Prof. Lade Wosornu, Chairman of Aluworks PLC, has praised the Ghana Revenue Authority’s Customs Division for imposing a 35.77 percent additional tariff on cheap aluminum products from China.
This move, according to the chairman, will allow Aluworks to compete more favorably in terms of product pricing.
Prof. Wosornu encouraged the firm’s major shareholders, SSNIT and Caitlyn Limited, to complete their collaborative investment talks so that the company may get working capital to meet the constantly increasing demand anticipated under the Africa Free Trade Initiative. He mentioned that last year’s business was adversely impacted by the economic slowdown brought on by the Coronavirus pandemic, border closures, and the increased international market price of aluminum,
“In 2020 we purchased 3,776 tons from Volta Aluminum Company (against a budget of 5,600 tons) and produced for the market 3,672 tons compared to 2019 where we purchased 4,302 tons and sold 4,318 tons.”Prof. Wosornu
Prof Wosornu revealed that cheap aluminum imports from China had a negative impact on their operations last year, resulting in sales of just 3,665 tonnes (GH68.975 million) in 2020, down 12% from 4,168 tons (GH76.993 million) in 2019.
The chairman also noted that financial costs such as interest on the outstanding SSNIT loan for their second cold mill and exchange losses resulting from purchasing aluminum from VALCO in foreign currency remained high, resulting in a net loss after tax of GH33.794 million in 2020, up from GH24.199 million in 2019.
“The phenomenon pushed income surplus account into a deficit making it impossible for the directors to recommend any dividend.”Prof. Wosornu
Prof Wosornu stated that the Board and management of Aluworks PLC were committed to rebranding the company as a dependable industry leader and people-favorite supplier for customers, offering them tailor-made goods and services.
Mr. Ernest K. Okoh, Managing Director of Aluworks, expressed his joy that the Customs Division was enforcing the GITC order to ensure the viability of the local industry.
Mr. Okoh, however, intimated that they would “monitor the process keenly to see how the implementation works out.”
The 35.77% tax on Cheap Aluminum
Last year, the Ghana International Trade Commission (GITC) ruled that Chinese aluminum coils and circles are being dumped on the Ghanaian domestic market, causing material harm and posing a threat of material harm to the Ghanaian industry.
Professor Paul Kuruk, Vice-Chairman of the GITC, issued his decision on Aluworks Limited’s petition No. ADR-GITC /001/209. For the goods, the Commission computed a 35.77 percent weighted-average dumping margin.
The Vice-chairman noted that material injury to the domestic injury was discovered to be in the form of the decreases faced by Aluworks with respect to its overall sales, market share, return on investment, productivity, incoming cash flow, growth and utilization of product capacity. He stated that Aluworks submitted an application to the Commission to investigate the suspected dumping of aluminum coils and circles originating in or imported from China.
According to the professor, the Commission determined that Aluworks was Ghana’s sole manufacturer of aluminum coils and circles, and thus received the application as a complaint filed by the domestic industry.