IDC reviews Chemplex funding strategy

An agricultural worker drives a tractor spreading fertilizers to a field of winter wheat field

THE Industrial Development Corporation (IDC) says it would not be pursuing external funding to recapitalise its fertilizer and chemical production asset, Chemplex Corporation.

In an interview with NewsDay Business last week, IDC chairperson Winston Makamure said instead of seeking deals with suitors to fund the business, he was exploring internal options.

He said Chemplex, Zimbabwe’s biggest fertilizer and chemical manufacturer, had gone past the stage where it required external investors. He said headway had been made in planning to upgrade Chemplex’s unit, Zimbabwe Phosphate (Zimphos) and miner, Dorowa Mines as it moved to boost local fertilizer production. We are not searching for suitors,” he said.

“I think we have gone past that stage. I think that narrative needs to be corrected. If there is a project at Chemplex where we believe we can improve efficiency and production and if there is need for us to have an investor, then we go through that process.

“We are continuously looking at efficiency and maximum production in contributing towards the country’s gross domestic product.

“Where we believe we need a partner whether local or foreign, we then look at that. IDC Zimbabwe was formed in 1963, but at that time the government of the day believed that it needed to industrialise, develop and be self-sufficient.

“So the model is the same in Zimbabwe, South Africa, Zambia and wherever there is an IDC.

“I think there is one in Uganda as well.

“So you find out that the structures or business models are almost the same.

“We are a Zimbabwean wholly-owned entity,” he said.

IDC is targeting to declare $300 million in dividend to government for this year, a significant rise from the $15 million pay-out for 2021.

It took the IDC 12 years to declare a dividend to the State, which controls 100% shareholding in the conglomerate, whose interests span from agriculture to mining and the automobile industries.

The 2021 dividend was handed to government early this year, and the next pay-out would likely be made early 2023.

Makamure said the firm had capacity to improve the next dividend by between 15 or 20 times, which translates to $300 million.