Sable Chemicals starts drawdown of Afreximbank US$11m facility

THE country’s sole ammonium fertiliser manufacturer, Sable Chemicals, says it has started drawdown of the US$11 million facility it secured from the Afreximbank and has commenced the phased retooling exercise.

In 2019, Sable planned a two-year US$25 million investment in order to ramp up production to 90 000 tonnes and increase wagon fleet.

Mr Bothwela Nyajeka, the company’s chief executive, told The Herald Finance and Business that phase 1 is already underway and is expected to complete by year 2022.

“We started the drawdown of the US$11 million facility in July and work is undergoing. So we are going to be very busy in 2022, rehabilitating our plants and increasing the number of wagons,” he said.

According to Mr Nyajeka, phase one involves plant refurbishment and acquisition of an additional fleet of 30 wagons.
“Phase 2 involves buying more wagons and further refurbishments to ensure we meet our full plant capacity of 90 000 tonnes per annum,” he said.

Mr Nyajeka said currently, the Kwekwe based company has a fleet of 107 wagons which will grow to 167 by end of the phased investment.

He said the company as a manufacturer has been getting its foreign currency from the Reserve Bank of Zimbabwe (RBZ) foreign currency auction and letters of credit.

According to Mr Nyajeka, the company imports ammonium gas which it uses in the production value chain of ammonium fertiliser. One tonne of ammonium gas makes two tonnes of ammonium nitrate fertiliser.

Mr Nyajeka said the cost of importing ammonium gas averages US$2 million to US$3 million per month.
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He said the Covid-19 pandemic disrupted normal costing of products as shipping, docking, and storage facilities costs increased.

Mr Nyajeka noted the company currently has capacity to meet demand for ammonium nitrate fertiliser for the upcoming season.

“The uniqueness of Sable is that we are the sole manufacturer of ammonium nitrate, therefore we are ready from January to December.

“Our model does not allow us to stock, we manufacture for customers, but for Government schemes, we produce and distribute to various Grain Marketing Board (GMB) depots countrywide,” Mr Nyajeka, said.

He said through the investments, production will move the current 90 000mt per annum, which is 7 500mt per month up to 240 000mt per annum which is 20 000mt per month.

Mr Nyajeka also said the company has contractual obligations with CBZ Agro Yield for the production of Ammonium Nitrate fertiliser.-The Herald