No dividend for Aluworks shareholders

Shareholders of Aluworks, yesterday, unhappily walked out of the Fiesta Royal Hotel in Accra, after the Board of Directors of the company announced they would not be entitled to dividends for the 2007 financial year as the company was experiencing deep financial and operational crises.

The Board of Directors cited the unstable conditions in the country's manufacturing sector, high cost of production, the energy crises, high cost of imported materials and the shutting down of Valco smelting plant which used to serve the company with refined materials, as the main challenges that have hindered its success in the stipulated financial year.

Even though the company recorded a turnover of about GH¢52 million, a 6% increase against the previous year's record of GH¢49 million, the gains were overshadowed by what officials termed high operational cost.

The company, for the first time in 15 years, recorded a loss of GH¢4.40million cedis out of which GH¢1.81million was used for a redundancy exercise to promote efficient and cost effective operations. As part of the redundancy exercise, some 88 workers of the company were relieved of their posts to save the company from generating more operational losses.

The Managing Director of the company, Emmanuel Sarkodie, in an interview with The Statesman, assured that in spite of the severe challenges experienced last year they were likely to make amends in the 2008 fiscal year and further generate enough profit to expand their scope of operation.

However, these challenges are temporary and could never force the closure of the company due to the enormous demand for aluminum products in the 21st century. This, he said, gives much hope for capacity and operational build ups for continuous attainment of operational success.

Already, some "painful" measures aimed at sustaining their operation, reducing cost of production and creating value addition for profitability had already been taken and hoped those measures would go a long way to improve their performance in the open market, he told this paper.

He noted that the importation of inferior aluminum products from China and India has made the local market in which it supplies 60% of its produce unfavourable and called on government to intervene to save the situation.

The Board Chairman of the company, William Ekroo Inkumsah, at the Annual General Meeting said notwithstanding the disappointing results for the year under review, they would continue with their coil coating line and the second Cold Mill projects to help the company to increase its production and sales tonnages so as to improve gains.

The chairman lamented that the fiscal policy in the country in its present state has been favouring the importation of semi finished aluminum materials such as coils and disc from China and India.

He said based on this, the management of Aluworks in consultation with the Association of Ghana Industries has submitted a letter to the Ministry of Trade and Industry to lobby government to effect a policy change to favour local manufacturing industries in the country.

As part of the proposal, Aluworks also requested government to remove the 5% tariff on primary aluminum ingots it imports. He said as a result, government has initiated the formation of a Tariff Advisory Board to recommend new tariffs which will aim at addressing unfair trade practices.