Minjingu fertiliser firm to spend Sh27.6 billion on its expansion

 

The expansion that will cost $12 million, which is equivalent to Sh27.6 billion, is expected to increase production by 200 percent. PHOTO | COURTESY

Summary

·         Like other nations worldwide ,the country’s agriculture sector was greatly threatened, posing puzzles to Tanzania’s food security and availability of raw materials for industrial productivity

Arusha. Minjingu Mines and Fertilizer Limited has intensified the implementation of an expansion programme aimed at increasing production from the current 100,000 tonnes to 300,000 tonnes by the 2024/25 agricultural season.

The expansion that will cost $12 million, which is equivalent to Sh27.6 billion, is expected to increase production by 200 percent.

The completion of the expansion will reduce Tanzania’s dependence on fertilizer importation, which has recently led to a massive increase in price attributed to the war outbreak between Russia and Ukraine.

Like other nations worldwide, the country’s agriculture sector was greatly threatened, posing puzzles to Tanzania’s food security and availability of raw materials for industrial productivity.

The sixth-phase government under President Samia Suluhu Hassan was forced to allocate Sh150 billion for the provision of subsidized fertilizers in the 2022/23 Fiscal Year.

The decision not only aimed at providing relief to Tanzania farmers, but also increasing the sectors’ production and efficiency, strengthening food security and improving the access of raw materials for domestic industries.

Speaking to The Citizen here, Minjingu Mines and Fertilizer Limited managing director Tosky Hans said the injection of Sh12 million would enable the country to increase its production capacity and significantly reduce the fertilizer shortages the country was grappling with, especially following the external shocks.

“The expansion will increase daily production from 300 tonnes or 100,000 per year to 800 tonnes per day or 300,000 tonnes annually, reaching 2024/25,” he said.

“We have already ordered the plant as expansion activities intensify. The realisation of 300,000 tonnes annual production will significantly help Tanzanian farmers meet their production obligations,” he added.

During a visit to the company located in Babati District, Manyara Region, the firm’s geologist, Ms Grace Kiwelo, said the expansion will force her section to increase the amount of phosphate mined annually.

She said annual phosphate production should at least reach 100,000 tonnes, which is up from 80,000 tonnes and 90,000 tonnes which are produced currently.

“The phosphate annual production target has been about 150,000 tonnes. However, it has been difficult to meet the target due to different factors such as rain and other changes in weather,” she said.

Furthermore, she said in order to meet the new demands, a new excavator has been procured, increasing the number to three, noting that two trucks are required in order to make them six.

However, a source who preferred anonymity told this paper during the visit that a modern phosphate drying site will be developed.

“A modern drying equipment will be installed at the area, something that will enable the company to continue with its production operations throughout the year,” said the source, insisting that reliance on the sun for drying purposes will be significantly avoided.

Also, the source said a new beneficiation machine will be purchased and installed in order to meet the new demand.

Beneficiation involves the crashing of dried materials extracted during the phosphate mining in order to separate phosphate from other impurities.

Separated phosphate according to the source is packaged for being sold to different stakeholders including the Dodoma based Itracom Fertilizer Limited and several others.

“A large proportion of the phosphate is used by the company in manufacturing different types of fertilizers,” said the source.

“The expansion will involve the construction and commissioning of the new plant, namely NPK4. New recruitment of manpower will definitely be required to meet the new demand prompted by the expansion,” according to the source.

Subsidized fertilizers

Speaking in Parliament on Thursday, Agriculture Minister Hussein Bashe assured fertilizer importers and distributors that the government had enough money to service their payments.

“We have Sh150 billion as well as $41 million (equivalent to over Sh90 million) from the African Development Bank (AfDB). All suppliers are assured payment as the ministry is completely transforming the whole system of fertilizer distribution in this country,” he said.

However, he was categorical that no payment will be affected to distributors and importers before fertilizers have been collected by farmers.

“This has caused problems with many distributors, but we believe this is the right direction to go. Payment should be done after fertilizers have been collected and verified,” he told lawmakers in Parliament.

Hinting at the core of reported problems related to the distribution of subsidized fertilizers, Mr Bashe said the size of land cultivated in the 2022/23 season after the introduction of subsidized fertilizers has increased to 15.89 million hectares as compared to the 10.1 million hectares cultivated in the 2021/22 season.

Furthermore, he said Ruvuma, for instance, has increased the size of cultivated land from 630,000 hectares to 960,000 hectares, which has translated to an increased burden on the distribution network.

“The government has given cooperative unions the status of serving as fertilizer distributors in their respective areas in order to reduce pressure and eliminate reported problems,” he said.

According to him, the government has started registering warehouses located in rural areas before providing them with the status of being fertilizer distribution points.

He said the decision will enable farmers to have access to fertilizers even before the commencement of agriculture seasons.

Mr Bashe, who doubles as Nzega Urban Constituency lawmaker, cautioned legislators to expect several challenges due to the tenderness of the subsidy system.

“These shortages will be completed in the next fiscal year. However, my assurance is that no decline in fertilizer utilization will be recorded this season as compared to the 2021/22 season,” he said.

 

 

The status in the northern zone

The Tanzania Fertilizers Regulatory Authority (TFRA) northern zone manager, Mr Gothard Liampawe, said as of February 2, 2023, a total of 16,873 tonnes of subsidized fertilizers worth Sh40.7 billion had been collected by farmers in the Kilimanjaro, Manyara, Arusha, and Tanga regions.

The regions and their respective tonnes of subsidized fertilizer that have been collected by farmers are listed in brackets: Kilimanjaro (9,361.48); Manyara (3,485.98); Arusha (3,206.10); and Tanga (819.70).

He said while 158,399 farmers have been registered in Kilimanjaro Region for the acquisition of subsidized fertilisers, 94,567 had been recorded in Tanga, 80.089 and 73,098 were respectively listed in Arusha and Manyara regions.

“However, more farmers are expected to be registered for collecting subsidized fertilizers in Manyara and Arusha regions that are expected to register higher agriculture season effectively from this month,” he said.

The Ministry of Agriculture issued guidelines instructing farmers requiring fertilizers that support seed germination and crop growth (DAP and Urea) to abide by procedures.

However, the guidelines provide that other types and locally manufactured fertilizers would be enrolled in the system depending on the market prices.

Furthermore, key stakeholders, including farmers, importers, producers, distributors, agents, and agro dealers, would be registered using a digital system that would also coordinate stock movements, sales, and payments.

Other stakeholders expected to play pivotal roles during the process include the regional secretariats, local government authorities, and financial institutions.

Background

Tabling the 2022/23 budget in Parliament last year, Mr Bashe said reaching April, 2022, Tanzania managed to get 436,452 tonnes of different fertilizers.

The amount, according to him, was equivalent to 63 percent of the 698,260 tonnes of fertilizers projected as the overall consumption demand in the 2021/22 season.

“274,973 tonnes of the total amount were imported, while the 43,579 tonnes and 117,900 tonnes were respectively locally manufactured as well as remains from the 2020/21 season,” he said.

By Louis Kalumbia