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Opinions of Sunday, 24 October 2021

Columnist: Major Mohamed Bogobiri (Rtd)

Open Letter to President Akufo-Addo on the operations of Komenda Sugar Factory

Signage at the Komenda Sugar Factory Signage at the Komenda Sugar Factory

Your Excellency President Nana Addo you invited us to be citizens which I may say constructive citizens and not spectators. Hence, it is for this reason that I consider the recent description by you (the Show boy) on matters on the Komenda Sugar Factory after 5 years as the Head of Government, Head of State and Commander-in-Chief of the Armed Forces of Ghana for that matter somebody with comprehensive Executive Power not a good one Sir, as my perspective or take would reveal at the tail end. Please pardon me for saying this assertion.

Mr President, before I postulate on the topic, it would be very important to say thatthe term Sugar factory is ambiguous, hence, need for clarification on sugarproduction series.

Sugar production series involves three distinct (standalone)operations, namely (a) the cultivation and harvesting of sugarcane or beetroots or sweet sorghum and transportation same to a Sugar Mill or Factory, (b) the treatment of sugarcane at Sugar Mill or Factoryinto raw sugar by washing, cutting or shredding followed by crushing or milling the sugar and the extraction of sugar syrup to be followed by clarification, evaporation, crystallization, centrifugation at the Sugar Mill or factoryand finally (c) factory or Plant processing of the raw sugar into refined sugar ready for human consumption , hence a third or distinct factory.

So Mr President, Sugarseries or processing (organization) involves theavailability and preparation of arable land, the planting/growing (agronomic practices) and harvesting of sugarcane which takes 10 to 15 months to mature, transportation of the harvested Sugarcane to a Sugarcane Millwithin 60 miles radius to avoid deterioration therefore not suitable for production ortreatment at a Sugarcane Processing Plant or factory to produce Raw Sugar for exportworldwide just like the export of raw cocoa or raw or unrefined gold or aluminum ingot for treatment at a Refinery worldwide. Mr President,the Sugarcane Mill(Factory) producing two main economic byproducts in the form of bagasse for generating power and molasses for the Alcohol Industry for distillation into gin and lastly waste or effluent discharge.

The Komenda Sugar Factory as planned by His Excellency ex-President Mahama was expected to have the three disntct components in Sugar production series namely

(a) cultivation, harvesting of sugar cane and the transporting of same to the Komenda Sugar Factory.

(b).Initial milling and extraction into Raw Sugar which is a distinct operation at a factory.

(c). The raw sugar is then transported by conveyor belt or appropriate means to a Separate Factory known as Sugar Refinery to refine the sugar into refined sugar. Hence the sugar Mill and Sugar Factory can be in two different (locations Countries or towns or cities etc based on comparative advantages.

The above narration therefore speaks of the Komenda Sugar Factory of havingSugar seriesofa combination ofthree distinct operations namely

(a) growing, harvesting of sugarcane and transporting same to the Sugarcane Milling Plant or Factory.

(b). the washing, shredding or cutting then crushing/milling and extraction of raw sugar and

(c). The refining of Raw Sugar by a Sugar Refinery or Plant or Factory into pure Sugar. Hence, these speaks volume that the Komenda Sugar Factory was not completed at the time it was commissioned in March 2016 by ex-President Mahama.

The constructing and commissioning of a Refinery at Komenda without availability of the raw material mainly raw sugar from an unavailable Sugar Mill otherwise imported and transported to Komenda with associated high risks of high cost and issue of marketing etc was not the best idea and therefore the Komenda Sugar Factory was built without critical thinking.

Mr President, many sugarcane mills or Factories operate only during the harvesting season, whereas refineries can work all year round depending on availability of Raw Sugar.

Hence, you were/are 100 percent right that the Komenda Sugar Factory was built and commissioned without a good planby Ex-President Mahama. But thanks to God for making you the President of Ghana dueto among others your laudable one district one factory policy.

So, Mr President, the Show boy, with your laudable one district one factory policy, it is unpardonable for your Administration taking donkey years to revive the Komenda Sugar Factory by getting an entrepreneur to use the readily available Refinery component of the Komenda Sugar Factory for refining imported raw sugar, so as to keep the system working and provide some jobs for a limited number of people and revenue in the form of tax especially VAT (a consumption tax) whilst putting up measures to operationalize the other components of the Sugarcane Mill Factory and the cultivation of the right sugarcane variety both are yet to be established.

