African Potash PLC (LON:AFPO), the fertiliser trading firm, said it signed a deal with a distributor in Zambia.
The 12 month tie-up with Rockwell Fertilisers follows less than a month after it inked an agreement with Nutri-Aid Trust, a Zambian non-profit organisation.
Under the latest collaboration, AFPO will receive 50% of its cash upfront for any order and the remainder 45 days later.
Rockwell will receive 30% of the profit from business generated. The size of orders is expected to vary “in accordance with buyer demand”, the firm said.
Chairman Chris Cleverley added: “We are 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.
“With a number of strategic partners in place through whom we can secure off-take agreements for the purchase of our fertiliser product, and the results of this strategy already showing success, I believe African Potash is well set for continued growth."
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As mentioned earlier, AFPO is also working with Nutri-Aid Trust, an organisation working to develop a dealer network at village level across Zambia.
It will be part of a supply network, serving 2,500 outlets, which each then provide around 300 farmers with fertiliser.
A first delivery took place on July 10 and subsequent sales by African Potash to the outlets over the following days.
The jewel in the crown (so far as the company’s trading operation is concerned) is an deal to supply at least 500,000 tonnes of fertiliser a year to groups introduced by African free trade group, Comesa.
Vertically integrated company
AFPO also owns the 702 square-kilometre Lac Dinga potash project in the Republic of Congo, which offers the potential, eventually, for it to produce its own product.
The longer-term plan is to create a vertically integrated operator that has the mining, processing and marketing skills to tap into a region that buys in an estimated 10mln tonnes of fertiliser a year.
In an interview with Proactive chairman Cleverly pointed to the development of Dangote Group, run by Aliko Dangote, Africa’s richest man, as revealing just where Africa’s smart money is headed.
Having started out in cement and then focused on sugar, Dangote is staking its future on the nascent agricultural sector in Africa and fertiliser in particular. Others are following in its wake.