THE Industrial Development Corporation (IDC) has enlisted Ernst & Young Advisory Services (EY) to facilitate the disposal or dilution of its stake in Chemplex Corporation and in its non-fertiliser manufacturing business units.
By Tinashe Kairiza
In April this year, cabinet singled out parastatals, including the IDC, earmarked to benefit from efforts to revitalise state-run enterprises.
Chemplex is the largest fertiliser-producing firm in Zimbabwe, with business interests in mining and insurance.
Through a “Request for Expressions of Interest” notice, the IDC said disposal or dilution of its shareholding in non-core businesses was part of a broad strategy to recapitalise its fertiliser manufacturing entity.
“The Industrial Development Corporation of Zimbabwe Limited (IDCZ) has mandated Ernst and Young Advisory to facilitate the recapitalisation of Chemplex Corporation Limited (Chemplex) in order to capacitate the fertiliser value chain. This is to be achieved through the dilution of IDCZ’s 100% shareholding in Chemplex and where appropriate, the dilution and/or disposal of its non-fertiliser businesses by identifying a potential strategic equity partner(s) for Chemplex,” the IDC said in a statement.
Chemplex consists of four subsidiaries, namely Zimbabwe Phosphates Industries Limited (Zimphos), G and W Industrial Minerals Private Limited, Zimbabwe Fertiliser Company (ZFC) and Allied Insurance Company Private Limited.
Chemplex made forays into the Zimbabwean market in 1924, setting up a sales and distribution centre in Bulawayo primarily to supply the mining sector with key consumables such as explosives.
The IDC is also scouting for potential suitors who can directly inject fresh investment capital into its fertiliser manufacturing unit.
Over the years, the IDC has invested heavily to increase its fertiliser manufacturing capacity. However, the chronic foreign currency shortage crippling the local economy has hamstrung the IDC, among other industry players, from importing key raw materials required to sustain operations. Zimbabwe’s fertiliser demand this season is expected to surge to 590 000 tonnes.