One of the larger victims of the downgrading of Zimbabwe’s heavy industrial base during the eras of hyperinflation, conversion to a US dollar economy and severe electricity shortages was the chemical and fertiliser industry.

That saw the country move from near self-sufficiency in many areas to becoming import-dependent while at the same time demand was increasing as the Second Republic started sorting out small-holder agriculture and turning this sector into a profit-making core of economic growth.

As Minister of Industry and Commerce Dr Sekai Nzenza told an Agribusiness Forum last week, the Government is very keen on seeing the local fertiliser industry being restored and expanded for a swathe of reasons: making sure that Zimbabwean farmers have enough fertiliser on tap and on time, having the core of a modern chemical industry in place, cutting back on imports, and creating a lot of valuable mining and industrial jobs.

A five-year roadmap was worked out to allow the fertiliser and chemical sector to put in the required reinvestment and new investment. 

Some of the measures were fairly obvious, just having Government entities backing the input schemes paying for fertiliser orders on time is one major help. 

The general economic stability created in the first 24 months of the Second Republic was another, and the foreign exchange auctions have been an obvious boon, with the main chemical and fertiliser companies among the big buyers on the auctions. Even the switch to major contract farming has been useful, creating a guaranteed market.

Contract farming means that farmers do not have to find their own money to buy inputs; they get these from the contractors, which for much of the agricultural sector outside tobacco means the Grain Marketing Board or other State or semi-State entities.

This means that a fertiliser company, and the related chemical companies that supply raw materials, know years in advance how much they can sell and know they do have to worry about farmer cashflows.

The companies are responding with new investment, some of it very large investment as they work out how to boost production to fill present capacity and then boost their capacity.

When it comes to the basic raw materials Zimbabwe has some. In south Buhera at Dorowa there is a phosphate deposit that has been mined for decades and which has adequate reserves to increase output. 

Production fell sharply when electricity load shedding was the norm, but is now rising again. The moderately concentrated phosphate output is sent to Zimphos in Msasa for processing into phosphate fertiliser, a process that requires a surprising amount of sulphuric acid which Zimphos also makes, using the sulphite resources from its Iron Duke Mine. 

A major upgrade and expansion of that plant is almost complete.

One useful by-product of all these processes is aluminium sulphate, a primary chemical used in water purification; it is the one that coagulates the tiny particles in dirty raw water so they can be removed. 

It would no doubt be a major help if city councils, and especially Harare City Council, could pay bills on time and fix its water purification plants so that the potential demand could be realised in increased sales. Volumes cut costs.

There have been environmental concerns in the past, at both Dorowa and Zimphos, over pollution, contamination of water resources in the Save catchment and air pollution in Msasa, although to give Zimphos its due it did build the factory in the middle of open countryside long before the tens of thousands of houses started lapping around its plants.

But in recent years both have been sorting out these emissions and even working out how to make some money by trapping wastes.

Nitrogen fertilisers used to be made with total local raw materials, air and water. Sable, down in Kwekwe, won a special deal in the 1960s for very cheap electricity from Kariba South. 

At that time electricity demand was for most of the day and night well below the capacity of the power station, and rather than have generators lying idle and opening floodgates to release the unused water, a special price was negotiated. 

This allowed Sable to obtain the nitrogen it needed for ammonia by liquefying air, and the hydrogen through electrolysis of water. The “waste” product of both processes, oxygen, was sent by pipeline down the road to Zisco and generated some very useful loose change. 

The two gases were then used in an established, if little used, technology to make the ammonium nitrate. The end of cheap surplus hydro-power ended that production. Sable had to switch to importing ammonia concentrates, made from natural gas, and production halved. 

This is one reason why Sable was so excited by the potential natural gas find in Muzarabani and made it clear that if there was gas there, it wanted a pipeline to Kwekwe and would buy a decent supply. 

It even signed the initial declaration of intent. Such a gas find would restore Zimbabwe’s self-sufficiency in nitrogenous fertilisers and probably open the door to value-added exports.

The potassium component needs to be imported, and probably always will, although there are opportunities for prospectors to find suitable deposits, and in any case a second ancient volcanic pipe with phosphate deposits will one day be needed to supplement the one at Dorowa. So other opportunities open in the mining sector.

Zimbabwe’s chemical industry was built on fertiliser manufacture, and despite the many problems faced, enough potential capacity exists for a significant expansion with investments already being made and in the pipeline. 

Government has created the investor-friendly climate and is improving that daily. Economic stability means the companies involved, and most are grouped under Chemplex Corporation, can make longer-term plans, especially with the guaranteed orders and payments. 

The dumping of price controls and subsidies allows everyone to work out costs and margins, and while there could be a near monopoly in raw material supplies there is now adequate regulatory systems in place to make sure that fair profits are accommodated, but profiteering is stopped. 

Already the Government has placed imported fertilisers on the list that needs special import licences, so it can prevent dumping, but it can also open the tap if local firms play with pricing.

But so long as Zimbabwean companies can make enough fertiliser at below the imported costs of bags filled somewhere else, even if some very basic raw materials have to be imported, market forces will automatically shut out imports.

Farmers dislike paying more than they have to for their inputs. We can enter the modern world and use our own resources profitably in a competitive environment. 

And the new investment in fertiliser materials means that the basis for a lot of other chemical industries are created. 

Even some of the waste products and potential pollutants can be made into something saleable and useful, especially if volumes are high enough. Minister Nzenza’s sober, but upbeat outline last week shows that the Government realises the potential and its willingness to support the efforts of the investors.