Business News Tue, 9 Jun 2015

Steel Industry to receive major boost

The steel manufacturing industry is to receive a major boost with the establishment of wire coils and sections manufacturing plant at Tema, to serve both the local market and West African sub-region.

The plant, a phase-two project of Sentuo Steel Limited costing about US$53million, is expected to add 500,000 metric tonnes annually to the company’s existing 300,000 metric tonnes of annual production capacity.

The amount was raised from shareholders of Sentuo: Fugian Overseas Chinese Industrial Group Corporation (FOCIGC) which owns a 74 percent shares, and the Social Security and National Insurance Trust (SSNIT) with 26 percent shares.

Mr. Ningqian Xu, Managing Director of Sentuo Steel Limited, told newsmen during a visit to its plant at the Tema Heavy Industrial Area, as part of a media tour, organised by the Chinese Embassy in Ghana.

Mr. Xu explained that the media tour was to highlight Chinese investments in Ghana over the past 55 years of bilateral relations, and said the phase-two project will be completed in about two months’ time.

Mr. Xu noted that the plant, expected to be completed in two months, will be the only one in the West African sub-region that manufactures products such as wire coils and sections like square pipe, steel round pipe, and angle steel among others.

He said Sentuo is fully poised to take advantage of emerging opportunities and challenges, while providing high-quality steel products and services to meet demand on the West African market.

Sentuo Steel currently manufactures reinforced iron rods for the Ghanaian market. With an annual installed capacity of 300,000 metric tonnes, the plant currently produces only about 40 percent of that capacity due to unavailability of enough ferrous scrap metal, its main raw material for production.

Mr. Xu said the company could not produce at full capacity because it cannot get enough scrap metal, despite the ban on exporting scrap metal, and has had to import some from countries such as Mali and Kenya.

Asked how it will feed its production in the second phase to produce enough for both the Ghanaian and West African markets, Mr. Xu said they will import steel billets from Europe and America.

He explained that this will not increase the prices of the finished products, since the cost of importing the raw material is cheaper that buying the scrap from local scrap dealers.

He reiterated the company’s commitment to Ghana, saying: “Ghana and China have a long-standing relationship; one of friendship and brotherliness," noting that Sentuo is interested first in supporting the local manufacturing industry in Ghana, despite current challenges in the economy.

Mr. Emmanuel Ayansu, General Manager and Consultant at Sentuo Steel, called on government to prefer value addition to fundamental raw materials, and do more to support companies that undertake such work.

He said -- in line with the company’s commitment to knowledge and skill transfer, Sentuo Steel’s Chinese investors are thinking of instituting a scholarship programme for Ghanaian employees to understudy the parent company in China.

He said the plant currently employs about 600 people, including 127 foreigners, and hopes to double that number when the second phase became operational.

Source: B&FT