Komenda Factory On Its Knees

The Komenda Sugar Factory is expected to resume full production in October, this year when the major harvesting period for sugarcane spanning October to March begins per government’s announcement but information reaching this paper indicates that the factory is virtually on its knees.

The Ministry of Trade & Industry is now considering bids for the factory four months after it was inaugurated by President John Dramani Mahama.

The factory can crush 1,250 tons of raw sugar cane per day, implying an annual capacity to crush some 225,000 metric tons of sugarcane.

 

Bid for partnership

 

BUSINESS GUIDE has learnt that government is seeking 70 percent partnership in the form of huge capital injection in return for equity, which could offer investors access to management of the facility on day-to-day operations.

Also, management of the company, expected to employ at least 7,300 jobs directly and indirectly, intends to capitalize on the broad opportunity in the sugar industry but has not had the required quantum of investment to bring this about, officials have indicated.

 

Critics taunted

 

The Minority in Parliament held a press conference after the commissioning and criticized the premature commissioning of the facility but the Ministry of Trade & Industry, shortly hit back after news went round that the facility had shut down for maintenance.

“The speculation that the factory has been closed down for maintenance work is inaccurate. How can a factory that was recently commissioned be closed down? And for what purpose?”

“The Ministry of Trade and Industry wishes farmers to continue to sell their sugarcane to the factory and expect high yielding seedlings to be supplied when the irrigation project takes off.”

It stated that government was committed to the success of the factory, likewise the Indian government and that all measures were being taken to ensure it remained successful.

MoTI further stated that prior to its commissioning, a lot of farmers in 25 communities were identified as potential suppliers with the view to roping them into an out-grower scheme to be supplied with the appropriate seedlings to feed the factory.

“The factory has already started a nursery scheme within the land earmarked for the factory on about 125 acres of land.

The out growers will be introduced to new and better sugarcane seedling varieties, as well as best agronomic practices that will ultimately result in increased and sustained raw material to supply to the factory.”

 

Paper work

 

Furthermore, it said government, through the Ministry of Trade and Industry, had worked on a Sugar Policy and a Sugar Act over the past years, and these would be presented to Cabinet and Parliament soon to guide the entire sector based on lessons learnt.

A major instrument for managing the sector would be the establishment of a Sugar Development Board.

 

Background

 

In the 1980s, the lack of raw materials and financial constraints forced the factory to shut down until August 2014.

It was reconstructed with a $35 million concessional loan from the Indian government through the Export-Import Bank of India.

The country’s authorities at the time declared 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.

However, entrepreneurs and civil society groups sternly questioned the operational viability of the factory.

By Samuel Boadi

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