Business News of 2014-03-03

Guinness Ghana to take over Ayensu Starch factory

The government is close to entering into a partnership with Guinness Ghana Breweries Limited (GGBL) for the takeover and revamp of the Ayensu Starch Factory.

The deal, which has been nurtured for the past year, is anticipated to be sealed in June this year on a public-private partnership basis.

As part of the transaction, the board of directors of the starch factory have been asked to work with the GGBL to “close the deal subject to all procurement processes of Ghana.”

Announcing this, the Minister of Trade and Industry, Mr Haruna Iddrisu, said “the essence of the deal is to boost the production of the Ayensu Starch Factory to significantly increase cassava yields and make the crop economically viable to farmers.”

Mr Iddrisu stated that after he and officials of various regulators of the beverage industry had toured the GGBL’s first ever spirits packaging and bottling line in Ghana and Africa.

Plant

The plant, which is christened the CUBE, blends and bottles GGBL’s first mainstream spirit, Gilbey’s Dry Gin.

The GH¢9.36 m packaging line consists of five shipping containers that are connected together to provide a stand-alone blending and bottling operation. The line, which is patented by Diageo plc, parent company of GGBL, is intended for various markets in Africa and Ghana is the lead market for this innovation.

Deal to be concluded

Mr Iddrisu stated that the government had had to delay its partnership with the GGBL for the revamp of the Ayensu Starch Factory because of the procurement requirement of Ghana.

“The government is, however, happy to conclude a relationship, especially because of the use of a locally produced raw material—cassava—in GGBL’s production.

“We need to encourage the production of cassava and add value to the crop, as is currently being done by the GGBL, instead of allowing the crop to get rotten,” he said.

He said the government will support the GGBL to develop and improve the value chain application of suppliers of cassava to make the crop economically viable for farmers.

GGBL commended

The Trade and Industry minister commended the GGBL on its production of various products from soft drinks to spirits.

“We believe that you are not only committed to growing the economy through employment generation and the discharge of your tax obligations but adding to value to local raw materials,” he said.

He also praised the GGBL for its financial and technical assistance to cassava growers who supplied cassava to the Ayensu Starch Factory.

“We believe that such support will bring the factory up to stream and subsequently enhance its operations and technology,” Mr Iddrisu said.

GGBL to utilise more raw materials

The Managing Director of the GGBL, Mr Peter Ndegwa, stated that the company had been operating in Ghana for the past 40 years with two factories in Accra and Kumasi.

Currently, he said the beverage company was using between 30 and 45 per cent of local raw materials such as sorghum, cassava and maize to produce a number of its products.

“As part of our innovative drive, we anticipate to increase the use of local materials to 50 per cent to produce quality products comparable to international standards,” he assured.