Russian fertiliser tycoon eyes Zimbabwe, Zambia for growth

PUBLISHED: Fri, 09 Feb 2018 16:27:37 GMT

MOSCOW/HARARE/LUSAKA, Feb 8 (Reuters) – Russian fertiliser producers Uralchem and Uralkali plan to boost sales in southeast Africa, their co-owner Dmitry Mazepin said on Thursday, after meeting the leaders of Zimbabwe and Zambia.

Rising commodity prices and dramatic political change in the region have vastly improved the investment mood in the mining sector this year, a meeting of industry leaders in Cape Town showed this week.

Uralchem and Uralkali plan to create a hub in the two countries that will directly supply mineral fertilisers, the firms said in a statement after co-owner Mazepin met Zimbabwe’s President Emmerson Mnangagwa and Zambia’s President Edgar Lungu.

They expect demand for the product to grow rapidly in the next few years.

Fertiliser demand is on the up in Zambia as it tries to diversify its economy away from copper mining to agriculture, but the nation still imports most of its fertiliser from South Africa.

Zimbabwe struggled to feed its population between 2001 and 2016, a situation often blamed on the government and its seizure of businesses owned by white farmers.

This move depressed commercial agricultural output, while a lack of funding for farmers to purchase adequate fertiliser, coupled with drought, also hit production of the staple maize crop.

The country is short on foreign currency needed to import fertilisers such as ammonia, while its own domestic production remains low.

Cooperation with the two Russian companies will allow Zambia and Zimbabwe to reduce prices for their farmers, who are currently forced to buy fertilisers from intermediaries at a cost of $450 to $500 per tonne, Mazepin said.

Russia is able to offer mineral fertilisers in the global market, including at African ports, at $250 to $300 per tonne, Mazepin added. He is the owner of privately held Uralchem, which holds a stake in Uralkali.

According to him, in the short term, Uralchem and Uralkali may boost supplies of their fertiliser products in southeast Africa by 400,000 to 500,000 tonnes a year from the current 100,000 tonnes.

Mazepin also said Zimbabwe’s president had invited the Russian companies to supply fertiliser and participate in mining projects.

“Certainly, we are interested. When we get guarantees of stable business development at such high level, it is very important to us,” he said. (Reporting by Polina Devitt, MacDonald Dzirutwe and Chris Mfula; Editing by Dale Hudson and Polina Ivanova)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.