Uralchem, Moscow, has signed a Memorandum of Understanding (MoU) with the Republic of Zimbabwe, under which Uralchem, either individually or jointly with Uralkali, intends to invest in one or more Zimbabwean agricultural companies, particularly the largest state-owned company in the sector, fertilizer holding company Chemplex Corp. Ltd.
The agreement was signed on Jan. 15 by Uralchem Chairman and Uralkali Deputy Chairman Dmitry Mazepin and Zimbabwe’s Minister of Foreign Affairs and International Trade Perrance Shiri. Investments will be made by the purchase of shares in the authorized capital of various companies or via investments in their fixed assets, Uralchem said in a statement.
The Russian company in November revealed that it plans to participate in the privatization of Chemplex. Zimbabwe’s Industrial Development Corp. (IDC) is looking to divest part or all of its 100 percent holding in the company, and last September retained Ernst & Young LP to assist it in arranging the sale or in finding a partner for Chemplex (GM Sept. 7, 2018). Initial reports in November said there was interest from 26 local and international companies, including Uralchem (GM Nov. 2, 2018).
Harare-based Chemplex controls Dorowa Minerals, which operates the country’s only phosphate mine, and ZimPhos, the country’s sole producer of sulfuric acid, aluminium sulfate, and superphosphates. Chemplex also holds a 50 percent interest in NPK manufacturer Zimbabwe Fertiliser Co., and a 36 percent interest in Zimbabwe’s sole ammonium nitrate manufacturer, Sable Chemicals Industries Inc. in Kwekwe (GM Feb. 9; June 15, 2018). In addition to fertilizer and chemicals, Chemplex is also reported to have stakes in mining and insurance.
The divestment is part of the country’s plan, announced in April, to either partially privatize or list some 35 state-owned firms on the Zimbabwe Stock Exchange. An earlier attempt to sell off Chemplex in 2015 proved unsuccessful.
This week’s MoU also provides for the supply of nitrogen, potash, and complex fertilizers to the markets of Zimbabwe and other African countries. Uralchem last year revealed its ambitions to establish a Russian hub in Zimbabwe, and perhaps also in Zambia, in possible cooperation with Uralkali, for the direct supply of mineral fertilizers to the two African nations and potentially their neighbors, where demand is expected to grow rapidly in the next several years (GM Feb. 9, 2018).
“The memorandum states that the agriculture development is the key priority for the Zimbabwean economy. The largest national corporations involved in the production of mineral fertilizers and agrochemicals, including the leading state-owned company Chemplex, aim to establish business relationships with Russian partners in order to enhance the economy of Zimbabwe and develop local businesses,” Uralchem said. “In turn, for Uralchem and Uralkali companies, the supply of mineral fertilizers to African countries is among the strategic development areas we are focusing on.”