Source: Fertilizer industry to cast forex nets in interbank market – NewsDay Zimbabwe April 2, 2019
BY MTHANDAZO NYONI
ZIMBABWE’S fertilizer producers plan to partner with players in the industry’s value chain, including farmers and finance houses, to pool funds and source foreign currency from the interbank market.
Zimbabwe Fertilizer Manufacturers Association chairman Tapuwa Mashingaidze told NewsDay that there was need for players in the value chain to work together for the development of the sector.
“The immediate plan is to collaborate with various players in the fertilizer value chain, including farmers and grain millers, tobacco companies, oil seeds expressors, as well as financiers to create funding structures and capacity to secure forex from the new interbank market and procure all the materials required for the next season and beyond,” Mashingaidze said.
He said there were also major investments that primary producers had in mind in order to increase the local manufacturing of major raw materials such as ammonium nitrate (AN) and urea fertilizer by Sable Chemicals, including various phosphates by ZimPhos.
“In the medium to long-term, Sable will be producing ammonium nitrate and urea from either coal bed methane from Lupane if this gets sufficiently developed soon or alternatively use natural gas brought by a new pipeline from Mozambique,” he said.
“These gas resources will create a major new class of industries, including power generation, chemicals and nitrogen fertilizers (AN and urea) production. In addition, ZimPhos is currently building a brand new sulphuric acid plant to replace the old units at Msasa and this will lead to reduced imports of phosphates and also reduce costs by 2020.”
He said the company also planned to increase sulphuric acid production and refurbish its mothballed phosphoric acid plant which would resuscitate the manufacture of triple superphosphate and other high analysis phosphates in the next few years.
“These plans also involve substantial exports into the region,” he said.
Mashingaidze said the industry mostly relied on a firm demand for fertilizers generated by an efficiently operating agricultural sector with effective funding structures.
“Adequate government support for special programmes such as command, etcetera, also boost demand and make the fertilizer business viable. The way contracts are administered can, therefore, be managed to enhance the industry’s operations and viability,” he said.
“For example, early conclusion of contracts and placement of orders before the growing season enables manufacturers to source and produce fertilizer into stock in good time to avoid shortages due to the long delivery times and logistic factors involved in the supply chains.”
He said a national fertilizer policy should be drawn up to give guidance and incentives to all stakeholders on all these issues.