Geza Ulole
JF-Expert Member
- Oct 31, 2009
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Yaras 30bn/- investment worries Minjingu
By ABDUEL ELINAZA, 14th February 2011 @ 11:00, Total Comments: 0, Hits: 25
THE governments decision to allow a multi-national fertilizer company to build a warehouse at the Dar es Salaam Port has sparked debate over the future of Manyara-based Minjingu Fertilizer Company, which is already struggling against cheap imports in the local market.
The government has approved the over 20 million US dollars (about 30bn/-) project by Yara International to build the warehouse to serve the local and neighbouring countries fertilizer markets.
But, the local producer wonders whether it will cope with the fierce competition brought by the Norwegian multinational -- the worlds biggest producer of NPK fertilizers. Minjingu General Manager Anup Modha says the warehouse construction is a big blow to the local firm, whose current production stands at merely 20 per cent of its installed capacity.
I fail to understand why the government has allowed (Yara) to construct the warehouse, despite supporting us (Minjingu) to produce the imported fertilizers, locally, charges
Mr Modha, noting that the critical problem is that Tanzanians are reluctant of using the local nourishment, which has higher quality than imports.
He told the Business Standard from Arusha via a telephone interview that excessive imports of fertilizers forced his firm to lay off the entire production workforce of 200 in last years fourth quarter due to lack of market. Production cessation also affected hundreds of transporters who are the main stakeholders of the factory.
We are not against construction of the warehouse but we think that it doesnt augur well with our future... we welcome any additional supply in case of shortage but for now we have the capacity to meet the countrys annual demand of 150,000 metric tonnes, Mr Modha said.
However, Minister for Agriculture, Food Security and Cooperative Jumanne Maghembe has ruled out competition between Yara and Minjingu, saying the two companies trade in different products. The two are producing different types of fertilisers -- Yara deals with NPK fertilizers while Minjingu produces phosphates.
These are quite different form of fertilizers, Prof Maghembe said during a tele-interview from Dodoma. NPK stands for Nitrogen (N), Phosphorus (P) and Potassium (K). The minister said plants use fertilizers to supplement nutrients not readily found on the soil.
Each plant therefore needs different type of fertilizers -- NPK, Urea or phosphates, Prof Maghembe, himself an agriculture expert, said. He said the national demand for fertiliser remains high, with local farmers using only eight kilogrammes of fertilizer per acre against Netherlands usage of 400 kg per acre.
The Ministry of agriculture wants farmers to have quality fertilizers at competitive prices and timely delivery, said Professor Maghembe, hinting that, Talks are underway to construct an Urea and Calcium ammonium nitrogen plant in Mtwara. Sokoine University of Agricultures
Prof Andrew Temu defends the warehouse construction, saying Yara International just wants to tap the regional market by turning the Dar es Salaam port into the fertilizer hub for the region.
We better look at this issue broadly, with a regional economic eye...Dar es Salaam is the corridor for a number of landlocked countries, most of which are fertilizer insufficient, argues Prof Temu. Minjingu produces a single type of fertilizer for certain types of soils while farmers need several types --including horticulture fertilizer -- some of which come in liquid form.
But, Mzumbe Universitys Dar es Salaam School of Business, Dr Honest Ngowi believes in protection of local industries, saying the government should always protect local industries to enable them gain competitive edge against imports. He says the collapse of local industries
have multiple negative effects on the economy, citing cement companies that have been subjected to fierce competition from cheap imports.
The competition aside, we have to protect our industries for economic wealth. Yara International presently supplies 120,000 tonnes of fertilizer annually to Tanzania and neighbouring countries, but the installation of this facility would increase the quantities to meet the growing demand.
Yara Tanzania Limited Managing Director Wayne Forbes says the new terminal will have a revolving storage capacity of 45,000 tonnes of fertilizer, which will be sufficient for the medium term requirements. The project is a result of President Kikwetes visit at Yaras Headquarters in Norway in 2007, where he invited the group to invest in Tanzania.
