Published by the government of Zimbabwe
27 August 2008
Harare — THE major refurbishment of the electrolysis plant at the country's sole Ammonium Nitrate manufacturer, Sable Chemicals has been stalled by the company's inability to operate profitably.
TA Holdings chairman, Mr Shingai Mutasa said the company was failing to operate profitably owing to a variety of limitations, particularly that of controlled pricing.
"Government believes that we are being irresponsible but we are responsible and we took a deliberate position not to declare dividends for three to five years so that we can re-invest the money in the business until such a time that it starts making money," he said.
Government is a key shareholder in Sable Chemicals. It is currently providing at least US$10 million monthly for fertilizer production.
Sable has been recording successive losses primarily due to pricing distortions. There is a thriving black market for fertilizer from mongers who access the product cheaply from Sable and then resell at exorbitant prices on the parallel market.
Mr Mutasa said it was also difficult to invest new money into the business in the absence of company performance that guarantees a fair return on investment.
Mr Mutasa said Government has not taken heed of the fact that the cornerstone of the agricultural sector is a strong fertilizer industry.
The plant, which is key to fertilizer production has been facing serious operational difficulties since last year.
Its scheduled refurbishment involves the replacement of the plant's 14 electrolytor units, which are used to produce gaseous hydrogen and oxygen.
Sable has been producing only 4 000 tonnes of fertilizer per month, as opposed to its capacity of 20 000 due to a number of factors that include electricity and foreign currency shortages.
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