Revival of Komenda Sugar Production Series, Kudos to the current Minister for Trade and Industries

Sugar Production Series like large scale mining project is a multi-dollar project. Thanks to Digitization, Digitalization processes and Globalization for helping greatly to move wealth through Foreign Direct Investment across the globe from areas it carries some weight to areas of investment drive in order to generate more wealth, employment, and inclusive development as required in the Sugar and Mining Industries. For the success of these enumerated processes, there is the need for full collaboration with relevant Stakeholders for sustainable and inclusive development.

It is therefore heartwarming that Alhaji Tahiru Hammond, the current Ghana’s Minister of Trade and Industry is working very hard to get the State of Ghana to collaborate with a strategic investor namely West Africa Agro Ltd in order to put the wrongly located and inoperative Sugar Refinery component of the Komenda Sugar Production Series (made of three Standalone Units) into effective production of edible sugar and the byproduct of molasses and ethanol etc.

It is anticipated this method would ensure returns to investment, provide jobs (reduce the exportation of jobs through importation of sugar etc) and above all meet the Nation’s objective of reducing the huge amount of foreign currency spent on importation of sugar, thus working towards putting in place a good import substitution policy.

Before, I digress on the subject, let me make a declaration that this submission is neither about the cacophonous NDC and NPP politics nor meant to malign anyone but to lay open the facts on Sugar Industry in general and the issues on the Komenda Sugar Production Series with the view to recommending measures for gaining massive support nationwide for making the Sugar Refinery company effectively productive despite its teething problems. It may also serve as a guide for future undertakings in the Agroindustry to ensure value for money.

So, I hereby give thumb up to the Minister of Trade and Industry for the route or plan being adopted by him to make the Komenda Sugar Production Series which unfortunately was made at go to contain in the same location or enclave the three Standalones industries made of a Downstream Industry or level mainly a Sugar Refinery which needs raw sugar as its raw material and the Upstream Industry made of the Sugar Mill and the associated Plantation or the value chain for the supply of raw material either sugarcane or sugar beet.

For economic reasons, it was very wrong for the collocating the two processing units namely the Down Stream Industry or echelons which is capable working 24/7 or all year round depending on Market and availability of raw material of its and an Upstream Industry or echelon which works less than 360 days with the Komenda Sugar Mill subject to availability of sugarcane feed is to work for 180days operation cycle but as stated the Sugar Refinery can work almost 360 days with limited maintenance and servicing days and thus become inoperative during the servicing and maintenance days.

It must be noted that the principle of backward integration as applicable in the agroindustry means that for the Sugar Industry, the Refinery herein Sugar Refinery as a Downstream Industry or level to be fed with cheap raw sugar from global sources and later on merges with or acquires raw material suppliers in the Upstream Industry or Industries which is made up of the Sugar Mill(s) and associated Sugarcane Plantation for production of cheaper raw material for the Refinery based on off taker agreement and sugar policy.

So, the current Minister should be applauded for an excellent route in the Sugar Industry. This may ensure sustainability sugar production and efficient use of the Sugar Refinery component in 24hour economy 24/7, considering that Sugarcane growth takes at least 10 months to mature, the availability of raw material of sugarcane for the Sugar Mill Industry depends on several factors including soil condition, the climate, pest, agronomic or cultural practices including fertilizer application, Pest control, water management (note river Pra as source of water within the Komenda Catchment is polluted by illegal miners, this may result in the shutdown of production or additional cost on treatment of the water) , and may make imported raw sugar at a lower cost and safer to be preferable.

It must be emphasized that the location of the downstream Industry that is the Sugar Refinery must be such that it can leverage the advantages of location of industries to its benefits and as much as possible enjoy proximity to a port as a consideration for cheaper export of excess products or importation of needy items including cheap raw sugar as and when necessary.

So let us support the Minister’s adoption of an initial depending on regular supply of imported raw sugar for production at the Komenda Sugar Refinery Unit, for it to make a good name as Komenda Sugar, likewise the economic byproduct of Molasses as Komenda Molasses and the Ethanol as Komenda or Ghana Ethanol which is needed by the EU countries or may be used as fuel for vehicles instead of the costly petrol.

The route the Minister is recommending if adopted and the Sugar Refinery is operating, it would then trigger the application of backward integration with the Upstream Industry by a nationalistic collaborative effort by all relevant stakeholders in the Sugar Industry especially the sugarcane farmers within the catchment areas of the operators of the installed Sugar Mill, the Sugar Mill as well as the operators of the Refinery Unit.

