NDC rushed to commission Komenda Sugar Factory – Alan Kyerematen
The Minister for Trade and Industry, Mr Alan Kwadwo Kyerematen, has revealed that the National Democratic Congress (NDC) rushed in commissioning the Komenda Sugar Factory, hence, its inability to operate.
He indicated that the factory, as the time of commissioning, lacked 35 items which were critical for the operation of the factory.
“Overall, about 35 items were not installed on commissioning, although they are critical for the production of white sugar.
“Those critical components are partly the reason why the type and quality of sugar expected from the factory has not been realised, and I can’t tell why the previous government didn’t take steps to do the installations.”
He also indicated that there were some technical and deficiencies which made it impossible for the plant to operate.
Mr Kyerematen, who revealed this at the floor of Parliament yesterday, indicated that his Ministry, in September 2017, commissioned a technical audit on the factory to ascertain its technical and operational status, and found out that a test run was not completed before the commissioning of the factory due to the unavailability of sufficient sugarcane.
He also observed that the factory, on commissioning, was not in the position to produce the required refine white sugar due to the absence of some processing component units which were not fully installed during the test run. Again, the land size available for the cultivation of sugarcane was far less than the 600 acres required to run the factory at full capacity.
Also, there were no schemes developed for outgrower farmers to support a nucleus plantation for the factory, he said, and added that soil condition in the factory catchment area is not favourable, and it requires significant application of both organic and inorganic fertilisers to improve it.
The Minister also revealed that the previous government went through a process of divesting the majority share of the factory to a private person, however, the process was abandoned and aborted due to the failure of the identified investor to fulfill the obligations under the purchase sales and agreement, and had contributed to the factory’s inability to operate.
“Therefore, the Ministry, in an effort to put the factory to viable commercial production, decided to initiate a new process in collaboration with a transaction adviser to attract another strategic investor to acquire the assets and manage its operations,” he indicated.
Mr Kyerematen said that the process had been completed and had been sent to the Ministry and Cabinet for approval, and hoped a final decision would be taken by the end of this month, April.
“Mr Speaker, I am pleased to announce that the reevaluation process has been completed by the transaction adviser, and a recommendation has been made for the consideration of the Ministry and Cabinet.
“I envisage that the final decision would be taken by the end of April of this year.”
Mr James Klutse Avedzi, Deputy Minority Leader and Member of Parliament for Ketu South, who commented on the outgrower issue, indicated that the previous government secured a loan of about $24 million to support the small outgrower farmers to produce the sugarcane and feed the factory, so what has become of that loan
However, the Trade Minister, in response, indicated that it is true that a loan was approved for the development of the plantain, but because of the technical and financial issues associated with the project, a decision was taken not to active the loan until the issues are resolved.
On the financial challenges, the Minister said that the previous government took a loan of $35 million to establish the factory, but a series of financial evaluations done showed that the value that was put on the factory was not equal to the value of the plant, hence, a forensic audit has been commissioned to probe into it.