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18.06.2005 Business & Finance

Government asked to Ban export of scraps


Tema, June 18, GNA - The government has been urged to promulgate a law to ban the export of ferrous scraps outside the country to save the steel industry from collapse.

In addition, the rules governing the importation of iron rods into the country should also be strictly implemented by allowing only a single point of entry for importers to know the exact quantities entering the country to prevent under invoicing and smuggling.

Mr. Anthony Boachie, Senior Commercial Manager of Tema Steel Company said the combined effect of low level of supply of ferrous scraps within the country and the importation of iron rods from overseas by dealers if not stemmed, could spell the doom of the steel industry in the country. "The fact that scraps constituted about 90 per cent of the volume of raw materials required clearly tells the harm that its exportation can cause to the industry," he said.

Mr Boachie was speaking to a group of journalists, who together with Association of Ghana Industries Officials visited the company to acquaint themselves with problems confronting the steel industry. The trip was also to allow the AGI officials to know the difficulties that various industries were going through to enable them make adequate representation to government.

Mr Boachie said although there already existed an administrative ban on export of scrap, it was not strictly being enforced, giving rise to abuse and smuggling. He alleged that some Ghanaian exporters of ferrous scraps were exporting under the guise of them being transit export from landlocked countries such as Mali and Burkina Faso. "It is important that the government promulgates a law with clearly set out punishment for offenders to keep the industry afloat and save the teeming youth from unemployment."

According to him, the three steel companies had the capacity to meet the 120,000 tons per annum requirement of the country, thereby making it unnecessary for iron rod imports, he said, adding however that current developments threaten the viability of the companies. Mr Boachie said the companies were being forced to lower their prices in response to the competition, saying however that prices could not forever go down without posing a threat to the financial viability of the companies. He said these problems coupled with erratic power supply were having a debilitating effect on the industry, preventing expansion and

development. Mr Boachie said Tema Steel has to put on hold its expansion programmes, pending the cessation of importation of Iron rods and exportation of ferrous scrap. The company, however, has invested about seven million dollars into a bigger electric arc furnace to double production and other equipment to make its production process environmental friendly. "But there are already fears that the new equipment will become white elephant if the exportation of ferrous scrap and erratic power supplies are not checked," he added. The Tema Steel Company was divested in July 1991. Currently the average production stands at 31,000 tons at steel Melting Shop and 40,000 Tons for the Rolling Mills.