Government of Ghana put up Komenda Sugar Factory for sale

PriceWaterHouse Coopers (PwC) has been appointed as the transaction advisors as the government of Ghana put up Komenda Sugar Factory for sale after the bid evaluation process was completed.

Alan Kyerematen, the Minister of Trade and Industry – appearing on the floor of Parliament to update lawmakers on the status of the company, confirmed that the recommendation for consideration was made by his ministry and Cabinet.

“The ministry, in an effort to put the factory to viable commercial production, decided to initiate a new process in collaboration with the Transaction Advisor, PwC, to attract a strategic investor to acquire the assets of the Komenda Sugar Factory and manage the company’s operations.

“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 will be taken by the end of April, 2019,” Mr. Kyerematen said.

According to Alan Kyerematen, 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 failure of the identified investor to fulfil obligations under the Sale and Purchase Agreement.

Alan Kyerematen stated that in September 2017 the ministry commissioned a technical audit of the factory to ascertain its technical and operational status. The findings of the technical audit included a test-run that was never completed before the factory was commissioned due to the unavailability of sufficient sugar cane.

He added that the factory, on opening, was not in a position to produce the required white refined sugar due to the absence of critical processing component units such as a melt clarification unit, vertical crystallisers and dozing system. These are units which were not fully installed during the test-run.

The Trade Minister’s appearance in Parliament house was triggered by a question filed by Dr. Samuel Atta-Mills, the Member of Parliament for Komenda/Edina/Eguafo/Abrem, as to “why the Komenda Sugar Factory has been shut down, and the reasons for shutting down the factory”.

Dr. Samuel Atta-Mills, in response to the minister’s statement on the floor of the House, indicated that there is “no sense of urgency from government”, and they are taking their time in looking for an investor.

According to him, the farmers and chiefs in the area have pledged over 17,000 acres for outgrowers to produce sugar cane and feed the factory – maintaining that what government needs to do “is to draw down on the loan that the previous government procured for them to expand their farms and be able to feed the factory”.

Government in 2016 secured a US$35million EXIM Bank facility to set up the factory, while a US$24million facility was also set aside to support outgrower farmers. The factory, after its opening to fanfare on May 31, 2016, has been idle due to serious deficiencies in planning of the project and other financial, technical and legal challenges.