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Kwekwe-based fertilizer company Sable Chemicals, which is seeking $5 million in the short-term, says prospects are bright that it will soon get funding to refurbish its plant.
Sable Chemicals, through its parent company Chemplex Corporation, earlier this year went on the market to raise at least $5 million to be used as working capital and to refurbish its plant which was commissioned in 1972 and has become expensive to run.
Sable Chemicals chief executive Mr Jack Murehwa said raising finances was work in progress and was confident that the company would have raised it in the first quarter of next year.
“Raising of finance is in progress and the prospects are good and hopefully by the first quarter of next year we would have raised the required amount,” he said.
The company which is the sole producer of ammonium nitrate (AN) is facing a myriad of challenges among them high power tariffs and an obsolete plant which has become expensive to run due to low productivity and high operational costs.
This has seen production plummet in recent years from a peak of 240 000 tonnes of fertilizer per year to the current 70 000 tonnes which translates to capacity utilisation of just under 40 percent.
Sable consumes at least 70 megawatts of electricity every month which gobbles about $2 million but despite the company being on a Government subsidy, it has found it difficult to break even.
The company was recently disconnected by power utility, Zesa over unpaid bills and was only reconnected after the intervention of the Government over electricity bills believed to be in the region of $35 million and is threatening the 2012/13 farming season.
However, Mr Murehwa said the deficit for the commodity would “not be excessive” in the current farming season.
“Sable operates on a supported tariff with the Government carrying a portion of the bill. Reconciliation of the figures is always a matter on the table for discussion by the three parties — Government, Zesa and Sable. It is not proper to discuss these figures in the press as chances are the figures will be quoted wrongly or out of context,
“For any agricultural season, there is both the theoretical demand for Ammonium Nitrate based total AN required for all the land under cultivation and the actual demand for AN based on what the market can afford to pay for.
“These figures are significantly different and of major importance is what the market can absorb.
“When you look at it that way, you will find that the apparent deficit is not excessive and there are significant stocks of AN with fertilizer distributors.”
Recently Government announced that it will avail $60 million for the purchase of 300 000 tonnes of both compounds and AN for the current farming season.
Online Reporter