Other relevant Stakeholders include importers of sugar or traders in sugar in Ghana, the Government of the day, and consumers of sugar at all levels be it domestic, industrial and pharmaceutical and users of the byproduct of molasses and ethanol. This collaborative effort by the Stakeholders will help the Government to come out with a sound national sugar policy.

It must be emphasized that use of locally produced raw sugar by the Sugar Mill and the associated sugar farms to feed the Sugar Refinery is sine qua non to reduce cost of production and help conserve foreign currency. So a sound national sugar policy could trigger the application of the Principle of Backward Integration by the Sugar Refinery component of the Sugar through production Series by merging or acquiring Sugar Mills and promotion of massive local production of sugarcane to feed Sugar Mill(s) for production of enough local raw sugar feed for the Sugar Refinery.

Folks, when a patient reports to a medical doctor for treatment of an ailment, the Medical Doctor carries out diagnosis of the ailment for the associated problems before coming out with the remedies for the aliment. So let me attempt to carry out some diagnosis of the problems of the Komenda Sugar Factory especially the Refinery with the view to gaining massive support for the recommended remedies to ensure the good use of the project.

First of all, let me say that Sugarcane belongs to the grass family and it is one of the C4 Plants, hence involved in carbon fixation, using carbon dioxide to form sugar compound etc and like any other crop Sugarcane also needs good cultural or agronomic practices.

Report have it that three varieties namely Alata Sugar cane, C1000 and the factory preferred Komenda Sugarcane coded as B41227 are the sugarcane planting material common in Ghana. That planting time is March to April for major season and minor season planting time is from October to December and depending on the soil condition, cultural or agronomic practices, it take 10 to 12 months to mature.

So depending on the variety and the climatic conditions as well as cultural practices, it is harvested after 10 to 12 months of growth. For Sugarcane for a Sugar Refinery, the sugarcane variety must be of the high quality type with high brix content and early maturing to ensure available raw sugar for the factory to facilitate the Sugar Refinery to enjoy raw material for 24/7 or year round production.

The production of Sugar and the byproduct of molasses and ethanol for domestic, industrial and pharmaceutical consumption involves three productive stages. Firstly, the establishment of sugar Plantation and harvesting of the matured Sugar Cane to feed the next stages which of processing which starts with Crushing and Milling of the harvested sugarcane by a Sugar Mill to produce good Raw Sugar for the next processing stage of refining by Sugar Refinery into the consumable product as Sugar and the valuable byproduct of ethanol (as the final products).

These three stages made of Sugar Plantation, Sugar Mill and Sugar Refinery are regarded as three standalone Projects which can therefore be located at three different locations based on comparative advantage and need to ensure effective and efficient production and for the factory to gain benefits of the advantages of location of industries, the location of the Sugar Refinery is very important. Once again let me say that the Sugar Industry consist of two processing units namely the Upstream and its value chain and the Downstream and its value chain.

A Sugar Refinery can be located thousands of miles away from the other two Standalone units and if possible be put in an area that would make it to enjoy the advantages of location of industries and if possible near a port to help in exportation of excess products of refined sugar and ethanol at lesser cost Furthermore, for the Refinery to enjoy lower cost in importation of needy items including raw sugar in case of shortfall in local production of sugar cane for it to get locally produced raw sugar.

On the other hand, the other two Standalones, namely the Sugar Plantation and Sugar Mill, to ensure an effective and efficient production of raw sugar, requires the Sugar Mill to be within 40 miles radius to the .Sugar Plantation for the Sugar Mill to receive cheap raw sugarcane in a lesser deteriorated state after harvesting. Note crushing and milling need to be done within 17hours. So harvesting of the sugarcane for the Sugar ill should be done in a timely and quota manner allotted to suppliers.

The three standalone productions units may be collocated if there is sufficient land which is free or available for the production of the right sugar cane to feed the Sugar Refinery. As recommended by the Brazilians in 2008 and the Mauritians in 2013 for Sugar production series at Savelegu in the North East Region due to massive available arable land with associated potential to be irrigated from River Daka, a tribute of the River Volta.

Let me once again say that the Sugar Refinery must be located at an advantageous location so that it can receive cheap raw material in the form of raw Sugar globally thus thousands of miles radius or 360 degrees globally away from it but the Sugar Mill must be located within 40 miles radius from the Sugar farms for efficient production. This is so, to reduce cost on conveying bulky load of sugar cane and above all mitigate the deterioration effect of sugar cane juice with time. The 40 miles radius is to ensure sugarcane is crushed and milled within 17hours to ensure quality material for processing.

