Aluworks Limited has been going through a long and difficult period.
In 2009 and continuing into 2010 and 2011, there has been an influx of extremely cheap aluminium finished products imported from China by Ghanaian companies enticed by the very low prices offered, despite the obviously higher quality of Aluworks products. The low Chinese prices have been enabled by the offer to Chinese export companies by the Government of China of very deep export rebates.
They have deemed this necessary to firstly provide quick penetration into West Africa following the dry up of demand in the traditional markets in the US and Europe, following the world wide recession and the credit crunch, and secondly to ensure continued industrial production in China to keep the populace at work and to prevent a diminution in incomes.
The rebates are so deep that it enables Chinese quote prices that simply signify the blatant dumping of material from China into Ghana and West Africa. Chinese price quotes are at slightly above the cost of the raw material imported into Ghana and therefore stifle local competition that has to add value to convert raw material into finished goods.
The situation has been severally brought to the attention of the Government of Ghana (and simultaneously to the Government of Nigeria in concert by our Nigerian counterparts) and it is expected that Government will respond through suitable countervailing measures within WTO rules to level the playing field. However the effect will only be felt from 2012.
Prior to this current phenomenon, Aluworks had been subject to huge cost pressure arising from
Click here to download full document