Calls to review sugar processing industry strategy valid - GIPC

The Ghana Investment Promotion Centre (GIPC) has responded to the call for a review of its backward integration strategy in the development of the sustainable sugar processing industry in the country.

The strategy involves an initial importation of raw sugar from other countries whilst plans are made to develop the capacity of local farmers to cultivate enough to feed the processing plants to be established here.

Agricultural Economist, Dr. Abu Sakara has been advocating a review prior to the finalization of an agreement with Cargill Limited to set up a 100 million dollar sugar-processing plant with a capacity of 450 thousand metric tonnes per annum.

According to him, it is imperative for government to consider re-evaluating all the investment concessions of the project to avert the collapse of the associated downstream job-sector as result of unfair competition.

The Chief Executive of the GIPC, George Aboagye however told CITI BUSINESS such local-content concerns have already been considered and this includes several related aspects such as Labour and utility services.

“We like the idea and it is nice but the local content is many things, the electricity they purchase, the water they use, the labour they employ and all the things that they will purchase or adopt within the economy forms part of local content and a factory or processing plant of this nature obviously is going to have a whole assortment of local content and therefore this particular operation is not going to be under free zones.” He assured.

“I believe that they will meet the local content requirement even for the purposes of being able to export into the other ECOWAS countries without putting together a program that ensures the application of local content within our economy. They cannot even export under the ECOWAS trade liberalizations scheme.” He noted.

Dr. Abu Sakara also questioned the citing of the plant planned for the Tema Port arguing that the factors considered in the value chain of sugar processing go beyond the importation of raw materials.

Mr. Aboagye however defended this position as the most expedient due to the peculiar nature of the project.

According to him, “the citing will be around the Port because it is not a composite arrangement whereby there is a plantation and therefore the plantation should crash the sugar on the plantation so you have a plant and then after you have crashed the sugar, then you want to refine which should be near the port of exit so citing industries could be at the Port because you need to get your raw materials into process or to export. It could be on the farm far away or near a transportation terminal point, railway lines or highway.”

source: citifmonline