So, normally a Sugar Refinery is established near a port to receive cheap raw sugar from Sugar Mills or Raw Sugar Market globally if the need arises and with time the owner applies the principle of backward integration to merge with or acquire own Sugar Mills especially those established with adequate irrigable land or capable of establishing own massive Sugar Plantation with nursery unit. As well as be in the position to provide easy support to outgrowers and lastly establish and monitor off taker agreements with the Outgrowers to ensure adequate feed of the correct quality or variety for the sustainability of the Sugar Refinery operations otherwise depend on imported raw sugar for 24 hours production contingent on market demand .

Reports indicated that 128.68 million dollars is needed to cultivate 10,000 hectares of sugar cane plantation, to crush and mill into raw sugar and to refine the raw sugar into finished sugar etc. The breakdown as follows 120millon dollars for the cultivation of 10,000 hectares of sugarcane, milling at 7.804 million dollars and 878, 000 dollars for refining into final sugar or ethanol.

These details tells that a greater part of the expenditure in Sugar Production Series involving the three Standalones goes into the Sugar Plantation Unit which is the riskiest of the three since human factor (choice of variety, issue of competency, activities of illegal miners, bush fire) soil condition, climatic and environmental factors may destroy the farm or reduce yields. The next costly unit is the Crushing, Milling, Clarification, Extraction of Sugar Juice and Crystallization of the Sugar Juice into raw sugar by the Sugar Mill.

Sugar Refining in a Sugar Refinery is the cheapest of the three Standalone Units and is also the most profitable unit due to value addition and availability of cheap raw material (rural sugar) globally for all year round production. Hence, consideration for global source of raw sugar must be factored in the plan. That is why we should applaud the good plan by Alhaji Tahiru Hammond and also why I say the Sugar Refinery at the Downstream echelon should have been established around Tema so as to obtain imported cheap raw sugar from Countries with better comparative advantage as and when necessary to ensure sustainability of operation.

Enter the Komenda Sugar Production Sugar Series.

This submission will for the first time provide the details or facts on the Komenda Sugar Series which were not fully provided since its inception .The Komenda Sugar Production Series when in full capacity in its operations is expected to provide not less than 7,300 direct and indirect jobs in the value chain. It requires a warehouse capable of taking not less than 5,000 tones jumbo bags capacity for storage of raw sugar.

The Komenda Sugar Production Series, currently consist of only the two processing units of a Sugar Mill and a Sugar Refinery yet to be granted certification by EPA. The Sugar Plantation unit is yet to be developed or formalized with the correct variety with high brix content and early maturing variety to provide the raw material for the Sugar Mill and virtually the raw material for the Sugar Refinery.

Komenda Sugar Mill
The old Komenda Sugar Mill which was installed in 1965 by President Dr Nkrumah had a capacity of crushing and milling sugarcane at 1,000 metric tons of sugarcane per day within 160 productions or operational days cycle. Thus it was expected to crush and mill 160,000 tons (1000 metric tons per day x 160 days) of sugar cane per year. The old Sugar Mill had 10 percent recovery rate. Sugar recovery from sugar cane is the ratio between sugar produced against sugarcane crushed that is sugar produced per metric tonnes of sugar cane and it is expressed in percentage and ranges from 10 to 12 percent.

So using the 10 percent recovery rate, the Sugar Mill of Dr Nkrumah’s with an expectation to crush and mill 160.000 tons of sugarcane was to provide 16,000 tons of raw sugar. Unfortunately, the despite the well-developed sugar cooperative farmers in those days and use of good sugarcane hybrid as Komenda B41227 plus availability of massive arable land for sugarcane plantation those days, the old Sugar Mill of 1000 metric ton per day could not get enough sugarcane feed for this small Sugar Mill due to reported lower yield of sugar cane in Ghana at 30tons per hectare due to the soil and weather condition.

The new Sugar Mill has the capacity to crush and mill sugarcane at 1,250 metric tons of sugarcane per day and is to do so for 180 days in a year. So in year, the Sugar Mill is expected crush and mill 1,250 metric tons per day x 180 days to produce an expected 225,000 metric tons of crushable sugarcane with recovery rate of 10 percent, so this Mill at full crushing capacity would give 22,500 tons of raw sugar.

2016 Report from FAO confirmed the average yield of sugarcane at the area as 30 tons per hectare. But let me be magnanimous (charitable) by saying that 53 metric tons per hectare may be possible as claimed by some local farmers in the enclave of Komenda . This means that a minimum of 4,245 hectares of land within radius of 40miles to the Sugar Mill is required to produce 225,000 metric tons divided by 53 metric tons per hectare.

