Morten Gade’s open house

Morten Gade’s open house
Published: 04 April 2006

The Managing Director of Ghacem, Morten Gade, has commended the Government of Ghana for adopting sound fiscal policies, many of which have turned the country into one of the best business destinations in Africa. Speaking at a media get-together at his residence in Accra last weekend, Mr. Gade said he is impressed with the country’s economic indicators especially with inflation coming down at a significant and appreciable level. He said the stability of a currency is also among the good signs that investors want to see in a country and Ghana’s cedi has been holding its own against the major currencies these past five years. Mr. Gade also mentioned the current stable political environment in the country and said looking at the Ghanaian atmosphere compared to that of other neighbouring countries "there is no doubt that Ghana is an island of stability" and an island of stability, he said attracts foreign direct investment.

Touching on the operations of Ghacem, Mr. Gade said it is the nation’s premier cement producing company and has created more employment to Ghanaians and contributed greatly to the nation’s economy. He disclosed that the company has paid roughly US$22m in duties and taxes alone in the year 2005.

He said Ghacem has over the years increased the use of local raw materials in its products and is doing all it can to sell its cement at the lowest possible prices to Ghanaians. He said the company since July last year has not increased the prices of its products and has no intention of doing so now. He explained that the prices of their products are being determined by the cost of raw materials and the cost of transporting them to the factory.

On corporate responsibility, Mr. Gade disclosed that the Ghacem Foundation, since its inception in 2002, has donated over 100,000 bags of cement to needy communities in Ghana to undertake development projects including the building of schools and hospitals. Ghacem presently, he said has no "problems" but rather "faces many challenges".

He explained: "We have plenty of challenges at Ghacem; one of them is how to become fitter, stronger and live to face competition in the years to come. You cannot avoid competition and you must learn how to survive it". He said Ghacem, having enjoyed monopoly from 1967 to 1999, has been devising strategies to face the inevitable competition. This, he said, is being done in a very cordial and understanding atmosphere with the competition already in the system.

He mentioned inadequacies in meeting demands as another challenge and said the company is making progress in increasing its capacity to meet the challenge. "When I came to Ghana in January last year, we had big challenges in meeting the demands for our products. We had a backlog - in Tema only, of about 30, 000 tonnes. Today we are down to roughly three to four thousand tones", he disclosed.

He disclosed that Ghacem has challenges when it comes to "streamlining our operations", because "we have been living in an atmosphere where we had three units, Tema, Takoradi and Head Office in Accra". He was of the view that: "We have to create one great strong unity feeling in the company".

Mr. Gade, when asked about the fate of Ghacem House at Kokomlemle in Accra, the former headquarters of Ghacem said it is up for sale to the highest bidder. "We are not desperate to sell it now from the financial point of view but is up for sale". He disclosed that the building is worth US$2m.

Answering questions as to why cement prices vary from different locations in the country, Ghacem Commercial Director Dominique Mannie, attributed the pricing differentials to transport costs from the manufacturing factories to the different market locations.

He said the price of the milled cement from the factory is uniform throughout the country, but varied when transport costs are included. He disclosed that Ghacem is currently dialoguing with transport owners to reduce transport costs. "We are also looking into cheaper transport possibilities like using the Volta Lake transport facilities and the rails and at the end try to reduce the price of the cement", he said.

He expressed the hope that the Government of Ghana will continue to some extent give protection to local industries in Ghana to ensure that "we have an equal playing field; we don’t ask for additional protection but we just ask for some compensation for the additional cost of producing in Ghana". He noted that the additional cost of producing in Ghana as compared to some of the most effective places in the world include "the high cost of electricity here, the unreliability of power supply and also infrastructure not as developed as in those countries".