Ailing Komenda Sugar Factory seeks urgent capital injection

General News of Friday, 2 September 2016

Source: GhanaWeb

2016-09-02

Dramani Inaugurates Komenda Sugar FactoryThe factory was commissioned in May, 2016

The ministry of trade and industry says it is considering bids for the revived Komenda Sugar Factory, after four months of operations.

Government is seeking huge capital injection in return for equity, which could allow investors to manage the day-to-day operations of the factory.

Sources say the factory is on its knees and requires rapid capital injection to avoid liquidation.

Further investment would enhance the factory’s ability to capitalize on the broad opportunity in the sugar industry, officials have said.

Lack of raw materials and financial constraints forced the closure of the factory in the 1980s and reconstructed in August 2014 with $35 million concessional loan from the Indian government through the Export – Import Bank of India.

Government, at the time, announced it was securing an additional $24.5 million from the Indian government to construct irrigation dams and plantations as well as seed capital to out growers to plant sugarcanes.

But the reconstruct of the factory was heavily criticized by entrepreneurs and civil society groups, who strenuously questioned the operational viability of the factory.

President Mahama said during the inauguration the Komenda Factory was to save the nation millions of dollars used to import sugar into the country, and that revamping of the factory was part of government’s agenda of transforming the country by producing the products that the country had comparative advantage in.

It was expected to employ at least 7,300 jobs directly and indirectly.

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