The Volta Aluminium Company Limited (VALCO), a state-owned aluminum smelter, has announced that it is hopeful of securing a strategic investor by the end of 2023. The approval by the Cabinet of Ghana for VALCO and the Ghana Integrated Aluminium Development Corporation (GIADEC) to seek out a strategic partner is a significant step in the company’s efforts to modernize and upgrade its smelter to world-class standards.
Dr. Henry Benyah, the chairman of VALCO, made the announcement at the company’s Annual General Meeting held in Accra. He revealed that Transaction Advisors have been engaged to manage the process of the search and selection of a strategic partner with the requisite technical capacity to deploy the most competitive smelter technology, backed by the needed investments and strategic global linkages in consideration for an agreed equity stake in a restructured VALCO.
VALCO has experienced relatively stable operations for the past two years, as evidenced by the results for 2021 and 2022. In comparison to its performance over the past decade, VALCO recorded its best-ever performance in 2022, second only to the results of 2021, posting an adjusted EBITDA positive return of US$5.39 million.
Reporting on the operational performance of the company, the chief executive officer, Dan Acheampong, was very pleased to note that VALCO has come a long way from where it faced huge existential challenges, where the future of the smelter was threatened, to a relatively stable and productive business, in readiness for the expected massive take off with the sourcing of a strategic investor.
However, Acheampong cautioned that the company was not out of the woods yet. He stated that the team at VALCO was committed to working in line with its principle of “continuous improvement,” leaving no stone unturned, and building upon the improved performances to bolster confidence in the company’s ability to become a world-class smelter.
The company hopes to leverage its successes in the last three years regarding operational stability to lay a firm foundation for 2023 and beyond. This is in line with the objectives outlined in its five-year Strategic/Recovery Plan (2020-2024) which places emphasis on maintaining operational stability as it transitions to the “Retrofitted VALCO” to assure a sustainable turnaround.
The company has identified some product-value maximization and cost-reduction initiatives to make the operation sustainable in the short term while working to implement the final phase of the recovery plan. This is in consonance with the VALCO Modernization Project dubbed Project 4 under GIADEC’s Integrated Aluminium Industry (IAI) Project Masterplan currently under execution.
In the coming year, VALCO plans to position itself firmly in the aluminium downstream segment of the Aluminium value chain. This it hopes to do by entering into joint ventures or direct participation in the high-end value-addition downstream segment of the Aluminium value chain.
The company believes that incorporating downstream activities into its operations, like all globally competitive smelters, would make its operations more viable. VALCO also recognizes the fact that the future of aluminium is “green”. It is therefore positioning itself through various environmentally-friendly initiatives to reduce its carbon footprint in order to take its pride of place as a net carbon emitter and a “Green Aluminium” Smelter.
VALCO expressed its gratitude to the government, the board, management and staff, Volta River Authority, GRIDCo, and indeed, all Ghanaians for helping to keep it alive to this point of take-off. The company continues to ask for the support of all stakeholders as it strives to anchor the destiny-changing Integrated Aluminium Industry Project currently under execution.