Three African business giants, Jospong Group, Scaw Metals Group and Guma Group, Wednesday, announced investing US$40 million in the Ghanaian economy. The investment is tailored at stimulating growth in the local steel industry to produce metals to service companies in the West African region, especially, those in the mining sector.Jospong Group, a wholly Ghanaian firm, has 30% stake in the deal, with the remaining 70% going to the South African firms. The three, would now operate under the business name Guma Jospong Consortium.
The consortium has been given first preference to supply products and services during and after the facility’s construction and is also expected to bring additional investment to Ghana by increasing the steel product range, through a company which will produce other steel related products including Rolled Products; long steel products, reinforcing bars, low and high-carbon wired rods, reinforcing coil, etc
As part of the deal, South African steel products manufacturer, Scaw Metals Group, would construct a new grinding media plant with a 5,000 tons per annum Roller-former production facility at Tema which would produce media in the sizes ranging from 38mm to 76mm in diameter.
Construction of the facility which would commence early 2014 and is expected to be commissioned eighteen months later.
More than a hundred people are expected to be employed during the initial phase of the project, with forty-two direct jobs expected to be created once the plant comes into operation.
The deal would also see South African experts train and transfer the process knowledge to their Ghanaian locals, leading to the eventual handover of the facility under their care.
Scaw Metals Group is the largest producer of cast high chrome grinding media in the southern hemisphere with more than 80 years of experience. It is the leading integrated producer of specialty steel products for the mining, construction, industrial, power and rail sectors.
Chief Executive of Scaw Metals Group, Markus Hannemann expressed delight at doing business in Ghana and noted that the US$40 million deal was an outbound investment for a South African entity.
He commended the Ghanaian government for pushing for the local construction industry to stimulate economic growth and provide job creation.
“We believe that through this partnership, significant strides can be made towards industrializing Africa. Gone are the days when Africa exports only raw materials,” said Hannemann.
South African Trade and Industry Minister Dr. Rob Davies, commenting on the deal said the US$40 investment portfolio adds to the US$6.2 billion of South Africa’s investment into Ghana spanning a period between 2003 and April, 2013.
He said the deal by the three giant firms demonstrates the continent’s belief that the next phase of African growth had to be driven by industrialization and value-addition and not only the export of raw materials and the import of finished products.
“This project is going to bring value-addition. The deal is going to be win-win for both countries. South Africa will benefit from the importation of raw materials while Ghana will benefit from adding value to the produce,” noted Rob Davies.
The Chief Executive Officer of the Ghana Investment Promotion Center, Mrs. Mawuena Treba said “. I am particularly excited because there was a very strategic view of what the market required from both companies. They engaged individually – they looked at various opportunities and they identified an area to collaborate. This investment is specially, significant, because it demonstrates the tangible results that we are looking for. It will take the continent a step further up the value-chain.”
Chief Executive of Jospong Group, Dr. Joseph Siaw Agyepong also commenting on the facility said “this deal has come to cement the two countries’ relationship in terms of business and cooperation. It is also a springboard for other entrepreneurs in Ghana to move to South Africa to do business.”
He thanked the President, John Mahama, for creating the enabling environment for entrepreneurs in South African and Ghana to come together to form partnerships.
He said the deal was just a tip of the iceberg of businesses going to spring up in Ghana. He expressed the hope to use the platform the partnership deal has provided him to also invest in the South African economy.
Chairman of the Guma Group, Robert Gumede on his part said “our investment showcases the value that partnerships between the private and public sector can bring to infrastructure development in Africa.”
The Guma Group is a Pan-African, black owned multidisciplinary investment company with operations globally and across the African continent which focuses on energy power generation, ICT, infrastructure development, tourism, property real estate and shopping center development.