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RBZ bailout breathes new life to fertilizer company

13/01/2018 00:00:00
by William Milasi
 
 
RELATED STORIES

SABLE Chemical Industries (Sable) has commended the financial intervention with the foreign currency by the Reserve Bank of Zimbabwe (RBZ) late last year saying it has helped the company ramp up production.

The Central Bank last year bailed out a number of fertilizer and chemicals producing companies with a facility in the region of $20 million.

In a recent interview, Sable Chemicals Chief Executive Officer (CEO) Bothwell Nyajeka said the Kwekwe-based company had been struggling to operate at capacity due to foreign currency shortages.

“In 2017, we did not produce enough for the country,” he said.

“This was mainly caused by the fact that we were operating in a subdued environment. We were experiencing shortages in foreign currency.”

Nyajeka added that production only picked up in the last quarter of the year after they started to receive foreign currency. He expressed optimism that, with the availability of foreign currency, the company could produce enough to supply the whole country.

“We are optimistic that production will pick this year provided that we continue to receive nostro dollars. We just want the Central Bank to continue availing us with enough foreign currency,” he said.

The company is targeting to produce 240,000 tonnes of fertilizer annually by 2019.

“This year we are looking forward to producing 90,000 tonnes of AN,” said the CEO, adding that “our long-term plan is to produce 240,000 tonnes per year by next year.”

Back in 2015, the Kwekwe-based company launched a new business model for production of ammonium nitrate that is based on the importation of ammonia, a key raw material in the manufacture of ammonium nitrate fertilizer.

This was after the discontinuance of ammonia manufacturing facilities at the plant after it shut down its high cost electrolysis plant used for the production of hydrogen.

Sable faced serious challenges relating to the cost of running the electrolysis plant, for the production of hydrogen used to manufacture some of the ammonia, as it requires a lot of power.



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