Disaster looms in fertiliser industry

via Disaster looms in fertiliser industry | The Herald 3 January 2015 by Elita Chikwati

Local fertiliser companies face collapse owing to duty-free imports from mostly South Africa and Zambia that have flooded the market.

One of the country’s major producers, Zimbabwe Fertiliser Company has closed its Msasa plant, leaving the one in Aspindale due to viability woes.

Other producers are on the brink of collapse.

At least 12 firms are importing duty-free fertilisers for resale.

Imported brands include Mushe Maize, Liquid Lime, Nitrex and other fertilisers for maize, tobacco, soyabeans, cotton and sugarcane.

This has led the local industry to operate at 25 percent capacity.

Fertiliser industry spokesman Mr Misheck Kachere yesterday confirmed that the local fertiliser industry was under threat.

“There have been a lot of imports throughout the year. Some people are importing the commodity for resale because there is no duty charged.

“We have about 60 000 tonnes of fertilisers in stock and we continue to produce more.

“Fifty percent of fertilisers in this country are imported duty-free and this has affected local production. The local fertiliser industry is operating at 25 percent capacity utilisation.

“We have raised concern with the Confederation of Zimbabwe Industries and the Ministry of Agriculture, Mechanisation and Irrigation Development,” he said.

Mr Kachere said low demand for local fertilisers on the market was also affecting employment.

“We cannot just lay people off their jobs as we have to follow labour laws. The companies are suffering as they have to keep the people on the jobs. This is a long-term business,” he said.

He said the quality of fertilisers being imported was not superior to the local product.

Some of the imported fertilisers are of low quality, but are being sold at a similar price with the local ones.

Windmill marketing executive Mr Wilson Gopoza said his firm’s sales had been affected by imports.

“Our major concern is that farmers may be short-changed by buying imported fertilisers that are below specifications or whose specifications have not been independently verified, especially for sensitive crops like tobacco.

“We have adequate stocks for current demand and are supplying all farmers and corporates who have approached us. The critical issue is not how much stock is available, but rather how much funding is available because there is already an oversupply for the limited funding available to farmers and corporates. Windmill has the ability to supply over 300 000 tonnes of fertilisers per annum,” he said.

Mr Gopoza said increased capacity utilisation through limiting unnecessary imports will reduce unit production costs and consequently selling prices.

“Most of the fertilisers currently being imported can be produced locally. Government already has a programme to assist farmers. We believe the scope of this programme can be increased.

“If local companies go back to full production, they will become more competitive. The scope to go to full production is currently constrained by the presence of imports,” he said.

Economic analysts have always called for the protection of the local industry against imports to ensure economic growth.

COMMENTS

WORDPRESS: 6
  • comment-avatar
    Angela Wigmore 6 years ago

    What kind of stupidity is that, allowing duty-free imports to the detriment of local producers who have enough to satisfy the requirements of our farmers? It’s obvious that some ministers/decision-makers are getting BIG backhanders!!

    • comment-avatar
      Ini Bate-Reke 6 years ago

      It is utter madness! That’s why Musona keeps reminding us that such nonsense would never happen in the pre-independence sanctions era. But here we are, with an economy on its knees, ballooning trade deficit, companies closing and thousands of jobs lost, we are busy importing what we should otherwise be making right here! And then we keep crying “sanctions” are hurting us!

  • comment-avatar
    Kenneth 6 years ago

    I doubt the reasons being forwarde here for the collapse of fertilizer industry. Lack of funds for imported chemicals, non payment for products taken by govt for its unsustainable give outs, unreliable energy suppies and of course corruption are the real reasons.

  • comment-avatar
    Kenneth 6 years ago

    I doubt the reasons being forwarde here for the collapse of fertilizer industry. Lack of funds for imported chemicals, non payment for products taken by govt for its unsustainable give outs, unreliable energy suppies and of course corruption are the real reasons.

    I refuse to be fooled, this has not been said by me anywhere……….you are lying that it has been said already.

  • comment-avatar

    Guys we have to be competetive with other countries in order to survive. Cheap and effective fertilizer is the answer.

  • comment-avatar
    Zvakwana 6 years ago

    Only one common denominator here we need new leadership,period.