Building centrality in critical supply chains : the case of phosphates

Phosphate is a critical input in agricultural supply chains, yet major phosphate-producing countries vary considerably in how far they have moved beyond the extraction and export of raw phosphate rock toward the domestic production of higher-value fertilizers. Over the past two decades, Morocco has captured a substantial share of the phosphate fertilizer market and moved downstream more rapidly than larger and more established mining producers (e.g. US, Brazil, Australia…) despite not possessing their economic scale and longstanding mining expertise. This puzzling story leads to the question: How can resource-producing states use state-linked firms to move downstream in critical supply chains, and why are some more successful than others? Building on the literature on resource linkage, global value chains and industrial policy, I argue that downstream upgrading depends on the interaction of three processes: the capacity and strategic orientation of state-linked firms to sustain long-term investments; targeted investment that connects successive stages of production; and foreign partnership that strengthen technological capabilities, market access, distribution networks, and knowledge of customer demand. I develop this argument through a process-tracing analysis of Morocco’s phosphate industry and a structured comparison with Saudi Arabia and Jordan, drawing from trade and production data, annual reports and news coverage in English, Arabic and French. The comparison demonstrates that large natural endowments, large-scale investment, and foreign partnerships are not sufficient on their own to produce downstream upgrading. Their effects depend on how they are coordinated and strategically directed to expand domestic value-added production. This study contributes to scholarship on resource-based industrialization, industrial policy, global value chains, and phosphate and fertilizer supply chains.