Soda ash mine targets P300 million EBITDA by 2018
The largest producer of natural sodium products in the region, Botash (Botswana Ash) is looking at broadening its horizon and tapping into the vast possibilities that comes with the mining of soda ash.
In a recent familiarisation tour of the plant by the minister of Mineral Resources Green Technology and Energy Security Sadique Kebonang, BOTASH Managing Director Montwedi Mphathi said they expect the year 2017 to be one of the best in terms of demand for their product and profitability.
Despite the mining industry facing a severe decline of commodity prices which has resulted in the closure of both BCL and Tati Nickel mines, Botash is buoyant and forecasts another good year, following an impressive 2016 in which the mine paid government a dividend of P90 million.
Briefing the media before the plant tour, Mphathi said they should maximise on the opportunities presented by their product and not just rely on the exportation of salt.
This forward integration strategy will see Botash looking at completely new products.
“These include products such as sodium bicarbonate. It is not really a new product, we always produced it but we have not been selling it,” he said.
Mphathi said they also want to tap into the air cleaning industry as they have the resource in abundance to satisfy the African market.
“Products such as sodium sulphate has so many industrial application especially in agriculture, paper making and steel industries. There’s so much untapped potential here and we are planning to explore all of them,” he said.
Another unexplored opportunity is in the detergent and cosmetics industries. Light soda ash is used in both powdered, paste and soap detergents where it acts as a builder.
It can also be used alone or in conjunction with sodium tripoly phosphate. The light soda ash also acts as a water softener.
According to the Botash General Manager~ Corporate Services Victoria Lekoma, they will form strategic alliances with detergent manufacturers in South Africa and by offering full supply chain and packaging variants.
Currently Botash only sell less than 2% of its production to the detergent industry.
Lekoma said she’s confident they will certainly achieve their target of P300 million EBITDA (earnings, before, interest, depreciation, tax and amortization).
“We are already 70% there, and once again we expect 2017 to be a very good year,” she said.
Lekoma further said they also intend to repackage their salt packs into 500g-2kg bags.
“We are targeting markets in Malawi, Zambia and DRC where our Botsalt product is very popular,” she said.
She further said one of their strategies in 2017 is to protect their current market especially South Africa.
Her sentiments were shared by the General Manager-Operations Kangangwane Phatshwane who said even though the opportunities are many, locals and private companies have failed to take advantage to use a resource that is in such abundance in the country.
Phatshwane said their production capacity for soda ash stands at 300 000 tonnes per annum and 650 000 for salt. The salt production is currently at around 420 000 tonnes per annum.
“This in anyway does not mean production constraints, we are only limited by the market,” said Phatshwane.
Phatshwane said they have made it conducive for local players to venture into ash products industries but with very little success.
“We gave very low prices to help local businesses, but we had to rethink our strategies after realising that our local players only put a mark up on the raw material and re-sell it,” he said. :”We need serious people who will take advantage of our low prices and use the product for what was initially agreed upon,” Phatshwane said.
Botswana Ash (Pty) Ltd is jointly owned by Botswana Government and CAH (Chlor Alkali Holdings Group South Africa) at 50% shareholding.