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PRESS RELEASE - Update on KOMENDA sugar factory

The Komenda Sugar Factory was commissioned by His Excellence, President John Mahama on Monday 30th May, 2016. Following its commissioning, there has been a considerable amount of media commentary and speculation about the various aspects of the factory’s operations. This statement seeks to provide the necessary facts.The factory was established with a USD35million concessional loan from the Indian government through the Export Import Bank of India.

The capacity of the plant is 1,250 tons crushing per day (TCD) of raw sugar cane, implying an annual capacity to crush some 225,000 metric tons of sugar cane per year.

The raw material required to feed the factory is sugar cane. Prior to its commissioning, a lot of farmers in 25 communities were identified as potential suppliers with the view to rope them into an out-grower scheme to be supplied with the appropriate seedlings to feed the factory.  Currently, sugarcane cultivation takes place in an uncoordinated form and the produce is mainly utilized by manufacturers of local alcoholic beverage especially akpeteshie.

Generally, the yield of sugarcane in the Central and Western Regions is good. With the coming-up of the new sugar factory in Komenda an irrigation scheme for sugarcane cultivation will  be undertaken with an additional USD24.5 million loan from the Indian Exim Bank under the Indian government supported line of credit.

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.

The choice to develop the irrigation scheme and sugarcane plantation in Komenda is informed by the siting of the new sugar factory as well as the agro-climatic suitability of the area for sugarcane cultivation. The development of a sugar cane plantation with an irrigation facility is targeted at an estimated irrigable area of 3,000 acres, which the sugar company should own. Out-growers may supply sugarcane from an additional 5,000-7,000 acres within the catchment areas of up to six hours drive or 100 kilometers from the factory.

In order to ensure sustained supply of raw materials to feed the factory, an out-grower scheme will be developed and farmers supplied with high yielding planting materials for cultivation. The factory itself will develop an irrigation and plantation scheme with a $24.5 million credit from the Indian Government.

The initial arrangement to buy the sugarcane from farmers at GHC60 per ton was later improved to GHC80-GHC90, as local distillers also increased their purchase price of sugar cane to the farmers. The price issue invariably delayed or held-up the supply of some of the sugarcane to the factory. Negotiations were held with the farmers and an amount of GH90 per ton was agreed at the farm gate.  Following this new arrangement, the farmers have started selling their sugarcane to the factory.

The factory has been operating after the resolution of the issue on pricing with the farmers. The process of operating the sugar factory involves the preparation of firewood to fire the boiler to form and raise the temperature of steam.

A team is currently going round to the farmers to buy sugarcane at the farm gate. It must however be emphasized that, the factory was completed six months ahead of time. Since we lacked the local capacity to operate the factory, the Indian contractors have agreed to train Ghanaians on the operations of the factory.

The factory is now in a piloting and testing stage where calibration of the machines and equipment is taking place.  The factory is expected to be shut down sometime in late June and will resume full production in October/November when the major harvesting period for sugar cane of October-March begins.

The Government is committed to the success of the factory, likewise the Indian Government, and all measures are being taken to ensure that.

The government through the Ministry of Trade and Industry has worked on a Sugar Policy and a Sugar Act over the past years, and these will 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

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 sugar cane to the factory and expect high yielding seedlings to be supplied when the irrigation project takes off.