Stanbic Bank has signed a Memorandum of Understanding (MoU) with Chinese outlet, TIAST Group to aid value addition to Ghana’s cassava.
Under the agreement signed on Wednesday, September 9, 2020 in Accra, TIAST and Stanbic Bank strategic cooperation, will lead to the provision of 2 to 5 years of equipment finance lease service.
Stanbic Bank is to make available at least 85 percent of the amount needed to purchase a processing equipment, with the loan repayment spread over a period of five years.
Delivering a speech shortly before signing the MoU, Lisa Hao, Chief Business Officer at TIAST Group, says the support scheme by her outfit and Stanbic Bank the service “is different from general commercial loans, it is a complete investment closed-loop financial support service.”
She stated that as a basic raw material, cassava starch is widely used in food, medicine, paper making, textile, oil drilling, building materials, feed and other fields.
According to her, at present, there are more than 2000 kinds of starch-based products in the world.
She stated that the demand of starch on the Chinese market is almost reach 3 million tons and has the trend of increasing year by year.
“However, it is a pity that the area where cassava can be grown in China is very limited, and the yield is far lower than that in Africa,” she said.
She added that “when I was investigating in Central Region, cassava growers dug a fresh cassava growing for 10 months on the spot, and one plant had more than 10 fresh cassava roots, it’s a mazing weighing 20 kilograms for that. Such a high yield is really admirable.
Furthermore, Madam Hao noted that in Ghana, cassava can be grown all year round, regardless of the season, that means we can make a lot of money from the international market by processing it.
“You know fresh cassava, processed into native starch or HQCF, selling price will increase about 10 times than the fresh roots, 30 times if it’s for modified starch, and 35 times if for alcohol,” she noted while highlighting the importance of value addition.
However, she says, Africa is not getting a good return on such valuable investment.
“Why? We found that sometimes, because of the shortage of consumables, customers have to tolerate low levels of production efficiency.In some cases, due to the shortage of spare parts, when it’s damaged, even it just worth 50 Cides it may cause the entire production line to be shut down for a long time. And when it shutdown, the customer have to wait for a month or two, let foreign engineers to check and repair because of less skilled, trained technical engineers here. It’s even more unfortunate , the service life of equipment is only about 1/3 of the design service life because there is no standardized technical service to maintenance equipment regularly,” she said.
In addition to equipment, African customers need more localized supply of consumables and spare parts, localized service of installation, commissioning and regular maintenance of equipment, and standardized service for technical personnel training, she said.
Based on these characteristics and Ghana as the center of West Africa, we have designed the “One seed, two Bridges, three cradles” development strategy for Cassava industry, according to her.
“If we only rely on buying equipment from other countries to processing cassava, without our Machinery Factory, any losses will be incurred in the installation and commissioning of the Machinery, spare parts and other after-sale services. Therefore, we are building equipment factories at DAWA to ensure equipment manufacturing, localization of spare parts supply and standardization of technical services. This factory is a seed for the development of cassava industrial chain. At the same time, we also set up 2 bridges for technical research and investment. In addition, we set up 3 cradles for talent training, including cassava cultivation, processing technical services and international trading practice,” she indicated.
Cassava processing is an important part of the industrial chain, she said, adding that it can expand production capacity, and encourage more farmers to plant cassava, more raw material supply of cassava, at the same time also will further promote the expansion of production capacity, to have pricing power in international market, in order to take advantage in the international market competition, get considerable gains.
According to the customer’s plant scale, we will help customers to design capacity, match the standardized production line equipment, to provide spare parts and consumables supply localization, localization production line inspection services, the standardized training of local technicians, and off take service, part of the profit from the sales of the product is paid monthly for bank’s loan.
Under this financial support, we just need around 1/3 budget to set up the factory now, if you want, you can set up 3 factories together and your profit also 3 times.
I think at this moment, there will be all kinds of questions about our business model and combined with your own situation, because of the time and the covid-19 control conditions, we prepared for you a Question List Sheet, please write down your questions, and deliver it to our staff, after the meeting we will reply it one by one for sure.
Agriculture is the foundation of Africa’s economic development, and there are a lot of young people, and we believe that in the field of cassava processing, with our financial and technical support, more young people will be able to get skills training and find jobs, and the value of that is unlimited. So, let’s make more for Agriculture together, she assured.
Chief Executive Officer (CEO) of Stanbic Bank, Alhassan Andani, in a speech, said Stanbic Bank will work with TIAST to ensure that the cassava market in Ghana was properly developed.
He expressed the hope that Stanbic Bank and TIAST will focus on organizing a Ghana Cassava Exporters Group.
He noted the enormous opportunities in the cassava sector in Ghana.
In a speech read on his behalf, the Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, said “it is gratifying to know that the partnership between TIAST and Stanbic Bank is making cassava processing equipment available to cassava value chain actors.”
He added that “we have huge opportunities to be exploited through this initiative which will go a long way to reduce post harvest loses, create jobs, and income.”
By Melvin Tarlue