Unfortunately, the Sugar Plantation to feed the Sugar Mill is competing with the other factors of productions especially uses of the Land. Labour and Capital within the Central Region or the catchment area of the Komenda Sugar Factory. Due to the good work of the Koreans promoting massive rice production, others are into Tree development with Oil Palm, Citrus, etc as well the production of maize not talking about activities of illegal miners and building or estate developers, all them working with the limited land.

Research by Mr David Yawson, Mr Michael Adu, Mr Kingsley Osei of Cape Coast University in their submission termed as Spatial Assessment of sugar cane production to feed the Komenda Sugar Factory (Google for it) indicated that the Sugar Mill may suffer sugar feed deficit due to low yield and problem of no much arable land within the 40miles radius as ideal for production of sugar cane for a Sugar Mill.

The Report indicated that the total sugarcane production in Ghana by 2016 was 152,136 tons at 30 tons per hectare thus 67.6 percent of the total capacity of the Komenda new mill which has a capacity of crushing and milling 225,000 tons of sugarcane per year and this is just for 180 days, so half a year. This may mean that 5,071 hectares was put under official sugarcane cultivation The report stated that .30,00 tons of sugarcane was produced from the catchment area of the Sugar Mill, since sugarcane from areas beyond 40 miles radius to the Sugar Mill may not be good for production hence a deficit of 195,000 tons of sugarcane. This give a very huge deficit thus making the installation of the 1,250 metric tons of sugar cane per day as a waste or not cost effective. A sugar Mill lesser than 1000 metric tons would have been appropriate to reduce cost in servicing, maintenance and power consumption.

A report indicated that in 2016 after installation of the Sugar Mill, two successful test runs were done and this could produce only 12.5 Metric tons of unrefined brown sugar and went into inoperative for the past 8years due to unavailability of raw material. You may wish for confirmation so Google for Komenda Sugar Factory to commence production by the end of year. The Failure to use our head to fix the environmental requirements for including tailings reservoir for the Sugar Refinery and the certification by EPA and run the Sugar Refinery with imported raw sugar was/is not acceptable. So let us act now.

Komenda Sugar Refinery
Commercial Sugar Refineries normally have 98 percent recovery rate and not much is known about the capacity of the Komenda Sugar Refinery Unit. The capacity of Sugar Refinery for refining sugar ranges from about 800 ton per day per day to 3,000 tons per day. Example, the Dangote Sugar Refinery in Nigeria reportedly started producing 60,000 bags per day of refined sugar with each bag of sugar at a net weight of 50kg per bag. Thus 60,000 bags x 50kg equal to 3,000,000kg of refined sugar per day. Since 1000kg is equal to one ton, the 3,000,000kg translate to production of 3,000 tons of refined sugar per day.

Ghana in 2016 reportedly imports a total of 700,000 metric tons of refined sugar per year which translate to 700,000 tons of refined sugar per year multiple by 1000kg per ton to give 700,000,000kg of refined sugar imported per year. So if a maximum bag of refined is 50kg, then the 700,000,000kg per year will give 14,000,000 bags of refined sugar per year with each bag of refined sugar weighing 50kg.

So, based on the need for days for maintenance and servicing, likely breakdowns etc let us reckon 60 days for the servicing etc leaving 300 days for production in a year for the Sugar Refinery. This implies that with a Sugar Refinery with almost 100 percent recovery rate, Ghana needs to produce locally a little over 700,000 tons of raw sugar so as to attain 700,000 tons of sugar for domestic, Pharmaceutical and industrial consumption per year, surpassing this figure may take care increase consumption.

With the assumption of 300 days for the operation of a Refinery, the 700,000 tons of refined sugar per year means that the capacity of a Sugar Refinery to meet Ghana’s interest is 700,000 tons divided by 360 days to give 1,944 tons of refined sugar per day. Hence Ghana needs a Sugar Refinery or a number Sugar Refineries capacity with a total about 2,000 tons. Ghana currently has over fifty Sugar Refineries in operation in Greater Accra, producing sugar from imported raw sugar or packaging of imported granulated sugar.

Attempts to Develop Sugar Production the Fourth Republic

The idea of reviving the Komenda Sugar Factory was visited by the Regime of President Kofour in 2002 but this was abandoned due to expert advice as not good to do so. So, in order to reduce the huge importation of Sugar, the Kofour Regime in 2007 sought the support of the Government of Brazil, the World leading producer of Sugar to study the possibility of a viable and cost effective Sugar Production Series (Sugar Plantation, Sugar Mill and Sugar Refinery) in Ghana. The Government of Brazil commissioned a Brazilian Company named as Embrampa to do the studies.

