MANUFACTURING BETWEEN TRADITION AND INNOVATION

Ghana 2018 | INDUSTRY & MINING | B2B

Despite a lack of reform, there are still abundant manufacturing opportunities in the usual suspects—oil, mining, gas, water, telecoms, real estate, and agriculture.

Hayssam Fakhry
HAYSSAM FAKHRY
Managing Director
Interplast
Ashok Mohinani
ASHOK MOHINANI
CEO
Mohinani Group

How have operations evolved in the last few years?

HAYSSAM FAKHRY We are pretty much in the same place as 2016; with the change in government, we will have to wait and see about new policies. Our business mainly focuses on projects, so the more projects there are, the more we can upgrade our capacity. There are projects in the pipeline; it is just a matter of time. We are targeting three or four sectors, including water projects, telecoms, and mining and gas. However, the greatest potential is in agriculture. We have designed, implemented, and sold 20 projects within the agriculture division. These involve drip irrigation, drainage, large-scale farming, and more, which are completely new. The future is in drip irrigation; it saves water and gives a better crop. Agriculture is the future, not only in Ghana, but in West Africa.

ASHOK MOHINANI It has been pretty stagnant since 2016. There has been a change in government, and new policies are a work in progress; however, it has still been more or less the status quo. Packaging sector manufacturing, whether it is paper or other forms, is still the core of the Mohinani Group's business and what we will focus on. Whenever we go into something, it is because there is a market for it. Currently, there are no new real estate projects since the market is saturated in most segments. However, when we went into the real estate sector it was because we saw opportunities. There will be niches with opportunities here, but only in select segments, such as low-cost housing. For select geographical areas, there is also still plenty of room to invest in hospitality. It is just a matter of getting the right pricing point.

What is your expansion strategy?

HF In the immediate future, we are looking at Ghana, Burkina Faso, and hopefully Nigeria when their economies return to normal because right now the market is closed. In East Africa, the most obvious destination for us would be Kenya because of its location and what it represents; from there we can cater to several other countries. Our strategy for now is to get there through a local partner. The most important feature is reputation, followed by the kind of facilities they can give us to enter the market. The problem with our product is that shipping piping involves shipping a great deal of air, and, therefore, becomes uncompetitive. We are looking at 15% growth, which is achievable, and always seek to expand our client base. Fortunately, people who work and do business with us in Ghana want to buy our products, as they are excellent and reputable. We have a niche target, and the people who use our products are specialized. We are always looking to launch niche products, though we are waiting to see how the economy grows.

AM The only exporting we do from here is our packaging, and that is more to neighboring countries such as Sierra Leone and Liberia within the ECOWAS region. There is enough capacity between the Ivory Coast, Nigeria, and Ghana to take care of all the ECOWAS countries; it just depends on who is competitive and what relationships you have. That is where we are sticking to for business and something we will continue to do. There are many bottlenecks in getting some products out to certain countries. The government has planted the seeds and is trying to automate the system and speed up the processes for getting products into other countries. We have also seen interest in FMCG products in the local food and beverage segment from potential investors, and local and multinational brands are expanding their capacity. Energy is certainly at the top of the list as far as the factors that make us uncompetitive with neighboring countries. There are a lot of initiatives, not to mention the gas pipeline. The ruling on the border dispute with Ivory Coast should help improve this over time, but I do not know how fast this will happen. We are looking at solar to see if we can cut some costs by getting in certain parts of our operations, but the rest of the issue is beyond our control.