The Managing Director of Botswana Ash (Botash), Montwedi Mphathi has identified high transportation costs as one of the biggest challenges that the salt and soda ash producer has had to grapple with.
Speaking during a media briefing last week in Sowa Town, Mphathi said Botash spends around P300 million annually to transport soda ash and industrial salts to South Africa which is their major market. The transport costs are paid to rail companies Botswana Railways and Transnet in South Africa which the company uses for transport.
Botash is a 50/50 joint venture between the government of Botswana and Chlor Alkali Holdings (CAH) Group, a South African company. The company currently produces 300 000 tonnes of soda ash per annum and 530 000 tonnes of salt per annum. It supplies 100 percent of the glass manufacturing companies in South Africa with soda ash.
“These costs increase higher than the inflation rate and we have to admit that they are a challenge to us. We transport our products through rail because we produce high volumes which make it difficult for us to perhaps use road transport as some may suggest due to reduction in fuel prices. This would mean that we would require more trucks to transport the product and it would affect the country’s roads,” said Mphathi.
he added that Botash is looking to expand its market to North African.
“Most of our markets in North Africa buy our salt for human consumption and industrial demand for our products is very low. We are however looking at establishing our markets in the North African countries,” he said.
Currently BOTASH exports 41 percent of its salts to South Africa, 24 percent Zambia, Zimbabwe 16 percent, Malawi seven percent, DRC at two percent and four percent is supplied locally. Mpathi was however optimistic that should they explore other markets in North Africa they would double their earnings to P300 million by 2018.
“We are optimistic that should we establish our market in the North African countries, we would double our earnings to P300 million by 2018. Demand is also going to increase obviously due to the fact that the population is also increasing,” he said.
He also said that they are currently negotiating with Air Liquide so that they can trade in Carbon- dioxide in an endeavor to diversify their market. Mpathi revealed that Botash currently competes with its sister company in Walvis Bay, Namibia which is owned by CAH and another company in Kenya.
The Operations Manager at Botswana Ash (BOTASH), Kangangwani Phatshwane also revealed that they have identified a lucrative market in the Democratic Republic of Congo (DRC) where they intend to sell their soda ash. DRC has the second highest mining activity in the continent after South Africa.
“As we look into moving our products to the North African countries, we have identified that DRC as a potential market and we are busy promoting our products there. DRC has the second highest mining activity in Africa therefore they are our potential customers,” he said.
He revealed that the North African countries which they currently supply with salts, provide their own transportation.
Phatshwane also emphasized that their major challenge is that they are located far away from their markets hence the challenging transportation costs. He however said that should there be industrialization in countries like Zimbabwe and Zambia, the situation would improve.
On a different note, Phatshwane revealed that BOTASH is also looking at promoting investment in eco-tourism to add value to Sowa Town and leave a legacy even after mining activity lapses.
“We have signed an agreement with one of the investors and we have given him access to develop an eco-tourism lodge as you know that Botash is well placed in the Makgadikgadi, which is very lucrative tourism area. The lodge will cater for events such as water sports and even eco education activities,” he said.
He said the project will be part of the Makgadikgadi Water Management Frame Network which stretches from Mosu to Nata villages. He emphasized that the idea is part of their drive to make Sowa Town part of the tourism trade.
“As you might be aware, Sowa Town offers one of the best bird watching areas in the country particularly due to its large population of flamingos. This endeavor will also add value to Sowa Town even after the Botash mining activity ends,” he said in conclusion.
