New investor takes over Komenda Sugar Factory

The Komenda Sugar Factory has been handed over to a Strategic Investor called Park Aggrotech Company Limited, an Indian company based in Ghana and a subsidiary of the Skylark Group of companies, which won the bid to manage the factory.

The Ghana-based company is set to inject $28 million into the factory between 2020 and 2023.

Park Agrotech, which emerged as the successful bidder after a rigorous selection process conducted by the accounting and advisory firm, PricewaterhouseCoopers (PwC), is expected to invest $11 million of the amount into sugarcane cultivation, $6 million to upgrade plant and machinery and $11million as working capital to bring the ailing factory back on its feet.

A total of 15 companies expressed interest in the factory, out of which five submitted bids to become the strategic partner.

The STM Project Limited, a company renowned for sugarcane development and sugar plant modernisation, expansion and rehabilitation for more than 200 sugar factories in India and other parts of the world, will serve as the technical partner, with technical support from the University of Cape Coast.

Industry anchor

Mr Nimo noted that sugar was a strategic anchor industry which enabled companies to produce ethanol, and also served as raw material for industry, saying although the importation of sugar was rising, “we were unable to produce sugar”.

He said the factory was an opportunity for the investor and the community to work together to ensure the sustainable production of sugar to reduce the importation of sugar.

Speaking on behalf of the transaction advisors, Mr Ashiagbor said before Park Agrotech was recommended, a team from Ghana was sent to India to do due diligence.

“Having satisfied ourselves of their capabilities, we recommended them for the government’s consideration that they be selected as the preferred bidder. The government reviewed the work that we had done and gave approval for Park Agrotech to be engaged as the strategic investor for the Komenda Sugar Development Factory,” he said.

“We have negotiated and completed the fine-tuning of the agreement that Park Agrotech will execute,” he added.

Mr Ashiagbor added that although the agreement would need to go for certain approvals, as well as the meeting of some conditions precedent, “we are comfortable enough to let you know that Park Agrotech will deliver this project satisfactorily and, therefore, they are in the process today undertaking further inspection to understand what needs to take place from here”.

“So they, essentially, hit the ground running, while we finalise the nitty gritty of the agreement,” he said.

‘We’ve the expertise’

For his part, Mr Kumar said the company was excited to take over the factory and work to ensure that it became useful to the community and the country.

He commended the evaluation committee for its transparency and expressed the hope to start work soon, adding: “In the near future, Ghana will produce all the sugar it needs for consumption and even for export.”

Background

In 2016, the government secured a $35-million Export-Import (EXIM) Bank of India loan to set up the Komenda Sugar Factory.

An additional $24 million was set aside to support outgrower farmers.

The factory was inaugurated on May 31, 2016, amid pomp and ceremony, to produce sugar, but it became stillborn due to a multiplicity of factors that were described as “technical and operational challenges”.

For the past three years, the factory has been left to deteriorate.

While addressing a durbar of the chiefs and the people of Komenda on September 14, last year, President Nana Addo Dankwa Akufo-Addo gave an assurance that the government was in the process of getting a strategic investor to revive the factory.