You are here: HomeBusiness2004 05 22Article 58329

Business News of Saturday, 22 May 2004

Source: --

Aluworks Count Cost Of VALCO Closure

Aluworks, an aluminum manufacturing company, has been counting the cost of the closure of VALCO on its operations. According to Aluworks the closure of the aluminum smelter, which supplied its raw materials has led to a fall in its production compared to year 2002 despite its new increased capacity.

The chairman of the board of Aluworks, William Inkumsah, disclosed this the 17th annual general meeting of the company in Accra. He however added that despite this challenge Aluworks managed to end the year with a modest profit.

The AGM, was organised a day after the re-opening of the company, which was closed down for almost two weeks. At the meeting issues affecting the company were addressed. One of the issues that took centre stage at the AGM was the effect of the closure of their raw material supplier, VALCO.

The Board chairman of the company, Mr. Inkumsah said it took Aluworks 6 months to arrange for constant supply of aluminum ingots from BHP Billiton based in South Africa.

But although this deal has been affirmed, Mr Inkumsah said the company?s operating cost has increased significantly since they now have to import their raw materials, which hitherto were bought at favourable terms from VALCO located close to Aluworks

This, notwithstanding, the company declared a dividend of 400 cedis per share and has in recent months enjoyed some significant gains on the stock market. The chairman told the shareholders that the company is embarking on a cost reduction exercise to increase its profitability. He added that the company is working towards increasing its market share in West Africa.

Aluworks recorded an operating profit of 25.4 billion cedis, 34 percent lower than that of 2002. Net profit was also 37 percent lower at 18.4 billion cedis.