Botash on expansion drive

SHARE   |   Monday, 01 February 2016   |   By Phillimon Mmeso
Media touring BOTASH facilities Media touring BOTASH facilities

The local mining industry has been hit hard by declining commodity prices which led to some closing and others retrenching in the last two years. But there is one special exception to this tide - Botswana Ash Mine jointly owned by Botswana Government and CAH. Botash, which is the leading producer of both soda ash and industrial salt in Southern Africa, is sailing through in the financial torrents in the mining sector due to high demand of their products. Briefing the media on their operations, Botash Managing Director Montwedi Mphathi said their aim is to be the leader in the manufacturing of natural sodium products for industrial and human consumption in the Sub Saharan region.

Botash, which has managed to pay government P90 million in dividends, has developed a strategy which will see it diversifying its products. One of their strategies which Mphathi admitted is to double their Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) to P300 million by 2018. Mphathi, who joined Botash in 2011 from BCL Mine, said that they want to protect their current market especially South Africa where they command 60% market share and want to do that by having strategic alliances with detergent manufacturers by offering full supply chain and packaging variants.

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On salt, Mphathi revealed that they have partnered with one of South African leading salt manufacturers Cerebos to offer packaging variants of fine salts from 500g to 2kg.  This, according to him, was motivated by the closing of borders by the government of importing of salt products into the country. Botash, which recently won a P20 million tender to supply Livestock Advisory Centres with coarse salt for animal feeds, wants to be bullish on the product by vigorously marketing it. As part of their market development strategy, Mphathi said that they are targeting new customer base in sub Saharan Africa for soda ash and salt in Mozambique, Tanzania, Rwanda, Burundi, Angola and Democratic Republic of Congo.

To diversify their products, Mphathi revealed that they are in commercial negotiations with Air Liquide to partner in carbon dioxide trading. Botash, according to its MD, is also investigating if they could extract other chemicals from Sua brines and they have since discovered the presence of the potash, sodium sulphate and boron. They are discussing shareholding options with potential partners. One of the biggest clients of Botash is Zambia which consumes 24% of the salt sales and as a way of cementing their position in the country, Mphathi said that they are building a hub in the country to make their products readily accessible to customers and develop pre-packs. 
High transport costs

One of the challenges that Botash is facing is high transport cost which are currently standing at P300 million per annum. The soda ash mining company is currently using Botswana Railways to transport their products to South Africa and use trucks for countries in the north. Another challenge that the mine is facing is the breakdown of their plant, and Mphathi said that they are going to have a shutdown to repair.  He conceded that a thorough job was not done last year during the shutdown.

The collapse of the Palapye Fengyue Glass Project dealt a huge blow to Botash as it was going help them due to low transport cost, said the Managing Director. He said that before the project collapsed, negotiations were at an advanced stage with the mine to supply the company with 30 000 of soda ash annually which is used to manufacture glass.