Phyllis D. Osabutey
16 January 2006
SOME MANUFACTURERS in the aluminium industry have since the re-opening of Volta Aluminium Company Limited (VALCO) raised concerns over the high cost of raw materials for the production of aluminium products in the country.
According to those who spoke to The Chronicle, the importation of raw materials from countries, such as Nigeria, South Africa and Belgium, among others, was more profitable than buying raw materials from Aluworks Limited.
They attributed this to the fact that one virtually risked producing at a loss when one purchased raw materials from Aluworks, who got their supplies from VALCO, due to the high cost of their raw materials.
This, they noted, was making it impossible for them, particularly small scale producers, to buy and produce on a large scale so as to sell at affordable prices and make reasonable profit.
Though they all admitted to The Chronicle that the raw materials from Aluworks were of a superior quality compared to all the imported ones, they stressed that under the present circumstance, it was better to import rather than buy from the local company.
The Managing Director of Ankod Construction Limited, Mr. Andrew Kufuor, told this paper that the reopening of VALCO has not been useful to Ghanaian businessmen in the aluminium industry.
He explained that most of them expected that with the reopening of VALCO, getting raw materials locally from Aluworks would have been much easier and cheaper for their businesses to thrive and impact positively on the economy.
"To our surprise, it has been the other way round and this is making production difficult for the local businessman. As far as we are concerned, VALCO may as well not have been opened," he said, adding, "this clearly shows that the Golden Age Of Business is a mirage."
According to Mr. Kufuor, at present, Aluworks has fixed the minimum quota of aluminium coils one could purchase at three-tonnes, with each costing about ˘33 million. This means the least purchase one could make is ˘99 million.
He expressed concern that "small scale producers cannot afford it and the price has compelled even those who can afford it to import so as to maximize profit."
He further explained that one-tonne of aluminium coil could produce 16 packets and 18 pieces of roofing sheets, of which one packet sold at about ˘2,120,000,00, adding that this represents a high cost of production that results in a loss.
Mr. Kufuor, who is a manufacturer of galvanized iron sheets and aluminium, intimated that the machine he purchased at the cost of ˘500,000,000 about a year ago to produce aluminium sheets was still lying idle, saying, "since I set up the machine, I have not been able to produce even one packet of roofing sheets."
According to him, "now I have 40 workers, including those I employed earlier to operate the machine and I might even employ about 10 more when I start production."
He indicated that most businessmen who produced roofing sheets and other aluminium products have now stopped production or were heavily importing raw materials, and added that he was also in the process of sourcing materials from South Africa to enable him to start production.
According to him, it was unfortunate that government has remained unconcerned about the influx of all manner of people who called themselves businessmen and were flooding the local market with shoddy goods.
"We do not know whether they are investors or petty traders. They have set up shops in all corners and are killing the indigenous industry," he said, and added that if nothing is done to reverse the current situation, Aluworks, as well as the Ghanaian economy, would be at the losing end to the benefit of foreigners.
On his part, the Managing Director of Rocksters Limited, producer of aluminium roofing sheets, Mr. Alfred Kwadwo Danquah, noted that though it was less expensive to import than buying from Aluworks, the latter's raw material was of a better quality.
He said, considering the length of time and inconveniences involved in importation, it was easier to buy from Aluworks.
According to him, since Aluworks had increased and improved upon its production, it was important to make prices affordable for all, particularly local businessmen, to enable them to benefit from their businesses.
This, he stressed, would go a long way to impact positively on the economy.
He pointed out that it was important to offer Aluworks encouragement, as well as criticize them constructively, to enable them to improve upon their production and also make their products competitive for both local and international markets.
In conclusion, he called on government to assist Aluworks in their operations to help improve the industry for vibrant competition with the international industry.
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