New fertiliser firm to invest k400m
A new fertiliser company, Urea-Gold Fertiliser Manufacturing, plans to enter the Malawi market with an initial investment of $700 000 (about K392 million), the Malawi Investment and Trade Centre (Mitc) has confirmed.
This will be good news for Malawi’s economy which is agro-based and relies heavily on imported fertiliser because the only company that manufactures the product locally, Optichem (2000) Malawi Limited, does not meet the demand.
According to available figures from the Ministry of Industry and Trade, Malawi requires 300 000 tonnes of fertiliser annually of which 120 000 metric tonnes is locally produced by Optichem while the deficit is imported, draining the country’s much-needed foreign exchange.
Mitc public relations manager Deliby Chimbalu told Business News in an e-mail response on Tuesday that the company, a partnership between a Malawian, David Gondwe, and a South African national, is only waiting for certification.
“The company has since pledged to invest $700 000 [K392 million] for the first phase. The project was already presented to the Ministry of Industry and Trade and was duly approved,” she said.
Chimbalu said this is one of the 41 companies Mitc has issued with investment certificates since January this year.
She said the 41 companies have pledged investment projects worth $368.4 million (K215 billion), representing an increase of eight percent compared to the same period last year in which $304.7 million (K170 billion) worth of investments were recorded.
Meanwhile, Optichem has bemoaned persisting challenges that hinder the company from meeting the fertiliser demand.
“We have to import most of the raw materials for fertiliser manufacturing and this is quite a challenge as we have to use forex and, looking at the situation now, this is not good for business,” said Samuel Snowden, Optichem operations manager.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi on Tuesday acknowledged the challenges players in the field are facing.
“It is not about government failing to woo investors in the sector, but as government, we also depend on the availability of interested investors who also have expertise in the field.
Nkombezi said government is aware that the sector has numerous challenges such as power interruptions, high interests rates, huge capital outlay and high costs of safety standards.
Fertiliser is mainly used in maize and tobacco production. Most of the fertiliser used in Malawi is imported from the Middle East, East Asia, Ukraine and South Africa.
