Sentuo Steel Limited, a Chinese Steel manufacturing company in Ghana, said in Accra on Tuesday it was ready to break into the West African market.
This is after the company has operated in the Ghanaian market for the past four years after taking over the 300,000-capacity Wahome Steel factory in Tema, 38 km east of the capital.
Sentuo recapitalized the company to the tune of 48 million U.S. dollars and employed a total of 600 hands.
To achieve the aim of entering the West African market, Sentuo, owned largely by a Chinese firm with the Social Security and National Insurance Trust (SSNIT) holding minority stakes, has completed the phase two of its factory awaiting supply of electricity to start operation.
"Our phase two total capacity is 500,000 tones to manufacture coils. I calculate almost to employ 700 people," Xu Ningquan, Managing Director (MD) of the company, said in an interview.
According to him, the second phase of the project was financed by shareholders and the company's working capital to manufacture steel coils, which will be the first of its kind in West Africa.
"Minus the working capital, the expansion cost about 53 million U.S. dollars. It was funded by our shareholders and also our Sentuo working capital to support phase two. Sentuo's customers came to me and explained to me, and after studies, we confirmed the size of the West African market and so we decided to do the phase two," the MD added.
In the face of scarcity of raw materials for the manufacture of iron rods in Ghana, the MD expressed confidence in importing cheaper raw materials.
Emmanuel Ayanso, General Manager of Sentuo Steel, explained to journalists touring the factory on Tuesday that the importation of steel coils to be straightened and sold as iron rods was one of the major challenges confronting the steel companies.
"There is a law to that effect, banning the export of ferrous scrap. So the ferrous scrap that the steel companies use in manufacturing iron rods are supposed to be banned legally. But there have been instances of illegal exports of scraps, some of which have been intercepted by customs at the ports and so on," he stated.
"When they straighten it and they come on the market, with their five percent tax, they compete with the iron rods locally manufactured with iron rods imported which will attract 20 percent duty."