MY TAKE
What suprizes me this Minjigu firm was sold to current owners at throw away price plus the phosphate reserves and availability abundant gas reserves in this country but after years of not capturing the market due to their untouchable prizes now they are complaining! Their argument is bloated let them shut the plant if they can't get enough capital to run the factory at its capacity! Let another company come and tap the market fro them
By ABDUEL ELINAZA, 14th February 2011 @ 11:00, Total Comments: 0, Hits: 25
THE governments decision to allow a multi-national fertilizer company to build a warehouse at the Dar es Salaam Port has sparked debate over the future of Manyara-based Minjingu Fertilizer Company, which is already struggling against cheap imports in the local market.
The government has approved the over 20 million US dollars (about 30bn/-) project by Yara International to build the warehouse to serve the local and neighbouring countries fertilizer markets.
But, the local producer wonders whether it will cope with the fierce competition brought by the Norwegian multinational -- the worlds biggest producer of NPK fertilizers. Minjingu General Manager Anup Modha says the warehouse construction is a big blow to the local firm, whose current production stands at merely 20 per cent of its installed capacity.
I fail to understand why the government has allowed (Yara) to construct the warehouse, despite supporting us (Minjingu) to produce the imported fertilizers, locally, charges
Mr Modha, noting that the critical problem is that Tanzanians are reluctant of using the local nourishment, which has higher quality than imports.
He told the Business Standard from Arusha via a telephone interview that excessive imports of fertilizers forced his firm to lay off the entire production workforce of 200 in last years fourth quarter due to lack of market. Production cessation also affected hundreds of transporters who are the main stakeholders of the factory.
We are not against construction of the warehouse but we think that it doesnt augur well with our future... we welcome any additional supply in case of shortage but for now we have the capacity to meet the countrys annual demand of 150,000 metric tonnes, Mr Modha said.
However, Minister for Agriculture, Food Security and Cooperative Jumanne Maghembe has ruled out competition between Yara and Minjingu, saying the two companies trade in different products. The two are producing different types of fertilisers -- Yara deals with NPK fertilizers while Minjingu produces phosphates.
These are quite different form of fertilizers, Prof Maghembe said during a tele-interview from Dodoma. NPK stands for Nitrogen (N), Phosphorus (P) and Potassium (K). The minister said plants use fertilizers to supplement nutrients not readily found on the soil.
Each plant therefore needs different type of fertilizers -- NPK, Urea or phosphates, Prof Maghembe, himself an agriculture expert, said. He said the national demand for fertiliser remains high, with local farmers using only eight kilogrammes of fertilizer per acre against Netherlands usage of 400 kg per acre.
The Ministry of agriculture wants farmers to have quality fertilizers at competitive prices and timely delivery, said Professor Maghembe, hinting that, Talks are underway to construct an Urea and Calcium ammonium nitrogen plant in Mtwara. Sokoine University of Agricultures
Prof Andrew Temu defends the warehouse construction, saying Yara International just wants to tap the regional market by turning the Dar es Salaam port into the fertilizer hub for the region.
We better look at this issue broadly, with a regional economic eye...Dar es Salaam is the corridor for a number of landlocked countries, most of which are fertilizer insufficient, argues Prof Temu. Minjingu produces a single type of fertilizer for certain types of soils while farmers need several types --including horticulture fertilizer -- some of which come in liquid form.
But, Mzumbe Universitys Dar es Salaam School of Business, Dr Honest Ngowi believes in protection of local industries, saying the government should always protect local industries to enable them gain competitive edge against imports. He says the collapse of local industries
have multiple negative effects on the economy, citing cement companies that have been subjected to fierce competition from cheap imports.
The competition aside, we have to protect our industries for economic wealth. Yara International presently supplies 120,000 tonnes of fertilizer annually to Tanzania and neighbouring countries, but the installation of this facility would increase the quantities to meet the growing demand.
Yara Tanzania Limited Managing Director Wayne Forbes says the new terminal will have a revolving storage capacity of 45,000 tonnes of fertilizer, which will be sufficient for the medium term requirements. The project is a result of President Kikwetes visit at Yaras Headquarters in Norway in 2007, where he invited the group to invest in Tanzania.
MY TAKE
What suprizes me this Minjigu firm was sold to current owners at throw away price plus the phosphate reserves and availability abundant gas reserves in this country but after years of not capturing the market due to their untouchable prizes now they are complaining! Their argument is bloated let them shut the plant if they can't get enough capital to run the factory at its capacity! Let another company come and tap the market fro them