Salt export will boost FX position, stabilise cedi – McDan CEO


…says full production from Songhor within 8 weeks

Amid conversations around the deteriorating cedi, comparatively low export levels and global supply chain constraints, the salt export and value chain has a potential to rake in an excess of US$2billion annually to the local economy, renowned industrialist and founder of Electrochem Ghana Limited – the largest salt and chlorine-akali manufacturing company in West Africa – Dr. Daniel McKorley has said.

According to Dr. McKorley – who is the Chairman of the broader McDan Group of Companies, developing the industry will not only serve to boost foreign exchange (FX) receipts but also drive domestic youth employment and insulate the nation from excessive shocks from outside its borders.

“If we fully develop our salt industry, it will go a long way to ensure that our local currency – the cedi – does not depreciate so sharply against major trading partners as we will earn more,” he said in an interview on ‘Business Focus’ broadcast by TV3.

The industrialist said his status as a Ghanaian and an indigene of Ada guarantees that proceeds from the mining activity will remain local – adding that having domestic companies with similar scope would resolve many lingering economic issues.

“Electrochem will not be repatriating my dollars, and every single dollar will remain in the country. If we had two, three, four of such businesses, the impact would be tremendous,” he said.

This comes as managers of the economy continue to grapple with effects from the cyclical repatriation of funds.

The Bank of Ghana has already signalled its intention to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies, in an attempt to strengthen the central bank’s FX auctions and boost FX supply.

Dr. McKorley further stated that the salt shortfall within the sub-region provides a ready market; one that will only grow with operationalisation of the African Continental Free Trade Agreement (AfCFTA).

“In the last year alone, Ghana imported more than 700,000 metric tonnes of salt; the Ivory Coast did about 1 million and Nigeria some 1.5 million metric tonnes. We can plug into this market and have ourselves as market leaders in this segment.”

All set

The McDan Chairman disclosed that the project is far advanced, at the infrastructure stage with all relevant production equipment already in the country. Consequently, within the next eight weeks, full refining and production will take off for the project which has cost in excess of US$77million – funded from equity and other sources and creating more than 3,000 direct jobs.

“Almost all the equipment has landed at the factory and we are near to completing work at the industrial area; and within a month or two we will be washing pure salt from Ghana,” he said.

The global salt market reached US$28.5billion at the end of 2020, with 270 million metric tonnes of salt produced during the period. The market is projected to grow to US$36billion in 2026, with China controlling 22.48 percent of the world’s production.

Electrochem resuscitated the Songhor Lagoon, which had laid dormant for almost a decade and has the potential to produce more than 1.75 million metric tonnes annually – rivalling the continent’s largest producer, Egypt, and a sizeable jump from the current 250,000 metric tonnes the nation produces.

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