Jospong group fights gov’t over Ayensu Starch factory
The Minister-Designate for Trade and Industry, Mr Alan Kwadwo Kyerematen has revealed why the Ayensu Starch Factory has not been in operation.
Speaking at his vetting in parliament last Friday, Mr Kyerematen indicated to the Appointments Committee that there is litigation over the factory, between the government and Tiberias Company Limited, a subsidiary of the Jospong Group, thereby making it difficult for the company to operate.
Explaining how the two parties landed in court, the Minister-Designate narrated that 70% shares of the Ayensu Starch company was offered to Tiberias in August 2015 at a bid price of $4,450,000m and as a condition for a 70% shareholder, Tiberias was supposed to pay 50% of the share price of which they did comply. He said that the company made an initial payment of $2, 269,000, representing 51% of the shares.
But, according to the Minister-Designate, there was a requirement in the Sales and Purchase agreement for Zoomlion to complete the payment of the outstanding money to be able to have full control of the 70% shares, which it did not, yet the factory was handed over to it.
Mr Kyerematen indicated that by the time the New Patriotic Party government came to office in 2017, the factory was no longer operational for a number of reasons and Tiberias had still not paid the balance of 20% to have full ownership of the factory.
“So we engaged PricewaterhouseCoopers, a financial adviser, to see how they can have an amicable resolution. However, the money has still not been paid.”
The Minister continued that, according to the provisions of the Sales and Purchase agreement, Tiberias was supposed to pay back a certain percentage of the shares to the government.
He said they (government) wrote to the company and subsequently, the government became the majority shareholder.
He said government found out that Tiberias was unable to pay it workers for some time and it was compelled to pay outstanding salaries from September 2017 to December 2019, in order to prevent chaos, since it had a majority share in the company.
The Trade Minister-Designate said that Tiberias subsequently abandoned the factory and government requested for security to ensure that there was no interference with the factory. However, along the line, Tiberias filed a writ of injunction against the government to prevent them from interfering with the company, hence the inability to operationalise the factory.
The nominee noted it is regrettable that the factory is not working, but once the court order is vacated, the government will find a lasting solution to the problem.
About Ayensu Starch Factory
Ayensu Starch Company Ltd. is a wholly owned Ghanaian company incorporated as a limited liability company under the Companies Act of Ghana, with its business headquarters located at Bawjiase in the Central Region.
It was commissioned in 2004 and it operates at full capacity of around 22,000 metric tons of cassava starch per annum.
The company produces native cassava starch (super High Grade) and supplies to various industries for finished product. It three major activities are Cassava cultivation, Processing of Cassava into Industrial Starch and export of Cassava Starch as an industrial and food product.
Updates on Komenda Sugar Factory
Just like the Starch Factory, the Komenda Sugar Factory has also not been in operation for a while.
Lawyer Francis Xavier Sosu, MP for Madina and a member of the Appointments Committee quizzed the minister for an update on the factory.
Mr Kyerematen, in his response, indicated that the Komenda Sugar factory, which was commissioned on May 30, 2016 but was never operationalised until the time the Akufo-Addo led administration took over.
He indicated that in October 2017, an audit was conducted and it was indicated in the report that a full test run was never completed before the commissioning.
“Also, a number of critical parts of the factory had not been installed. For instance, there should be a crushing plant for crushing the sugarcane. There should also be a vertical and horizontal crystallizer and it is only when these components are in place that one can produce white sugar”.
The Minister said at the time of the commissioning, only the horizontal crystallizer was in place, hence producing white sugar was not possible. He said it could only produce brown sugar.
The Minister stated that in order to ensure the factory is operationalised, a re-evaluation and a forensic audit have been conducted and the Sugar factory has been handed over to Agrotech.
He said if not for the Covid-19 pandemic, work would have commenced at the factory and he assured the committee that the factory will become operational soon.