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Mr Ndudzo

Business Reporter
THE Industrial Development Corporation (IDC) has engaged creditors of its chemical manufacturing subsidiary, Chemplex Corporation, to discuss the restructuring and rescheduling of the company’s $40 million debt.

IDC general manager and group chief executive Mr Mike Ndudzo said the strategy was an innovative internal initiative. It has been approved by both Chemplex and IDC’s boards.

The initiative is part of strategies IDC is pursuing for units under its expansive empire, depending on the situation, to turnaround their fortunes or improve performance in the difficult economic conditions.

Mr Ndudzo said that Chemplex requires $60 million for recapitalisation and to settle its catalogue of debts to suppliers, financial institutions, statutory bodies and employees, but it has not been easy to secure such funding.

Chemplex is the largest fertiliser and chemical manufacturing company in Zimbabwe, but its viability and operations have been seriously hampered by tight liquidity pervading the entire domestic economy.

“It is our own internal strategy, we are restructuring debts. We have engaged creditors (suppliers, banks, statutory bodies and workers) to allow us sufficient time to implement the turnaround,” he said.

Mr Ndudzo said the State-owned enterprise had stressed to its creditors the fact that they should be prepared to bear the pain of the turnaround strategy for Chemplex to ensure its survival and mutual gains.

However, the IDC chief would not be drawn into revealing exact details regarding the restructuring and rescheduling of Chemplex’ debts.

Chemplex is still in the process of scouting for technical partners who would inject fresh capital, modern technology, skills and possibly break new markets, but this has taken longer than anticipated.

IDC is on the market scouting for investors or technical partners in Chemplex and is prepared to dilute its interest in the group to about 25 percent.

Mr Ndudzo, however, said the turnaround strategy could be cheaper than bringing a technical/equity partner to inject capital/take up equity or seeking debt funding to turn around the fortunes of Chemplex.

The strategy to bring back viability to Chemplex shall entail measures to breathe a new lease of life into key subsidiaries such as Dorowa Minerals, Zimphos Industries and Zimbabwe Fertilizer Company.

The turnaround interventions, Mr Ndudzo said, will include complete refurbishment of the acid plant at Zimphos and fertiliser plant at ZFC in an effort to ensure viability and address technical insolvency. Mr Ndudzo said little production is currently taking place.

IDC has vast investments covering vehicle assembling, cement and chemical manufacturing, real estate, fertiliser production, edible oils manufacturing, mining, industrial engineering among many others.

Chemplex Corporation has five main operating divisions — Dorowa Minerals, Zimbabwe Phosphate Industries Limited (ZimPhos), Chemplex Marketing, Chemplex Animal and Public Health and G.D. Haulage.

ZimPhos is the country’s sole producer of sulphuric acid, aluminium sulphate (used in municipal water treatment), and superphosphates (used in the manufacture of phosphatic fertilisers).