East Bridge speaks, has already made payments to manufacturers
East Bridge Estates, SRL, a Romanian company that government contracted to supply fertiliser to Malawi has acknowledged that it initiated the deal and has already made payments to manufacturers for the inputs.
The company admits that it does not manufacture fertiliser, but has production lines with manufacturers in Europe, Euro-Asia and the Middle East. And has further dismissed fears of fraud, saying, it was the one taking the risk because there will be no upfront payment from Malawi for the commodity.
In response to a questionnaire, the company’s directors, George Mantea, Catalin Sandu and Teddy Moya, said they had seen an opportunity for both parties to help Malawian farmers with reasonably priced fertilisers at favourable payment arrangements.
They wrote: “Manufacturers are usually paid in advance the whole value of an order or a deposit to secure a production line. In regard to the Malawi supply, we have had to pre-pay for the securing of the production line and eventual supply, thus our proposition; above that the risk is mainly with us.”
On the logistics component to Malawi, the company argues that with the transaction premised on commodity exchange (ComEx), the company needed to incorporate a local company styled East Bridge Commodities and Logistics Limited, whose majority shareholder is East Bridge Estates, SRL to handle the same.
Writes the company: “Having appreciated the foreign currency challenges facing Malawi, East Bridge Estates, SRL came up with a hybrid arrangement that would be mutually beneficial by offering the Malawi Government fertilisers in a futures contract and we get paid later after the supply.
“In furtherance of this initiative, East Bridge Estates, SRL submitted an expression of interest to the Malawi Government through the Cabinet Committee on AIP. Our company was invited to make a presentation to the Malawi Government on this proposal in October, 2022.”
In an interview with our sister newspaper Nation on Sunday, Agriculture Minister Sam Kawale said an assessment showed that the arrangement was feasible.
The minister was, however, quick to state that the targeted fertiliser is not for the 2023/24 growing season.
“The funds for 2023/24 AIP are intact. We will be awarding contracts to about 15 companies very soon using the budgeted funds. The East Bridge fertiliser is not for this year’s AIP,” he said.
On his part, Minister of Trade and Industry Simplex Chithyola Banda said his portfolio looked at the deal as beneficial as it would boost agricultural productivity.
“If there is a good deal that has been initiated by the Ministry of Agriculture which will improve and increase agriculture production, it means, we will have more to generate enough revenue that can help run this country,” he said in a telephone interview on Saturday.
Some academics, including Malawi University of Business and Applied Sciences economics lecturer Betchani Tchereni said, if cautiously managed, the barter arrangement could help stabilise the economy.
Government, through the Ministry of Agriculture, has offered East Bridge Estate a deal to supply 600 000 metric tonnes (MT) of fertiliser worth $124.5 million (about K128 billion).
The Romanian company is expected to supply 300 000 MT of Urea and 300 000 MT of NPK under a commodity exchange/ barter agreement in a contract to run until July 24 2024.
