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Revealed: NDC tried selling Komenda Sugar Factory but failed – Alan

The erstwhile National Democratic Congress-led administration headed by John Dramani Mahama tried divesting the country’s majority shares in the defunct Komenda Sugar Factory to a private investor whose identity is yet to be revealed, the Minister for Trade & Industry, Alan Kwadwo Kyerematen has revealed.

However, the deal could not go through due to the failure of the said investor to fulfill his part of the obligations under the Sale and Purchase Agreement.

“Mr. Speaker, the previous Government in late 2016 went through a process of divesting its majority shares to a private investor. However, the process was aborted due to the failure of the identified investor to fulfill the obligations under the Sale and Purchase Agreement”, he noted.

Mr. Kyerematen made this revelation, Thursday, when he appeared on the floor of Parliament and addressed Members on the status of the Komenda Sugar Factory as well as measures the government was putting in place to make it viable.

His comments was triggered by a question posed by the National Democratic Congress (NDC) Member of Parliament for Komenda/Edina/Eguafo/Abirem (KEEA) on “why the Komenda Sugar Factory has been shut down and what are the reasons for shutting down the factory”.

Mr. Kyerematen commenting further said his outfit in an effort to put the factory to viable commercial production, decided to initiative a new process in collaboration with the Transaction Advisor, PricewaterHouse Coopers (PwC), to attract a strategic investor to acquire the assets of the Komenda Sugar and manage the company’s operations.

“Mr. Speaker, I am pleased to announce that the bid evaluation process has been completed by the Transaction Advisor and a recommendation has been made for consideration by the Ministry and Cabinet. I envisage that the final decision in respect of this matter would be taken by the end of April, 2019”, he underscored.

The Government in 2016 secured US$35million EXIM Bank facility to set up the factory whiles a US$24million facility was also set aside to support outgrower farmers.

However, after commissioning the sugar factory on May 31, 2016, the plant has been idle since.

The Minister for Trade & Industry attributed the dormancy of the facility to some serious deficiencies in the planning of the project and other financial, technical and legal challenges.

Due to this, the Ministry, according to Mr. Kyerematen, commissioned a technical audit of the factory to ascertain its technical and operational status.

The findings of the technical audit, he added, revealed that a test run of the facility was never completed before the factory was commissioned due to the unavailability of sufficient sugar cane for the test run.

Further to that, the factory on commissioning was not in a position to produce the required white refined sugar due to the absence of melt clarification units, vertical crystallizers and dosing system which were not fully installed during the test-run.

“Overall, about 35 items had not been installed on commissioning although they are critical for the production of sulphurless white sugar. The land size available for cultivation is far less than 6,000 acres required to supply sugar cane to run the factory at full capacity. There has been no out-grower scheme developed for small scale farm holders to support a nucleus plantation for the factory and generally, the sold condition is the factory catchment area is not favourable and requires significant application of both organic and inorganic fertilizers to improve yields”, he explained.

The MP for KEEA, Dr. Samuel Atta-Mills responding to the Trade Minister’s comments in an interview with journalists on the sidelines of Parliamentary sitting said there is no urgency on the part of the government to look for a strategic investor to invest in the factory and make it viable.

He said the chief and farmers in the KEEA have pledged over 17,000 acres of land for outgrowers to produce sugar cane to feed the factory, stressing that what the government needs to do is to draw up on the loan secured by the previous government for them to expand their farms and to be able to feed the factory.

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