663)
Russiefah Mine expenses (1,660) (1,897)
Mining fees (18,266) (19,195)
Provision for slow-moving spare parts (594) (2,045)
Other provisions (283) (1,456)
Provision for doubtful debts (270) -
Other income (loss), net 9,343 (6,163)
Foreign currency exchange differences 756 865
Operating loss (27,617) (50,407)
Finance costs (11,452) (14,805)
Finance income 1,706 1,306
Group share of loss of associates and joint
ventures (6,093) (12,363)
Gain from revaluation of financial assets at
fair
value through profit and loss 12 23
Goodwill impairment loss (1,000) (4,074)
Impairment on investment in associates - (4,563)
Loss before income tax (44,444) (84,883)
Income tax benefit (expense) (2,209) (5,257)
Loss for the year (46,653) (90,140)
Local sources consider subject’s financial condition to be Poor.
BANKERS
Arab Bank Plc
Shmeisani Branch
PO Box: 950545 & 950544
Amman 11195
Tel: (962-6) 5607231 / 5607115
Fax: (962-6) 5606793 / 5606830
Housing Bank
Parliament Street
PO Box: 7693
Amman
Tel: (962-6) 5667126
Jordan National Bank
Jabal Amman Branch
PO Box: 1578
Amman 11118
Tel: (962-6) 5642391
Fax: (962-6) 5628809
PAYMENT
HISTORY
Regular
GENERAL
COMMENTS
JPMC is the sole entity currently operating under licence to mine and
produce phosphate rock in Jordan. In the year ended 31 December 2000, Jordan was
the sixth largest phosphate rock producer in the world, the fourth largest
exporter of phosphate rock in the world and the largest exporter in terms of
revenue in the Jordanian economy. JPMC is the largest mining and industrial
employer in Jordan.
The subject and its shareholders/owners have been searched in the
following databases; Office of Foreign Assets Control (OFAC), United Nations
Security Council Sanctions, Australian Sanctions List, US Consolidated
Sanctions List, EU Financial Sanctions List and UK Financial Sanctions List and
nothing adverse could be found on the exact names listed within the report.
During the course of this investigation nothing detrimental was
uncovered regarding subject’s operating history or the manner in which payments
are fulfilled. As such the company is considered to be a fair trade risk.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 67.52 |
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|
1 |
INR 91.49 |
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Euro |
1 |
INR 80.52 |
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JOD |
1 |
INR 95.68 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
VIV |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.