Your Excellency President Nana Addo, it was reported in 2013 by the administration of ex-President Mahamathat Ghana imports over 200 million dollars worth of sugar annually.

Hence, the main or primary idea for the establishment of the Komenda Sugar Factory as in the better Ghana Agenda by His Excellency ex-President Mahama was to reverse this situation.

The issue of employments for over 7,000 people could be said to be a secondary reason or accrual benefit. Which should form part of your laudable one district one factory policy.

Hence, this paper is an attempt to conduct a simple risk assessment on Komenda Sugar Factory as planned by the ex-President Mahama’s Administration with his primary aim to reverse the situation of the huge expenditure of the importation of over 200 million dollars on sugar annually with the view to ascertaining whether the method use was sound and recommending the way forward.

Sir, pardon me for boring you that a Sugar Factory Company is like a Gold Mining Company since it also has the Crushing/Milling unit for milling the raw material of Sugarcane by the Milling Factory and the refining of the obtained raw material of Raw Sugar by a Refinery Factory into pure Sugar and stating that manysugarcane millsor Factoriesoperate only during the harvesting season, whereas refineries can work all year round depending on availability of Raw Sugar.

Your Excellency President Nana Addo, Sugarcane takes 10 to 15 months to mature after planting and it must reach theSugarcane Mill factory and process within 16hours after harvesting otherwise it will deteriorate or may not be suitable for factory production.

The quality of the sugarcane also counts and the best breed is the Komenda Sugarcane. So the out-growers or farmers must grow the right variety or breed.

The Komenda Sugar Factory has an operational cycle of 180 days with a maximum capacity of 1,250 tons of sugarcane per day, implying a requirement of 225,000.0 (180 x 1,250) tons of sugarcane per year. 100 tons of sugar can gives only 10 to 15 tons of raw sugar.

So, unless the farmers and the Komenda Sugar Factory use good hybrid and good agronomic practices to increase the reported yield of the farmers which is about 40tons per hectare to 70 to 80 tons per hectare thefarmers and the Komenda Sugar Factory can provide only 37,500 tons of raw sugar (225,000 x 100 divided by 15) in a year for the refinery thus the refinery will be idle for most of the time.

Mr President, it was reported that Ghana actually consumes or import over 300,000 metric tons of refined sugar every year from Sugar Refinery Factories worldwide and this was what the Better Ghana Agenda of the NDC Administration under ex-President Mahama’s wanted to reverse.

So, Mr President, to reverse the situation, 300,000 tons of refined sugar must be produced per year in Ghana. To do so, you need over 2,000,000 metric tons of sugarcane because 15 tons of raw sugar is obtained for every 100 tons of sugarcane processed by crushing, milling and the extraction of raw sugar in a Sugarcane Mill (factory).

Hence, based on the history of sugarcane production (tonnage and variety) in Ghana, the climatic requirements of sugarcane in the face of erratic climatic condition in Ghana of two rainy seasons (major and minor), land use or availability problem, and the lack of irrigation system to sustain production of sugarcane, there is no way that Ghana can produce 2,000,000 metric tons of sugarcane in one year to reverse the trend.

So, Mr President, if the reason for the Komenda Sugar Factory is for reversing the huge expenditure of over 200million dollars spent annually on the importation of sugar as required in the Better Ghana Agenda of the previous NDC regime, then based on the principle of comparative advantage, the best way was or is to establish a Sugar Refinery at Tema or Takoradi near the harbor for refining imported about 500,000 tons of raw sugar from Sugar mills worldwide and supplement with raw sugar from local sourceincluding the yet to be established Sugar mill at Komenda to produce raw sugar for the Refinery and the byproducts of molasses for local gin distillers and bagasse for power for the local area and the Mill.

Mr President, the yield of Sugarcane in Ghana is about 40 tons per hectare, hence the 225,000 tons of sugarcane per year for the Sugarcane Mill factory will require about 6,000 (225,000 divided by 40) hectares of arable land within reach of at most 70 miles radius. As part of contingency plan, theKomenda Sugar Factoryshould possess her own sugar Plantation and sugar Nursery project.

So, based on the crushing and milling capacity of the Komenda Sugar Factory, her in-house sugar Plantation shouldable to produce or provide sugarcane to sustain production for a minimum of 30days. This will entail 1,250 tons of Sugarcane per day x 30 days thus amounting to 37,500 tons of sugarcaneat its own (in-house) sugarcane plantation.

