Business in Cameroon | Plans are already ongoing for the restructuring of state steel producer ALUCAM, according to information disclosed by the Ministry of Mines, Industry, and Technological Development (MINMIDT).
Following its merger with subsidiary SOCATRAL, negotiations were initiated with the International Islamic Trade Finance Corporation (ITFC) to raise US$15 million (about XAF8.7 billion), Minister of Mines Gabriel Dodo Ndoké told MPs during the November 2021 budget session. According to the government official, the funds will serve as working capital to ensure a regular supply of raw materials and renovate currently non-operational equipment.
For years now, ALUCAM has been facing operating challenges. As per the most recent figures (2019), the company’s financial liabilities amount to XAF16.8 billion and the Ministry of Finance even lists it as one of the state firms facing liquidation risks.
According to the 2019 report of the technical committee for the rehabilitation of state and para-public firms, ALUCAM’s operations have been slowing down due to an incident that occurred in January after a sudden power shortage that affected its production equipment.
Its cash flow problems started in late 2014 when its strategic partner Rio Tinto divested from it by selling (in 2015) the 46.7% stakes it had in ALUCAM to the government of Cameroon. Since then, Cameroon, which has become the sole shareholder, has been trying to attract a new investor for the aluminum producer whose performances are continually declining. But no investor seems attracted to the company, which is also affected by the drop in commodity prices.