EY appointed Chemplex financial advisor 

Tinashe Makichi

Industrial Development Corporation (IDC) has appointed Ernst and Young as financial advisors as the State institution seeks to find a technical partner to revive its wholly-owned fertiliser manufacturer, Chemplex Corporation.

Chemplex is the largest fertiliser and chemical manufacturing company in Zimbabwe controlling about 70 percent of the fertiliser industry and the whole phosphate chain.

Chemplex companies under its portfolio include Zimbabwe Phosphates, ZFC and Dorowa Minerals. The company mines and beneficiates phosphate rock used in the manufacture of fertiliser and also manufactures sulphuric acid which is then converted to other industrial chemicals.

The fertiliser group has been facing viability challenges and currently requires around $72 million over the next five years to ramp up fertiliser production to enable it to meet the country’s demand.

IDC Zimbabwe which controls 100 percent of Chemplex Corporation is looking at diluting its shareholding to around 26 percent.

“IDC has appointed Ernst and Young as financial advisors and there has been massive movement with regards to the securing of a technical partner for the company, which has been facing a lot of funding and working capital challenges.

“The financial advisor will soon be publishing expressions of interest for investors to come in and submit their bids. There has been massive interest from investors since the change in political leadership and this interest has also been directed to Chemplex,” said a well-placed source at Chemplex.

One of South Africa’s fertiliser manufacturers, Foskor has since indicated interest in taking up a significant shareholding in Chemplex Corporation.

Foskor is a producer of phosphates and phosphoric acid with international exposure. Foskor unlocks shareholder value through sustainable beneficiation of phosphate rock into either phosphoric acid or phosphate-based granular fertilisers sold globally.

The South African company is the only vertically integrated phosphate producer in South Africa. From phosphate-bearing ores, the operations in the mining division process phosphate rock concentrate, which is crucial for stimulating and raising crop yields.

There are indications that South Africa’s Industrial Development Corporation will likely fund Foskor proposed venture.

IDC SA has already pledged significant equity and debt investments in Zimbabwe and will kick-start the process with a $50 million loan to its Zimbabwean namesake for rehabilitation of the fertiliser value chain.

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