Sable records US$4,7m loss

Africa Moyo
SABLE Chemicals, the country’s biggest ammonium nitrate manufacturer, reported recently that its losses for the year ended December 31, 2016 widened by 135 percent to US$4,7 million from US$2 million a year earlier due to production disruptions caused by plant reconfiguration.

The Kwekwe-based AN producer is, however, optimistic going forward after the remodelling of the plant made it more energy efficient.

Sable is 50,6 percent owned by investment company Masawara, which also holds 22,5 percent of the Zimbabwe Fertiliser Company.

In a statement accompanying Masawara’s annual results for 2016, the group’s director Mrs Maureen Erasmus said: “Sable commenced production under the full importation model in November 2016. The revenues earned by the business therefore remained subdued resulting in a loss after tax of US$4,7 million (2015: US$2 million).”

Masawara believes that in the short-term, Sable will likely not contribute positively to the group’s results, and will continue to pursue strategic initiatives that will see it contributing positively to profitability in the medium to long-term.

Sable is operating at 30 percent capacity.

The electrolysis plant for ammonia production, a key raw material of AN, was mothballed in October 2015 because of its high energy consumption.

The remodelled plant consumes between 6MW and 10MW, which is paid for at commercial rates as opposed to the discounted USc3 they used to get when using electrolysis.

A US$150 million debt for unpaid power bills has been liquidated.

Sable CEO Mr Bothwell Nyajeka recently told The Sunday Mail Business that the company had crafted several financing and toll manufacturing arrangements.

Management wants to ramp up production to about 200 000 tonnes by 2019 to cut imports of nitrogen fertilisers into Zimbabwe. At full capacity, the plant produces 240 000 tonnes of AN.

Government’s continued push for import substitution through special agricultural production schemes is also expected to lift the company’s performance.

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