In the midst of the furore surrounding the impending arrival of the bond notes which have also been titled the “surrogate currency,” Zimbabwe’s largest fertiliser and chemical manufacturing company, Chemplex Corporation looks at investing a mouth watering US$27.5 million in its subsidiaries and associate companies ahead of the 2016/2017 summer cropping season. Two of its wholly owned subsidiaries Dorowa Minerals and ZimPhos which were previously under sanctions imposed by the United States Congress via the Zimbabwe Democracy and Economic Recovery Act (ZDERA) (S. 494), recorded a tremendous jump in capacity utilisation from a measly 10% to 90% this year.
At Dorowa US$5 million was spent refurbishing plants in preparation for the upcoming season. Chemplex is at an advanced stage of rolling out US7.5 million to ZimPhos to increase fertiliser manufacturing at the company, the last batch of US$15 million will be pumped into Zimbabwe Fertiliser Company (ZFC) to modernise their plants so that they can bolster supplies of required fertiliser in the country. Chemplex owns 50% of ZFC and envisions monthly production going up to 10,000 tonnes after their investment.
The company will be prioritising farmers under governments Targeted Command Agriculture Programme. This programme is expected to focus on at least 2 000 farmers near water bodies who are expected to benefit from this new agricultural scheme aimed at ensuring food self-sufficiency. These farmers are expected to have a minimum of 200 hectares under maize per person and produce a bare minimum of 1000 tonnes of maize. Each farmer is required to commit five tonnes per hectare towards repayment of advanced loans in the form of irrigation equipment, inputs and chemicals, mechanised equipment, electricity and water charges.
Chemplex manufactures sulphuric acid which is critical in the manufacture of industrial chemicals. It also mines and beneficiates phosphate rock which is used in the manufacture of fertilisers. The increased capacity utilisation has had a positive effect on the pricing, ammonium nitrate has dropped to US$550 from US$650 per tonne whilst compound D has declined from US$600 per tonne to US$500. Chemplex controls controls a humongous 70% of the market share. The company owns 36% of Sable Chemicals and also wholly owns Chemplex Marketing, Chemplex Animal & Public Health, G&W Industrial Minerals and GD Haulage.