CONSTRUCTION

Ghana 2018 | CONSTRUCTION & REAL ESTATE | B2B

Cement and steel producers are the literal and figurative foundations of Ghana's construction sector, which is set for growth following investment and the launch of several PPPs.

Tor Nyargard
TOR NYARGARD
Managing Director & CEO
Dangote Cement Ghana
Kojo Brompong
KOJO BROMPONG
CEO
BM Construction

What is the history of your company in Ghana?

TOR NYARGARD We started operations in 2010 as a cement-bagging plant, importing bulk cement and bagging for onward delivery to the market. The plant's capacity is around 1.5 million tons and about 10% of our product is bulk cement. We originally had 9,000 tons of silo capacity, which we increased to 21,000 tons in 2016. In 2016, we had 1.1 million tons of output and we expect 1.3 million tons in 2018, which represents a market share of 23-25%. The construction industry has historically been the largest market for our cement. Ready-mixed producers have also been strong customers, and they benefit from our high-quality cement. We also have a geographically diverse reach, which is an extremely important advantage over other companies.

KOJO BROMPONG BM Construction is a four-year-old company that was born out of the idea to introduce steel into the market while also focusing on industrial and commercial business work and projects. Ghana has traditionally used brick and mortar in construction. However, our shareholders have been in business for 20 years, and there is an increased need for steel in factories and warehouses in Ghana. Thus far, our use of steel has created growing interest and requests in Ghana, and we expect to become a leading company in the country.

How do you seek to grow the company?

TN We are extremely competitive, and we have a world-class product, competitive pricing, strong reliability, and excellent customer service. We import a more expensive product, making it difficult to be competitive in terms of pricing. Nonetheless, we have a well-known product that is the industry standard, and many customers prefer to use us. There have also been several new entrants to the market in the last few years, making it even more competitive. We are also working to install a grinding mill in Takoradi and Tema. This will allow us to be more competitive in the local markets in the right segments, and allows us to produce varying qualities of cement. We invested USD55 million in the Tema plant. We have also acquired 1,000 trucks at a total value of USD82 million to support our logistics here and in Nigeria. The mill in Takoradi, hopefully, should be ready to begin operations in early 2019, while work on the Tema mill should also be starting early 2018.

KB We want to be a leading steel company and in order to achieve that we take care of every project that we participate in. These projects require large investments around USD1-2 million. Therefore, we have to reach out to clients in a way that gives them the confidence to hand these projects to us. First, we aim to meet the needs of each business as much as possible. We look at getting our name out in the media, especially in print, to build up credibility. We have gotten calls from regulators who have been interested in what we do as a result of our print ads. That is great because it has helped increase confidence in our services. Business leaders are our targets, and we reach investors coming into the country through chambers of commerce and industry and the government's investment promotion agency.

What measures do you expect from the public sector to enhance businesses such as yours?

TN The most important thing is a stable currency. Since we import raw materials, around 80% of our cost is in dollars and a stable exchange rate is therefore vital. Reliable electricity is also key. We are currently running on generators, as are many other companies. An extensive and quality road network is also important as we transport our cement across the entire country, and improved infrastructure is extremely important.KB Generally, industry is picking up. There is growth, and the Ministry of Trade and Industry has launched initiatives for PPPs that will protect manufacturing in Ghana. This means that buildings have to be built, and steel is the best raw material to construct them. When this new government came to power, investors started to look at Ghana. Businesses are encouraged here, and a great deal industrial development will be needed. We are in an excellent position to grow in our business. There are competitors and companies that do not manufacture here and import their products; however, we have designers, architects, and engineers who are willing to work with anyone interested in our work.