Structural improvements in GhanaMarch 6, 2020
Mukesh V. Thakwani, CEO of B5 Plus, talks to The Energy Year about Ghana’s business environment and its potential to become a regional hub, as well as prospects for growth in the country’s manufacturing sector. B5 Plus manufactures and trades steel and iron products, which it supplies locally and exports globally.
How has Ghana’s business environment evolved in recent years?
Ghana is on a positive trend. Today we see the country doing well in every aspect. Over the last two years the macroeconomic situation has been getting much better, which is a positive sign. For the first time we are hearing that Ghana has a budget surplus and exports are in excess of imports. We believe the government will be able to control inflation. At the same time oil, cocoa and gold prices are going up, which will positively impact the local economy.
If Ghana can get enough foreign exchange reserves, this can have a very positive effect on inflation and the average buying power will be strong, which benefits any industry. Ghana is a country that has open arms, as well as rules and regulations that people follow.
Today, the big question is whether Ghana is becoming self-sufficient in producing the products it consumes. The government is pushing to ensure that government agencies and Ghanaians use “Made in Ghana” products. For products we are able to produce in excess, we should be able to provide enough for Ghana and export the excess to other West African countries. For such products, they should put a ban on imports so that the “Made in Ghana” dream can come true.
There is often a problem of cheap and poor-quality goods entering the market, which is spoiling the market and leads to government revenue losses if the products are smuggled. If “Made in Ghana” is pushed aggressively and becomes a reality, it will have a positive impact on jobs and the overall economy.
How feasible do you think it is for Ghana to become a regional hub?
We believe it is possible, but it is important for the government to understand what it needs to provide in order to facilitate this. We are West Africa’s biggest steel company, and we are developing a big project. We were told that we would be provided with electricity, water and security, but we have had a tough time securing these. We now have electricity on the campus, but we still don’t have water.
The government is trying, but it needs to try harder to realise the industrialisation dream. Ghana has a lot of strengths: people are well mannered, well educated, English-speaking and welcoming. The country is also strategically located.
Ghana has a lot to offer, but its industries need to be protected and that protection can only come from the government. Ghana has to attract investors, but it should not forget there are investors here that need to be helped and developed so they don’t leave and invest in other countries.
How would you describe the ability of Ghana’s infrastructure to help achieve the industrialisation goal?
We have to commend the government on infrastructure development. For the last two decades, Ghana has transformed and year-on-year we are becoming a better equipped country in every aspect, from logistics to the road network.
However, there is still a long way to go. The railway network is still under construction, and the road network needs to improve. The Tema port road, which used to be empty, is heavily congested now because of the industrialisation in that area. We need bigger roads in this part of the country.
What is your view on the IMF raising Ghana’s expected GDP growth to 8.8% in 2019?
The prediction of 8.8% GDP growth is a realistic prospect and I think we could achieve double digits with a small push from the government. There are a lot of private investors in Ghana, but the government has to make sure that they support the local industry.
We have to learn from our big brothers in Nigeria, who ban products that they are self-sufficient in. They care for their industry, and we should see the same in Ghana. We are proud to be part of Ghana’s economy and we should see how we could better contribute towards that.
Could you walk us through your milestones in Ghana?
B5 Plus is nearly two decades old. When we started, we used to import from neighbouring countries such as Togo, Ivory Coast and South Africa, as well as others around the world. Today however, we have become a net exporter to the whole of West Africa.
We have transformed the “Made in Ghana” steel products. We are growing, and for steel our motto is “You name it, we have it.” We can do angles, channels, beams, iron rods, girders, section steel, galvanised aluminium, seamless, round, square, etc. We are a one-stop-shop for steel.
We have branches across the major regions of Ghana. Our clients can reach us anywhere in the country. We have the biggest distribution network – of 1,000 distributors – which makes it very easy for anyone doing construction in Ghana to get our steel products. We believe in providing quality goods at a competitive rate to their doorstep. That differentiates us from other organisations.
What is the key to competing while delivering quality products?
Every market has become more competitive, and people often forget quality and focus on the price. Buyers are sometimes misled, so we try to give our customers the right information. That is why we have a customer care centre, where we guide the customers so they can understand what the products are. We also allow people to buy small quantities of products, because there is a large demand for that.
You need to educate customers on the difference between different products, so that they understand what products they need. That is one way we stay competitive and stand out. We also created the Entrepreneurs for Ghana initiative, which leverages our large network of distributors and gives entrepreneurs a credit facility and opportunities to do business. We have many success stories in which businesses have multiplied and created new businesses. That is the core strength of B5 Plus: We create entrepreneurs.
Are you expecting to match the demands of the growing oil and gas industry?
We are, 100%. Where we are sitting now is the prefabrication plant we have built, and it was built in a nine-month record time. Everyone would say it is impossible to even bring the materials into the country within that time. We formed an expert team, who taught the local Ghanaians the skills, and now we can do any type of fabrication. We have an 80-tonne crane here, along with many other cranes.
Ghana’s entrepreneurs are ready to deliver, and we need government support. With this support we can completely transform the local industry. Special grades are an important aspect; we supply the mines with different steel products. Oil and gas and mining are the same: They are particular about the grades of steel.
The more you are in touch with a particular industry, the easier it is to understand and meet their requirements. It is important for there to be more dialogue between the oil and gas industry and industries like ours. We are well equipped and carry a huge stock of steel and different types of products. All we need is for the oil and gas industry to get in touch with us, and we will be able to deliver the quality products they need to their doorstep.
How important is technology to your operations?
Quality comes with technology. Today, B5 Plus is the Ferrari of the steel industry. That is why we are delivering steel to all the major projects in Ghana. Our fabrication plant has a lot of automation and state-of-the-art machinery. We are competing with companies from all over the world; we do not want to be anything less. We have to have the best quality machinery to produce the best quality steel so that when we sit with the big global players in the industry, they will see us as equals.
What CSR projects do you have?
We prioritise giving back to society, and education is particularly close to our heart. We support the DPS International School in Community 25, one of the best schools in Ghana. We offer free education, medical camps and other social services. We won the Association of Ghana Industries CSR company of the year award and we are part of GIPC’s Club 100.
We provide directly and indirectly over 10,000 jobs, and with this new project it will be more than 15,000. We are also one of the biggest taxpayers in the steel industry. What we need is for the government to recognise the players who make a difference. We are proud to say that two years ago President Nana Akufo-Addo honoured us for our contribution to Ghana’s steel industry, but a lot more can be done. That will only keep pushing us to do better and keep contributing.
Where would you like to see Ghana’s manufacturing sector in five years’ time?
It will progress well. The government’s One District, One Factory initiative will give the sector a positive boost. We are very optimistic. We believe in Ghana and we look forward to seeing the “made in Ghana” dream come true. With the government’s support we can achieve great things.