THE Industrial Development Corporation (IDC) – which is hunting for investors to revive its chemical and fertiliser manufacturing unit Chemplex Corporation – is set to establish the quantum of investment required when the business evaluation plan is completed by the end of this month.
IDC owns 100 percent stake in Chemplex, which Cabinet declared a strategic company on November 14 last year because of food security and in terms of the country’s five-year economic blueprint, ZimAsset. Government has reportedly ordered IDC to look for an industry player to acquire up to 49 percent shareholding in Chemplex.
There have been reports that IDC was looking for an investor who would pump in US$60 million into the fertiliser and chemicals manufacturing unit. The new investor would have to get into the whole value chain of fertilisers and is expected to bring in new technology, new products, and new access to markets. IDC spokesperson Mr Derrick Sibanda told The Sunday Mail Business during the recently concluded Zimbabwe International Trade Fair that the evaluation of the business is expected to give them a guideline of how much is required in the business.
“We are looking for an industry player to dilute us to not more than 51 percent. We will have to retain 51 percent because of the phosphate value chain.
“That business evaluation is probably the basis to give us the numbers to say in terms of equity, and what is really needed into the business for recapitalisation,” said Mr Sibanda.
After the completion of the business evaluation exercise, IDC would open for potential partners to apply. The bids would be evaluated by the company together with the State Enterprises Restructuring Agency (Sera). Sera, which was established as the Privatisation Agency of Zimbabwe (PAZ) in 1999 before transforming to Sera in 2004, is a Government agent that manages and coordinates the State Enterprises and Parastatals reform programme in the country.
Another fertiliser manufacturer, Windmill Private Limited, through its investment company was thought to be interested in acquiring a stake in Chemplex. Chemplex, which also has a 50 percent stake in the Zimbabwe Fertiliser Company (ZFC), is the largest fertiliser and chemical manufacturing company in Zimbabwe.
It is supplies the whole agriculture processes with basal and compound fertilisers, among others. Chemplex has been battling viability challenges since dollarisation in 2009 due to lack of working capital and obsolete plant equipment across its investment portfolio. The company also mines and beneficiates phosphate rock which is used in the manufacture of fertilisers and also produces sulphuric acid which is then converted to other industrial chemicals. It has six companies including Zimphos, Dorowa Minerals, Chemplex Marketing, Chemplex Animal and Public Health, GD Haulage and G & W Industrial Minerals.