African Potash has signed another deal with a distributor in Zambia in less than a month. The company will team up with Rockwell Fertilizers after it had signed a deal with Nutri-Aid Trust, a Zambian non-profit less than a month before. Nutri-Aid Trust is trying to develop a dealer network in villages throughout Zambia and African Potash has become part of a supply network serving about 2,500 outlets that will provide approximately 300 farmers with fertilizer. Under the deal between African Potash and Nutri-Aid Trust, the former will provide at least 500,000 tons of fertilizer annually.
Under the 12-month deal with Rockwell, African Potash will receive 50 percent of its cash in advance for any order with the remainder following 45 days later. Rockwell will receive 30 percent of the profit from business generated while the size of orders is expected to vary “in accordance with buyer demand”.
African Potash’s Chairman Chris Cleverley commented that the company was “delighted to have further strengthened our trading presence in Zambia and the southern African region through the signing of this trading agreement with Rockwell, which complements our recently announced trading agreement with Nutri-Aid.” Mr Cleverley also stressed that “with a number of strategic partners in place through whom we can secure off-take agreements for the purchase of our fertilizer product, and the results of this strategy already showing success, I believe African Potash is well set for continued growth.”
African Potash is also an owner of the 702 sq-km Lac Dinga potash project in the Republic of Congo, which can help the company to produce its own product. The longer-term goal is to set up a vertically integrated operator that covers the mining, processing and marketing skills and thus taps into a region that purchases around 10 million tons of fertilizer a year.