Hence, based on target of about 40 tons per hectare, the 37,500 tons of sugarcane for 30 days may require at least 938 hectares of arable land for sugar plantation by the Komenda Sugar Factory.

Unfortunately, the land of the old Komenda Sugar Factory built by ex-President Kwame Nkrumah has been encroached or trespassed since 1982, hence no sufficient acreage of free land closer to the factory for the establishment of sugarcane plantation and nursery (a must requirement for the survival of the project) and supplement this with supply from out-growers within 70 miles radius of the Mill of Komenda Sugar Factory, who must apply efficient agronomic management practices.

The above assessment speaks volume of likely inadequate raw material of sugarcane for the Mill factory of Komenda Sugar Factory, so there is no way that the Komenda Sugar Factory can achieve the desire aim as envisaged in the Better Ghana Agenda.

Hence, one can confidently declare that the Ex-President Mahama’s Administration missed the point with the establishment of the planned comprehensive Komenda Sugar Factory. There was no way the poorly established Komenda Sugar Factory if given 1000years or so can achieve the desired aim as in the Better Ghana Agenda.

The best way for reversing the situation should have been establishment of a sugar refinery which should depend on the supply of raw sugar from Sugarcane Mills(Factories) (locally or imported) and based on the principles of location theory, microeconomic theory, the sugar refinery must be built at Tema or Takoradi as a proximity to a Habour to reduce cost of production (transportation of imported raw sugar) and regular supply of power. Sweden for instance makes a lot of revenue in billions of dollars from the establishment of Cocoa Refineries (chocolate etc) than both what Ghana and Ivory Cost make fromproduction of cocoa.

His Excellency President Nana Addo you were initially voted into power in 2017to provide expected leadership through a better management of the National economy than the previous administration of ex-President Mahama. So you have the duty to rectify the mess now before December 2021.

Among other attractive and good or better national policies was and is your policy of one district one factory (1D1F) sold to and bought by the electorates in 2016. You were again voted into power thus given a second tenure of Office in 2020.

Hence, you are currently in your 5th year in executive power. Your 1DIF policy has two main option to change the narrative of what you termed the Guggisburg economy to help transform Ghana from dependence on Aid to Ghana beyond or without Aid andthe second vision is to provide employment for the citizenry.

Hence, your continuous dragging your feet in the reviving of the Komenda Sugar Factory does not auger well for your Administration. Mr President shine your eyes and push your Chef of Staff and the Minster of Trade and Industry into action now.

His Excellency President Nana Addo, bearing in mind of the location of the Komenda Sugar Factory which is very close to the sea or at the mercy of the vagaries of the weather so with your two main visions as stated above, you do need to waste more than two months in reviving the Komenda Sugar Factory.

The Komenda Sugar Factory has the potential of generating more factories or semi-industries in terms of cottage industries for the distilling of the local gin from the byproduct of molasses, hence additional jobs, adding about 3megawwatss of power to the national grid or local power consumption.

The Komenda Sugar Factory with good expertise, can become a huge benefit to the national economy as both a source of employment for the citizenry since it has the capacity to provide employment to over 100,000 people in the Upstreamin the production/harvesting of sugarcane and operations by factory operators, the Side stream/ Midstream mainly supplies of logistics and services including transporters or commercial car owners and operators including tricycle motor or Aboyaya etc operators, food vendors, personnel of utility services etc and above all generating to reducing the importation of sugar and huge generation of revenue in the form of taxes especially VAT etc.

Excellency President Nana Addoplease listen to Bob Marley’s Wake and Live so that as part of your 1DIF policy simply invite a strategic investors like Park Agrotech Ghana Ltd or a local business man or entrepreneur to run the business without dragging your feet on the matter.

So without waste of time handover the Komenda Sugar Factory to Park Agrotech Ghana Ltd to ensure the efficient operation and maintenance of the Komenda Sugar Factory before it becomes another story of Osagyefo Barge (the 125MW gas turbine electric Power which was located at Effasu) which the Ex-President Mahama’s Administration or National Security system woefully failed to give maximum protection and it became a scrap due to theft of some of the components of the Bargeby Policemen and others and other reasons which incidentally happened during the period of dumsor.

Yes it was under the International Arbitration Tribunal inTheHague with the contestants as Balkan Energy and the Government of Ghana but Ghana won the case in 2014 and the failure to make good use over 100 millions of dollars spent on the Barge was not acceptable.