High transport costs hit Botash

CHAKALISA DUBE
Staff Writer | Monday July 29, 2013 00:00

The company's MD Montwedi Mphathi told Mmegi Business last week, 'The huge costs of transporting our products, mostly Soda Ash from Botswana to our markets within the SADC region, particularly South Africa (Botswana Ash's main market for the product) make us less competitive when compared to other firms in the same business from countries such as the United States of America (USA),' he said.He explained that US companies have it cheaper because they transport huge tonnes of soda ash.

'Ships that transport their products, mostly soda ash, also go back with return loads of products from other manufacturers and suppliers in Africa to the USA,' he said, adding that this ensures US transporters offset costs through back and forth business.'This is the same with other countries such as Kenya who export their products to South Africa and other African nations. With us, wagons come back home empty after delivering in South Africa but we still pay for fuel and other costs they incur coming back,' he said.

The Botswana Ash MD said the company is forced to charge a margin on its prices in a bid to recover transport costs.'Charging a little more than our competitors gives them an edge over us,' he said.He added that the situation is also not helped by the fact that soda ash prices have been depressed for the past three years while fuel prices continue to increase.Mphathi said that they have engaged the Botswana Railways (BR) several times which mostly transports their soda ash to South Africa, with a view to improve the situation. 'Of late we have been trying to improve on the turnaround time of the BR wagons that transport our soda ash to South Africa. If they (wagons) move faster the cost of transportation goes down,' he said.

Botswana Ash currently produces 300,000 tonnes of soda ash and 650,000 tonnes of salt per year. The products are sold in Zimbabwe, Zambia and the Democratic Republic of Congo (DRC).Most of the soda ash goes to South Africa where it is used in various industries such as the glass sector. India also buys excess soda ash from Botswana Ash.Currently, the mine has 50,000 tonnes of soda ash and 200,000 tonnes of salt in excess.Soda ash is mostly used in the chemical industry, the detergent industry and other industries during production processes.Salt has various industrial and domestic applications. Domestic applications include as a food preservative and to add flavour to food.