Sable grapple with liquidity and power shortages

Published: 05 December 2013

THE tedious process of importing and transporting inputs needed for the production of Ammonium Nitrate fertiliser is contributing to its looming shortage as the sole fertiliser producing company continues to grapple with liquidity and power shortages.

The country is facing acute shortages of Ammonium Nitrate as the country’s biggest fertiliser producer, Sable Chemicals, was operating at 25 percent capacity due to financial and other challenges.

Zimbabwe needs a total 150 000 tonnes of AN and a similar tonnage of Compound D fertiliser for the current farming season.

In an interview with the Herald Business, Chemplex Corporation chief executive Mr Misheck Kachere said the unreliability of the railway system, which is mainly used to transport inputs, meant that the company had to rely on road transport which was more expensive.

"We import inputs that are used in the production of fertiliser through the Beira and Durban ports but we have been facing logistical challenges because it takes between four to six weeks for the inputs to get here instead of 10-14 days.

"We now have to rely on road transport which is proving to be more expensive," he said.

He said the situation was being exacerbated by the liquidity challenges the company was facing.

Mr Kachere said the banks were not offering cheap loans which local companies could utilise to increase their production.

"As it stands, we have arrangements with some international suppliers but the inputs are stuck at the ports because the company has no money to bring them to Zimbabwe," he said.

He, however, said although there were problems with the production of AN fertiliser, there were enough stocks of Compound D fertiliser.

He said Dorowa Mine, the country’s sole phosphate producer, was running smoothly and producing enough to meet demand.

"At maximum, we produce 10 000 tonnes of phosphate per month but because demand has been low, we are producing 8 000 tonnes which is more than the 5 000 tonnes needed by the market," he said.

He said Dorowa Mine was also facing power shortages although this had not affected production.

"When the rainy season starts, we experience problems with the power line from Rusape which is usually down but this has not had any effect on our production targets," he said.

Chemplex has in the past blamed the challenges they are facing on unpaid debts.

The company is owed more than $20 million.

The financial problems have not only affected Dorowa Mine and Zimphos, but has spread to other companies under Chemplex Corporation such as Sable Chemicals and Zimbabwe Fertiliser Company.
- herald