Masawara’s Sable Chemicals to invest $25mln over the next two years

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    Harare – Fertilizers maker, Sable Chemicals says it will invest about $25 million over the next two years in a bid to ramp up production.

    Sable Chemical Industries Limited is a fertilizer manufacturing company mainly producing Ammonium Nitrate (fertilizer and explosive grades) and other products which include Ammonia, Nitric acid, Oxygen (liquid and gas), 83 percent AN solution De-ionized water.

    Chief Executive Officer (CEO) Bothwell Nyajeka told a recent gathering in Midlands that Sable Chemicals seeks to, this year, produce 60 percent of the country’s fertilizers.

    “Our target production for 2019 is 100,000 tonnes of ammonium nitrate which will account for 60% of the country’s fertilisers. We will invest $25 million in 2019/20 and our aim is that, by 2020, we should be able to produce 150,000 tonnes of ammonium nitrate and then, by 2022, wrapping up to 200,000 tonnes. In 2023 our big project is actualising ammonium making and urea production.”

    The company also intends to localise the sourcing of ammonia gas which is currently being imported from neighbouring South Africa.

    The agro-chemical company has been struggling in terms of capacity utilisation which had fallen to unsustainable, largely due to the shortage of foreign currency which is needed for the importation of ammonium gas, a critical input from South Africa.

    The Kwekwe-based fertiliser maker relies entirely on imported ammonia after it switched off its electrolysis plant to cut costs on electricity, which was its major cost driver. The 14-unit electrolysis plant consumed around 104 MW — the size of a power station-to break down water into oxygen and hydrogen, the latter of which was reacted with nitrogen in an ammonia synthesis plant to produce ammonia.

    According to management the company is presently operating at 28 percent capacity utilisation, which translates to 32 000 tonnes output against a capacity of 240 000 tonnes of AN per year.

    At full capacity, the company produces 240 000 tonnes of nitrogenous fertiliser which, in the 1990s, was all absorbed by the domestic market.

    The shortage of foreign currency is something that continues to happen in Zimbabwe until the country completely re-engagement with the global community.

    The country and companies have to pay arrears from creditors both local and foreign.

    According to the chairperson of Zimbabwe Fertiliser Manufacturer’s Association, Tapuwa Mashingaidze, the country now requires about 600 000mt including the volumes for the government’s presidential input and cotton schemes, as well as for the command agriculture programme which were a major part of the market in the last few seasons.

    Direct forex allocations virtually seized and most companies were relying on letters of credit by year end, but these were proving difficult to establish as many foreign banks were no longer trusting or accepting guarantees from the country.

    According to Mashingaidze, there are now 12 companies with factories involved in fertilizer manufacturing with most of the newer ones being involved in making blended NPK compounds. Out of these, three companies are involved in the primary manufacture of fertilizer raw materials: These are Dorowa Minerals which mines phosphate rock in Buhera, which is in turn converted to fertilizer grade Phosphates by ZimPhos in Harare. Then Sable Chemicals in Kwekwe manufactures AN from imported ammonia following closure of its electrolysis-based ammonia plants two years ago.

    At the secondary level, two companies have granulation capacity that is ZFC and Windmill. ZFC and Windmill also operate blending plants. FSG, Omnia, ETG and several other companies operate blending plants whereby granulated materials are physically mixed to make various grades of NPK compounds. The degree of value addition is obviously higher for primary producers.

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