Source: FSG speaks on fertiliser deals | The Herald 29 AUG, 2019

Fertiliser Seed Grain (FSG) employees working on a fertiliser packaging line at the firms’ factory in Bindura recently

Business Reporter
Farming inputs manufacturer, Fertiliser Seed Grain (FSG), this week said it has fulfilled its contractual obligations with the Government, dismissing recent claims that it was paid US$400 million without any justification.

FSG, which also has operations in Mozambique, Malawi and Zambia, is contracted by the Government to supply fertiliser to about two million vulnerable households under State sponsored schemes, including the Presidential Cotton Inputs Scheme – meant to assist marginalised people.

The company, whose integrated factory is situated in Bindura, is the largest fertiliser manufacturer in Zimbabwe, enjoying about half of the total market share through its Supper Fert band.

On Monday, Public Accounts Parliamentary Portfolio Committee chairman Mr Tendai Biti (MDC-A) alleged US$400 million was paid to a bogus company for fertiliser supplies.

Managing director Mr Steve Morland, said FSG was operating within the confines of Zimbabwean laws, while all its transactions with the Government were above board.

“We were surprised to hear and see a clip circulating that we do not exist.

“To put the record straight, we produce 50 percent of national fertiliser requirements.

“Our biggest customer or taker is Government, that is, we have been supplying the bulk of the presidential free inputs, since 2015,” said Mr Morland.

He said the allegations that the company was paid US$400 million were not true as the firm sources its own currency to import raw materials.

“It is very possible that we received a total of $400 million RTGS payments over the past few years we have been doing these programmes . . . but it is important to understand that this was RTGS and Treasury Bills.

“We never did receive any US dollars,” he said.

“We made our own arrangement to raise foreign currency through 180 day letters of credit. It is important to note that our arrangement with the Government has helped millions of vulnerable families and we continue to support.”

Under the Presidential Free Cotton Inputs scheme, the Government is supporting thousands vulnerable households and the programme has helped to boost the cotton industry, promising to be one of the country’s major foreign currency earners.

Since the launch of the programmes in 2015, the production has been increasing – from 28 000 tonnes – the lowest in nearly two decades to 143 000 tonnes last year.

To sustain the programme the recovery in cotton production, the Government set aside $213 million towards inputs for a targeted area of about 200 000 hectares this year.

Apart from supporting cotton farmers, the Government is also providing inputs for maize, sorghum and pearl millet.

The scheme will also include sugar and soya beans seed.

Commenting on preparedness for the forthcoming summer season, Mr Morland said FSG was on course to its set target of at least 200 000 tonnes and deliveries has already started.

“We have a lot of raw materials here on the ground . . . about 31 000 tonnes of raw materials and they keep on coming.

“We are hoping that we will be able to contribute at least 200 000 tonnes of fertiliser into the new summer season and we are confident that the level of (our target) contribution will be met,” said Mr Morland.

FSG operates on two shifts and produces about 900 tonnes per day and employs 500 employees. Since it started operations, the company has so far invested US$10 million locally.

The company is looking at expanding its product mix to include specialised products for the horticultural industry.

FSG also supply raw materials to local companies and then buy back finished products, mainly compound D and granular single super phosphate.

Some of the major fertiliser suppliers in Zimbabwe are; Windmill, Sable Chemicals, Zimbabwe Fertiliser Company and Omnia.

Zimbabwe needs at least 500 000 tonnes of both ammonium nitrate and compounds annually.