From Whom Did Gono Buy the Fertilizer?

By G. Mpofu, Harare

Published on November 23, 2006

The fertilizer importation saga refers and continues. I did a company profile search on the internet on all the prominent South African news sites about the South African fertilizer supplying company called 'Intshona Agriculture Products'.

The search yielded NOTHING about the company except the story attributed to the RBZ Governor published on 28th June 2006 by www.iol.co.za sourced from Reuters news agency.
Given the appetite the South Africans have for the media coverage whenever an empowerment deal sealed, it is surprising that the so called 'Intshona Agriculture Products' escaped the attention of the journalists there.

The Sunday Mirror wrote that 'Intshona Agriculture Products' is a BEE or empowerment company. If this is true, why would it escape the attention of the media in South Africa.

An online news item on 29th June 2006 alleged that Intshona executive director is a lady called Dr Crista van Louw.

A similar internet search about her produced no results! There is a website of a company called Intshona (www.intshona.com) that supplies "All Seasons™ UHT Long Life Full Cream Milk", whose contact person is a Lambertus Louw.

The website has no other details except a Malmesbury, Cape Town telefax number, +27 22 482 2858.

An online name search on the South African Companies Registration Office (SACRO) website: www.cipro.co.za/registration_forms/reg_forms.asp, one will find out that 'Intshona Agriculture Products' is a company related to 'Intshona Milk Products' and was only registered on 5 April 2005, whose enterprise number is 2005/010852/07.

Can someone go to South Africa and check what can be found at A M Trust Building, 5 Church Street, Malmesbury, Cape Town, which is the company's registered business address.
One shudders to think that a company registered in April 2005 has a manufacturing capacity.

We are then forced to assume that 'Intshona Agriculture Products' is simply an agricultural commodity broker, just like Rarefield Investments (Pvt.) Ltd, whose major shareholder and CEO is Walter Mzembi, the MP for Masvingo South.

Mzembi chairs the Parliamentary Portfolio Committee on Lands, Land Reform, Resettlement and Agriculture and was present when fertilizer deal was unveiled. Ironically, he is also reported to have been used by the RBZ as a consultant in the fertilizer deal. Oh what a conflict of interest!

In the 11 November 2006 press statement, the RBZ Governor said about this company: "In the case of Intshona, who are one of the contractors that have unfortunately been labeled as fly-by-night brief-case traders...Contrary to newspaper reports that Intshona was a small operation of no fixed abode, Intshona are instead a formidable force to reckon with, not only regionally but also internationally." Can he repeat this statement with such a startling exposure about the supplier?

It is also surprising that such a purportedly high-level deal escaped the attention of the online Nedbank Media Centre in which its head of structured corporate finance, a fictitious Mr Dean Lavits, is said to have been involved (www.nedbank.co.za).

This is an institution that collects and places on its official website any media article mentioning its name and activities.

There has been the mention of Rand Merchant Bank (RMB) of South Africa of having been involved. Nedbank and RMB are not related in any way. So who structured thev finance?

If this was a rightful responsibility of a government (which is NOT) to import fertilizer for resale, someone must account to the nation how the RBZ Governor is found in the thick of things beyond allocating foreign currency.

He and the Ministry of Agriculture want to destroy our own local fertilizer companies, Sable Chemicals, Zimbabwe Fertilizer Company (ZFC) and Windmill, indirectly after the earlier efforts failed to create a monopoly by nationalising them.

How much foreign currency did they collectively require to recover the production capacity?
In the same press statement, Gideon Gono said: "At current structures, the fertilizer industry is overly concentrated in a web of a few intertwined owners, which breeds room for collusive behaviour, at the detriment of the country’s agricultural sector. There is, therefore need for these complex ownership structures to be simplified in a manner that stresses on productive efficiency."

We should interrogate this remark by showing who are the owners of the 3 fertilizer companies in Zimbabwe. According to the Privatization Agency of Zimbabwe (PAZ) website and the MBendi online directory of organisations, Chemplex, the wholly owned subsidiary Zimbabwe Phosphate Industries Limited (Zimphos), owns, through a combination of direct and indirect holdings, 50% of Zimbabwe Fertiliser Company (ZFC) Limited.

Shareholding of ZFC thus consists of: Chemplex Corporation (50%), TA Holdings (22.5%), and Norsk Hydro, a Norwegian conglomerate (27.5%) and Yara Zimbabwe, a subsidiary of Yara, another Norwegian multinational. ZFC has two fertilizer plants and is the largest fertilizer manufacturer in Zimbabwe.

Through a 50% equity stake in Fertiliser Holdings Limited and a 26% stake in Chemical & Gas Holdings (Pvt) Ltd, Chemplex has a strong position in Sable Chemicals Industries, which is the sole Zimbabwe manufacturer of ammonium nitrate.

ZFC is the largest customer.The government holds 36% equity in Sable. Diversified local conglomerate TA Holdings is also a key shareholder in Sable. Norwegian firm Yara, which wholly owns Windmill, is also an investor in Sable Chemicals, with 11 percent of the shares.

From these shareholding details, 2 of the fertilizer companies can be considered to be very local. Is Gono alleging 'sabotage'? Is this not simply malicious? Why is he showing resentment towards foreign shareholders in 2 of the companies yet he is part of the national efforts to bring in foreign direct investment (FDI)?

The fertilizer issue is so embarrassing and scandalous to say the least. Come to think of it - we have had similar incidents of this nature, where the RBZ is said to have done procurements. Lets revisit the procurement of fuel, grain, wheat, agro-chemicals and agricultural equipment.

Who are the parties involved, who can tabulate the step-by-step process involved and to what extent was the Procurement Rule Book flouted or followed? Icho!!