Chinese investors eye salt industry

Plans are far advanced for Chinese investors to acquire a 730 sq km plot of land for the commercial production of salt in the country.

The CEO of the Ghana Investment Promotion Centre (GIPC), George Aboagye who disclosed this to B&FT, was optimistic the investment would revolutionise the salt industry - transforming the country into a global supplier.

Recent studies had concluded that with modernisation Ghana’s salt industry could rack up its current annual production of 250,000 metric tonnes (mt) to an ultimate annual output of 2.2 million metric tonnes (mmt), or 3mmt on the wider, thus making the country a significant producer but not a global player.

“The introduction of superior Chinese production technology would mean the country could produce several times more than the current estimated total production potential of 2.2 mmt per annum,” he said.

“We could be seeing a project within the next couple of years, as GIPC’s facilitation of land acquisition will eliminate the usual hindrances associated with land for the establishment of projects of that magnitude,” Aboagye said, adding that the Chinese had already approached the China-Africa Development Fund for project funding.

China produces over 50mmt of the global total annual output estimated above 260mmt, but the recent rapid industrialisation of the world’s second-biggest economy and the Asian region generally has created a consistent supply shortfall, especially to support their rapidly growing chlor-alkali market.

“Increased output from Ghana would see supply flows in that direction; however it would also help secure the expected 1.0mmt demand by Ghana’s nascent oil industry for local producers against foreign suppliers,” Aboagye intimated.

Foreign suppliers including Brazil and Australia have been supplying salt to the neighbouring Nigerian petrochemical market, which has an annual value of over US$1.5 billion.

There are worries foreign suppliers could snap up the incipient market of Ghana’s oil industry from local salt producers whose obsolete production methods - from protracted underinvestment and land acquisition challenges - render them uncompetitive and ineffective in meeting rising demand.

“Local producers could ride on the back of the Chinese production while measures are implemented to improve their productivity and competitiveness,” Aboagye said.

Ghana and Senegal are estimated to be the only countries on Africa’s Atlantic coast with the potential for commercial production of salt, with Ghana being more competitive.

Recent studies show Ghana’s entire 500km coastal front can support salt production, with the Songhor basin in the eastern part being particularly productive, potentially accounting for approximately 64 percent of the country’s total production.

source:B&FT