Shareholders of Aluworks Limited have approved a resolution to allow the company?s board begins the process of raising US$10m through a rights issue later this year.

The funds will be used to bolster Aluworks? working capital, including rehabilitating the existing cold mill and enhancing its use to produce other new aluminium products.

The rights issue will help reduce the bank?s dependence on high-interest bank borrowing, chairman of the board, Kwadwo Kwarteng, said at the company?s annual general meeting in Accra.

In connection with the move, the shareholders also approved a resolution to increase the company?s authorised shares from 300 million to 1 billion ordinary shares.

Mr. Kwarteng said the company had also secured a US$10m loan to purchase and install a second cold mill to increase capacity and stabilise production.

Aluworks recorded a significant increase in its throughput from 4,784 tonnes in 2010 to 8,754 tonnes in 2011, representing a growth of 83%.

The company, according to Chief Executive Officer Kwasi Okow, was able to reduce its net losses significantly from GH?7.4 million in 2010 to GH?3.5 million last year, after charging financing expenses of GH?3.7 m.

In 2011, it exported 3,852 metric tonnes of aluminium ingots, earning US$13.5million, up from 669 metric tonnes and US$2.2 m in 2010. Most of the exports went to West Africa, particularly Nigeria.

?I have to report that we have succeeded in keeping to the very high quality we are known for and that was the main reason for the increased sales into West Africa, especially Nigeria, during the year.

Aluworks? quality policy is to achieve sustained, profitable growth by providing good-quality aluminium cold rolled products which consistently satisfy the needs and expectations of its customers,? Mr. Okow said.

The board chairman said with Volta Aluminium Company (VALCO) coming on stream, challenges associated with supplies have virtually been eliminated. ?VALCO has supplied our company with molten aluminium and ingots from which our products have been manufactured since February 2011.?

He said Aluworks? most significant challenges have been ?almost resolved,? adding it is now on the verge of the strong growth path it has sought over the years.

?Foreign cheap products on the local markets have always posed challenges to our sales efforts. The management of the company has tackled this problem with all its might. Various steps have been taken and the government has responded favorably to the elimination of some of these challenges.?

He added however that the ongoing world recession has been affecting world demand for aluminium products, and the instability of the cedi has contributed to high finance costs.

?We hope that the Bank of Ghana will be able to get to grips with the dynamics of the country?s forex management during 2012 so that despite it being an election year, we will see some stabilisation.?

By Benson AFFUL

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