United Refineries starts benefiting from out-grower scheme

Oliver Kazunga

Bulawayo based agro-industrial manufacturing concern, United Refineries Limited (URL), is benefiting from the resilience that comes with sourcing raw materials locally following the successful implementation of its soya bean out-grower alliance initiative.

On the back of the Russia – Ukraine war, prices of raw many materials that are usually imported from the two waring parties are bound to go up as the supply side becomes short while the demand side remains constant.

Soyabean is one of the major raw materials that URL requires and relies on imports from Ukraine among other countries on the globe to feed into its production processes for products such as cooking oil and soap.

URL chief executive officer, Busisa Moyo, on Tuesday said not only has his organisation managed to hedge against the adverse effects of the Russia-Ukraine war, but the initiative is contributing to ease pressure on the Reserve Bank of Zimbabwe forex auction market.
This is on account that the amount of foreign currency URL needs on the forex market to import soya bean is reduced.

“The war in Ukraine is obviously impacting on prices because prices are going up, Ukraine is a major supplier so that supply is no longer available. When supply becomes short and demand remains the same, prices go up so the price pressure is very strong.

“There are other disruptions like Covid-19, drought, and climate disruptions so it’s very important as a country that we are resilient and we build ourselves for resilience,” he said in an interview after a field day hosted by Luxon Zembe, one of the farmers contracted by URL under SOBOA in Mazoe District, Mashonaland West province on Tuesday.

Moyo said while at present the SOBOA initiative does not cover URL minimum requirement of 50 000 tonnes annually, the programme is a significant step in covering the firm’s agronomic and raw materials needs.

In the 2021-2022 cropping season, a total of 2 400ha were planted under soyabean involving farmers mainly from Mashonaland Central, Mashonaland West, Masvingo, Midlands as well as some parts of Matabeleland.

“It’s very significant that whilst it (SOBOA) for now doesn’t cover the minimum 50 000 tonnes that we require as a company, I think getting 7 000 to 10 000 tonnes is a significant step in covering our agronomic needs and raw material needs.

“We are looking forward to expanding the programme. However, in order to expand we need support from financial institutions, because in our alliance we have companies like Minerva who have a system of monitoring farmers using modern technology like GPS (General Packet Service) and other technologies to assess farmer progress,” he said.

“We look forward to that every tonne we grow reduces imports, so it’s very significant and more importantly, we are able to promote price stability while also lessening pressure on the forex market.”

Zimbabwe requires 300 000 tonnes of soyabean annually with oil expressers alone requiring 150 000 tonnes.