The Brazilians found the North East Region of Ghana especially Savelegu near River Dakar, a tributary of River Volta as one of the good areas for commercial sugar plantation, since the area has the capacity to produce 80 metric tons of sugarcane per hectare which more than what was produced then in Sao Paulo in Brazil. With yield not less than 75 metric tonnes per hectare. So due to available over 20, 000 hectares of arable and irrigable land, good climatic condition for the grass family plants in the grassland, recommendation of the establishment of Sugar Plantation, Sugar Mill and Sugar Factory (Refinery) to process the sugarcane was made .

Coincidentally, the current President of Brazil, President Luiz Lula Da Silva was the one in 2007 as the Head of State of Brazil, and supported Ghana with the feasibility studies. So the then Brazilian Government planned to offer 260 Million Dollars to Northern Sugar Resources to establish sugar plantation and refined sugar refinery and molasses and ethanol subunits in Northern Ghana, so that Ghana could also export ethanol. The project was shot down by my northern brothers in Parliament from the stable of the NDC who accused President Kofour of land grabbing.

Then in 2010, President Mills also tried to see how best he could revive the Komenda Sugar Factory through Cargill International but he was told by Cargill International that it was not cost effective to do so. Cargill indicated that they will prefer the establishment of a Sugar Refinery in Tema with 100million dollars with initial capacity of 450,000 tonnes to process imported raw sugar but to convert Komenda and Asustuare to produce ethanol with imported raw sugar with the view to late on promote local production of sugarcane and establishment of Sugar Mills by application of the theory Backward Integration.

In 2013, President Mahama visited Mauritius and invited Omanicane Flexi Sugar Cane Cluster to replicate same Sugar production series in Ghana. Google for Mauritius Sugar Cane Sweeten trade with Ghana dated 10 September 2014. In 2014 after studies made in Ghana, Omanicane Flexi announced her readiness to invest 250 Million Dollars over five years in Savelegu to cultivate 20,000 hectares of sugar cane to produce 120,000 tonnes of sugar and ethanol to export to the EU.

Considerations for Sugar Policy/when applying Backward Integration

For a successful Sugar Refinery Company, the need to be supported with a Sugar Policy and application of Backward Integration plan cannot be overstressed. So, need to foster inclusive participation through digital solution through digitization and digitalization for networking, awareness platform, dialogues through zoom, partnership to create stronger supply chain. Hence, the engagement of Stakeholders in the value chain especially Farmers from the beginning in price determination and incremental rate is crucial for the sustainability of the project. Subsidies and time or how to introduce import substitution policy.

So various intervention to be considered for farmers. Need for Collaboration with the Universities and crop research institutions to encourage sustainable farming of sugarcane, efficient practices, in order to improve the socioeconomic conditions of farmers and drive behavioral change to ensure sustainability.

Not all Farmers are properly resourced to invest in better Agric practices. That is not all farmers will produce sugarcane profitably, some may falter or fail, so the Sugar Refinery Company needs to tailor sustainability interventions to meet different needs of farmers. So eschew a policy of one size for all farmers and consider the possibility of poor farmers who may need special priorities including non-commodity focused intervention.

Need for consideration of issues at the farms, issues at the Sugar mill, issues at the Sugar refinery, issues at market level and to address these issues, there is the need for collaborative effort through public-private partnership, to include all stakeholders.

Consideration of socioeconomic and environmental factors to deal with climatic change impact since weather and climate play a key role in sugar production because drought and high temperatures cause substantial loses as most small holder farmers systems are not resilient enough to deal with extreme weather, which causes crop failure. Need to factor likely unsafe conditions of child labor. Health and safety problems need to be addressed and also need to take note in the plan matters of inefficient practices like poor water management due to inefficient irrigation and poor water distribution or management, how to use fertilizer efficiently. Also, need to train them on pre-harvest requirements by induction on tactful burning of sugarcane to remove excess leaves.

Need to minimize the impact of shocks, by developing a program and factor in the issue of very low price that may cause farmers displeasure. Issue of own labour unrest, labour shortage should be factored so as to provide better understanding of the value chain. Also consider the need for resilient food system by pushing farmers and traders or markets towards sustainable and resilient food system. Lastly a good off taker agreement at acceptable price by both parties.

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