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Fengyue plant was a disappointment- Mphathi

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The liquidation of the controversial Botswana Development Corporation’s Palapye Fengyue glass project was a disappointment for the soda ash and salt producers, Botswana Ash (Botash). 

Botash, which is currently the biggest supplier to South African market with about 60 percent, had pinned its hopes to supply Botswana’s first glass manufacturers, Fengyue glass plant in Palapye. Unfortunately, the glass project did not see the light of day and faced liquidation.

Responding to Business Trends during a press briefing this past Tuesday about looking for local markets, Botash Managing Director, Montwedi Mphathi said, “the Palapye plant was a disappointment. We had concluded that we would supply about 30 000 tonnes to them per annum.” Unfortunately the project was later said to be not viable. “We pleaded with BDC to find other alternative ways but they said the market would not survive and therefore it cannot be continued,” added Mphathi.

Afterwards, BDC engaged a glass-manufacturing consortium from UK to conduct a due diligence of the project. It advised that the project was not a viable business operation. BDC boss, Bashi Gaetsaloe once confirmed to the parliamentary statutory bodies’ committee in 2015 that, glass manufacturing in Botswana was proven to be extremely risky and unprofitable.  Meanwhile, glass production is the largest application for dense soda ash.

About half of the soda ash produced worldwide is used in the manufacture of glass. In this application, soda ash is used as a fluxing agent in that it lowers the melting temperature of the raw material – pure silica – thereby reducing energy requirements for glass production.

Container glass covers a wide range of different products that include bottles, jars and other containers. About 46percent of all glass that is manufactured is used for container glass. Flat glass accounts for 42 percent of glass production and includes items such as architectural glass, car windscreens, windows, mirrors and frames.

Other glass manufacture accounts for 12 percent of glass production and includes textile, fibre optics and insulation fibre glass. It is understood that there is currently only one flat glass manufacturer in South Africa that is Botash’ s biggest consumer of soda ash; whilst the other six are importers.

With the South African market combined with the BDC glass project, it would have been a better opportunity for Botash. Moreover, Botash sells around 20 percent of soda ash to the chemical industry sector. In this sector, both dense and light soda ash is used in large number of chemical reactions to produce inorganic or organic compounds that are in turn used in a range of different applications.

It can be used to produce sodium silicates that have a wide range of uses in the production of chemicals such as silica. It also has application in pulp and paper manufacturing.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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