‘Domestic fertiliser production crucial to avoid external shocks’

Zimbabwe must urgently boost domestic fertiliser production and strengthen linkages across the fertiliser value chain to reduce imports, meet national demand and protect the country from supply disruptions that may be caused by external shocks.

Parliament Portfolio Committee on Industry and Commerce, Mr Clemence Chiduwa, speaking after touring operations at Windmill Private Limited in Harare, said the country requires about 780,000 tonnes of basal and top-dressing fertilisers annually but continues to rely heavily on imports despite having local manufacturing capacity.

He said the committee’s visit was guided by the country’s industrialisation strategy under the Zimbabwe National Industrial Development Policy, which prioritises strengthening domestic production and value chains, including fertiliser manufacturing.

“What is guiding us is the Zimbabwe National Industrial Development Plan, which focuses on the fertiliser value chain. For us as a country, in terms of our national requirements, we are looking at a combined basal and top fertiliser requirement of about 780,000 tonnes.

“However, Zimbabwe remains a net importer of fertilisers, making it necessary for policymakers and industry to find ways of boosting local production,” he said.

Mr Chiduwa said during the tour, the committee was informed that capacity utilisation at Windmill is at present around 10 percent, a level he said was far below expectations for both the industry and the country.

He noted that the company is under business rescue, while management indicated that it expects to exit the process in about two months, a development that could help restore production levels.

“There is still a lot to be done. They are still under business rescue and they are looking at getting out of the rescue plan, maybe in two months. There is a need for a whole mindset change to ensure that they go back to production,” Mr Chiduwa said.

He said a major challenge affecting the company and the fertiliser sector more broadly is the heavy reliance on imported raw materials that could potentially be sourced locally.

According to Mr Chiduwa, key inputs such as phosphate and nitrogen, which should ideally be supplied by domestic producers, are being imported.

“The main challenges are also coming from other inputs that are supposed to feed into them. Phosphate, which is supposed to come from Zimphos, is being imported, while nitrogen, which is supposed to come from Sable Chemicals, is also being imported.

“Literally, all their inputs are being imported, and we would want to localise that, maybe except for a few that we cannot get locally,” he said.

Mr Chiduwa also highlighted that the geopolitical tensions in the Middle East could have a negative effect on the country’s fertiliser supply chain.

He said that because of the disruption of the fertiliser supply chain, the country must localise the value chains.

Mr Chiduwa said restoring the fertiliser value chain requires co-ordinated action across several domestic producers, to ensure a reliable supply of key raw materials.

“We are looking at Windmill coming back to full production and this also entails looking at the whole value chain, like what is happening at Sable and what is happening at Zimphos,” he said.

He added that sulphuric acid supplies could also be supported by platinum miner Zimplats, which produces the chemical as a by-product.

However, management told the committee that the improving macroeconomic environment was enabling them to plan operations over a longer horizon.

“The other issue they are looking at is working capital. They are saying they have challenges with working capital, but obviously, they are happy with the macroeconomic stability that we have. They can plan for five to six months according to their submissions,” said Mr Chiduwa.

Meanwhile, Windmill chief executive Mr Kudakwashe Mundowozi appealed for stronger policy support for local manufacturers to help them compete against imported fertilisers.

In a presentation to the committee, he said authorities should promote policies that prioritise locally produced fertilisers.

“What we expect is more support in terms of Buy Zimbabwe, looking at local manufacturers and how they should be supported,” he said.

He noted that the local fertiliser industry continues to face intense competition from imports, which has eroded market share for domestic producers.

“Point in case, we have a lot of imported competition coming in; hence, we hope that policymakers will make it mandatory for certain quarters to be sourced from local manufacturers because this will boost our market share,” he said.

Mr Mundowozi said Windmill’s production facilities have significant capacity that could help reduce imports if fully utilised.

He noted that the company’s Harare plant has the capacity to produce up to 1,800 tonnes of fertiliser per day, while another facility in Mount Hampden can produce about 1,000 tonnes per day.

“Combined, we can do about 300,000 tonnes a year, and this is three-quarters of what Zimbabwe needs in terms of basal fertilisers, and we have the capacity to produce and deliver this every year,” said Mr Mundowozi.

He also acknowledged that the market must be shared with other local producers, but stressed that domestic demand should primarily benefit local manufacturers.

Mr Mundowozi also noted that global developments, particularly in the Middle East, have affected fertiliser input prices due to shortages of raw materials.

“The impact from the Middle East was more of a pricing issue. The price will go up because the raw materials are now in short supply,” he said.

“For the first time, we have seen traders coming back and asking us to sell back to them. It shows how dire the situation is.”

He said the situation highlights the importance of building strong domestic supply chains for key fertiliser inputs.

“If this remains unresolved, we need to have local suppliers give us the raw materials so that we can stabilise production,” he said.