It is reported that steel companies in the industrial city of Tema face imminent closure, with attendant loss of 3,000 jobs, as a result of an acute shortage of basic raw materials like scraps to produce iron rods and other steel manufactures.
The shortage is largely due to the diversion of scrap metals through smuggling and illegal exports, which players in the industry say flouts the country's regulations and deprives local steel industries of adequate amounts to keep their business running.
Owing to the situation, workers and union leaders of some major steel companies, including Ferro Fabrick Limited, Tema Steel Works, Special Steels Limited, and Western Steel and Forging Limited, met their employers at a crisis meeting to discuss ways to overcome the problem.
Already Wahome Steel Limited has had to shut down and send an entire workforce of about 350 home, B&FT has learnt. Ferro Fabrick also stopped production temporarily, while Special Steels produced no output.
Tema Steel Works is said to have only 30 tons of scraps left, enough for two days production, and Western Steel and Forging Limited now operates a half day schedule instead of the previous three shift system.
Mr Michael Tetteh Mortu Workers Union Chairman of Ferro Fabrik Limited said that in fact, the situation is alarming and if help does not come from above, we and our families would commit suicide.
He further warned that if the situation does not improve within the next two months, all the companies would close down and consequently, workers would have to be sent home.
According to him, although a ban had been imposed on the export of scraps since 1980, alongside stricter enforcement efforts in 2007, some dealers still smuggle the commodity to neighboring countries or export it overseas.
Scrap metals form the core raw material input in the steel industry, which relies on local suppliers to feed their businesses. However, due to higher prices in neighboring countries and overseas markets, a considerable amount of the commodity is smuggled or exported out of the country.
Dealers said that while a tone of scraps fetches USD 580 and USD 1,500 in neighboring West African countries and overseas, respectively, it is sold in Ghana for GHC 420, making it more attractive to sell to clients in outside destinations.
Mr Sibnath GM of Western Steel and Forging alleged that "It is an open secret that some big men in the country use the main Tema harbor to export a chunk of scrap metals overseas, under the very noses of the security agencies."
He claimed a number of illegal exit routes along the country's borders are notorious for being used to cart scrap metals out of the country. He cited the Paga border in the north east of Ghana and areas around the eastern border with Togo.
He added that "Though it is believed that scrap exporters get better deals for their goods on the international market, the illegal export is seriously killing our local steel companies."
Mr Vinod executive director of Special Steels Limited said that government needs to streamline its preventive operations to combat illegal scrap exports, seeing that despite the ban, the practice continue unabatedly. He said that this is necessary to protect steel companies from collapse, save jobs and provide more employment to citizens.
(Sourced from www.accra-mail.com)
