Government Seeks Investors For Songor Salt Project
Government has announced plans to invite private sector operators to undertake the Songor Salt Project to turn round the fortunes of the company in the next five to 10 years, Alfred Adjonyoh, the Administrative Head of the project, has disclosed.
The multi-billion dollar project, located at Ada, which has the potential to produce 1.4 million metric tons of salt per year and currently accounts for 70 per cent of the total internally generated revenue of the Dangbe East District Assembly, can not produce enough to meet demand in the local and international markets because of outmoded technology, poor industry infrastructure, low investment, cumbersome land acquisition procedures and mismanagement.
'We are currently operating one-tenth of the total surface area of the project,' Mr Adjonyoh, who is the native of Ada disclosed this to journalists during a fact-finding tour of the project site on Thursday.
The administrative head believes the nation's salt industry could generate revenue from Nigerian purchasers who import two million metric tons of salt from Brazil every year.
'The market is available but we do not have the salt to sell,' Mr Adjonyoh pointed out.
He projected that at least a million dollar would be needed to make the state-owned venture fully operational and believes government's plan to partner the private sector would make the project viable and internationally competitive.
He could not however tell whether the private investors would come from Ghana or abroad.
While Mr Adjonyoh envisaged that the public-private partnership would come off in the next five to 10 year, the District Chief Executive (DCE) of the Area, Rex Daniel Wussah, whose outfit gets GH¢300,000 from the project as annual revenue, thinks otherwise.
'The partnership will come off this year,' he said.
Currently, the Songor Salt Project, which is renewable, exports 65 per cent of its products to countries such as Togo, Benin, Niger, Burkina Faso and Ivory Coast.
The company sells the remaining 35 per cent of the products in Ghana and has an annual turnover of GH¢3 million.
Mr Adjonyoh said management intends to produce 90,000 metric tons of the commodity this year compared to the 46,000 metric tons produced last year and then increase production to 120,000 in the next two year.
He disclosed that a good marketing strategy had been developed by his outfit to enable it capture bigger markets in West Africa and thereby increase annual turnover from GH¢3 million to GH¢5 million this year.
The project, which has enjoyed monopoly in the market in the past five years, is now faced with fierce competition from a number of new entrants in the salt industry namely Dangbe Salt, Sege Salt and Idle Salt, with each operating from the same project site and producing about 10,000 tons yearly.
Apart from the aforementioned companies, 80 per cent out of the population of about 100,000 in the district have ventured into salt winning because the government has allocated a very big concession to them.
The individual salt winners in the community, majority of who are women, also produce between 50,000 and 60,000 metric tons of the commodity yearly and export them to neighbouring countries.
They also sell the salt at a higher price than the one being charged by the Songor Salt Project.
Checks by this paper revealed that while a 50-kilogramme bag of salt from Songor Salt Project is being sold for GH¢7.60, the commodity from the individual salt winners is going for GH¢15 for the same volume.
'Currently, we do not have any pricing policy in the salt industry,' Mr Adjonyoh explained.
The individual salt winners said they use one-third of their income to pay royalty to the chiefs of Ada and the District Assembly, in addition to the GH¢300,000 revenue the Assembly receives from the management of the Songor Salt Project in a year.
'Apart from paying the royalties, the District Assembly also collects GH50p on each 50 kiligrammes bag of salt when it is being conveyed from the site to the market,' Francis Azinah, a 65-year-old man, who has been in the business since 1952 stated.
Mr Azinah, who is also the spokesman for the individual salt winners at Kualedor, a suburb of Ada, lamented that despite their contributions to the District Assembly, government has never helped them in any way to improve production.
In Ghana, as in many countries, the most common method of salt winning is the solar evaporation, using brine from the sea or underground wells or boreholes.
'Our main problem is how to get access to the brine water and this is where we sometimes pick quarrel with the District Assembly,' Mr Azinah, who is a former Social Studies Teacher wept as he narrated his ordeal to the press and appealed to the Assembly to help address the problem.
He said the community members had to depend on rainfall and harbour it for a number of months before using it to produce salt.
The administrative head of the Songor Salt Project however assured that efforts are being made by his outfit to construct saltpans for the community members and to buy their products and market them on their behalf.
On his part, the Secretary to the Ada Traditional Council, Jonathan Dokutso told journalists that the Council was planning to invite private investors to take up 80 per cent of the total concession allocated to the community members and leave the remaining 20 per cent for the community members.
He said the community members have the potential to produce one million metric tons of salt if given the necessary assistance by the District Assembly.