ZIMBABWE’S sole ammonium nitrate (AN) fertiliser manufacturer, Sable Chemicals (Sable), says it missed its first half production target by 52 percent after producing 34 000 tonnes against an expected 65 000 tonnes due to foreign currency rationing.
Allen Manhanga, the fertiliser firm’s production executive, said against a $90 million foreign currency requirement, the central bank had only availed $3 million to the company so far, a situation which had affected production.
“In the first half, we produced 34 000 tonnes versus 65 000 tonnes. This was 52 percent off target. In 2017, we got $2 million versus a requirement of $230 million,” he said at the recently-ended Confederation of Zimbabwe Industries annual congress.
Manhanga also warned of impending fertiliser shortages pointing out that since Sable production was low, the country was likely to be plunged into fertiliser shortages for the 2018/19 agricultural season.
“Predictably, because of the lack of foreign currency and the fact that we import between 3 000 to 4 000 tonnes of ammonia per month from South Africa, so we are looking at a possible shortage situation,” he said.
This comes as the fertiliser maker recently pleaded with the Reserve Bank of Zimbabwe for a higher foreign currency allocation to boost production and meet growing demand by farmers ahead of the 2018/19 summer cropping season.
According to Bothwell Nyajeka, the firm’s chief executive, 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.
“Given that we are only left with four months to the end of the year and due to forex shortages we experienced during the first eight months of this year, Sable will be able to meet 38 percent of the AN required by the country,” Nyajeka said last month.
He said if timely intervention was made, the company would be able to meet 60 percent of the AN demand in the local market.
“If Sable had received all foreign currency it requires we would have been able to supply the market with 60 percent of the AN demanded and the country would have to import 40 percent of the total AN demand,” he said.
In view of the foreign currency shortages, he said the remaining 62 percent of the fertiliser demand would have to be imported to meet the overwhelming demand.
“Sable will invest $25 million within the next 18 months to increase production capacity at the plant to at least 200 000 tonnes by 2020. The money will be used to acquire additional rail tank cars as well as refurbishing and retooling the current plant,” he said. [email protected]