BOST depot upgrade project ready in September
THE First Phase of the Depot Upgrade Project of the Bulk Energy Storage and Transportation Company Limited, covering the Accra Plains and Kumasi Depots, is scheduled for completion by September.
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Once completed, the project will enable a 150% increase in the company’s depot throughput and further improve asset utilisation.
Addressing the Annual General Meeting (AGM) of the company in Accra last Tuesday, Board Chairman of the company, Ekow Hackman said: “The Depot Upgrade Project, which aims to enhance operational efficiency by reducing turnaround times of Bulk Road Vehicles (BRVs) and increasing throughput of fuel products through automation, remains the cornerstone of our strategic plan.”
He said the company has also completed the Front-End Engineering Design (FEED) for the Tema Kumasi Pipeline with the Engineering, Procurement and Construction (EPC) phase planned for 2025.
This project will be critical in reducing the company’s carbon footprint while diversifying the it’s revenue streams.
“The search for strategic partners to construct this vital infrastructure, which will further enhance our operational capacity and support government policies such as job creation, is underway.
As we near the completion of the 2020-2024 strategic plan the company is poised to roll out the next phase of its growth strategy. The focus will be on the impact of the energy transition on the company’s business and the implementation of initiatives that ensure the sustainability and viability of BOST,” he said.
Mr Hackman said the company is committed to embrace technology, improve services, and diversify products in alignment with the government’s carbon reduction and digitalisation agenda.
“Vital for the future are the addition to the company’s infrastructure through the Tema to Kumasi pipeline, the 12 inch Pipeline from Tema to Akosombo; the diversification of its product line to include Liquefied Petroleum Gas (LPG) for which the FEED has been completed; and the acquisition of additional marine barges to enhance the capacity of the company’s export corridor to the north of the country.
There are also plans to complete the automation of all remaining depots once the Accra Plains and Kumasi depots have been completed,” Mr Hackman added.
Financial performance
The overall financial performance of BOST continued to see remarkable improvement as a result of prudent management.
The company’s equity position strengthened from a negative position of GH¢248 million in 2021, to a positive position of GH¢277 million in 2023, thus providing a solid foundation for future growth.
A profit of GH¢208 million was recorded in 2023. This compares to GH¢342 million in 2022 and GH¢160 million in 2021, a cumulative profit of GH¢710 million over the past three years.
Gold for oil and profitability
“In emphasising this trend of profitability, it is important to highlight the unique role of BOST in the Government’s GOLD FOR OIL (G4O) Programme. G4O, introduced under the administration of the Bank of Ghana, was aimed at mitigating the impact of Foreign Exchange fluctuations and rising inflation.
Mr Hackman said its operation in 2023 resulted in a reduction in the price of a litre of diesel from over GH¢23 to an average of GH¢14.
“The reduction in profitability of the company as compared to 2022 should therefore be seen in the context of government’s deliberate policy to cushion the Ghanaian consumer from the adverse effects of imported inflation.
This could not have been achieved if BOST were a purely privately owned entity. The management of the company is to be commended in playing this vital role in assisting in the implementation of this strategic government policy whilst at the same time meeting the operational and investment obligations of the company,” he said.
Volumes of fuel products traded by BOST increased by 235% from 318.3 million litres in 2022 to 1.1 billion litres in 2023.
Fee for trading
Under the G4O programme BOST received a fee for trading the requisite volumes of products from Bank of Ghana with revenue recognition as well as expenditure passing to the Bank of Ghana.
This was unlike the company’s usual trading activity where revenues and costs of the fuel trade are recognised in the company’s books.
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Nevertheless, Mr Hackman said the increase in turnover represented by the G4O trade was of a magnitude of 237% from GH¢3.02 billion which was achieved in 2022 to GH¢10.17 billion in 2023.
The company’s market share increased to 29% in 2023 from 8% in 2022. The value of fixed assets also increased from GH¢1.478 billion in 2022 to GH¢1.620 billion in 2023.
Looking forward
Managing Director of BOST, Dr Edwin Provencal said the company’s strategy is yielding the required gains for the shareholder and the Ghanaian taxpayer.
“I believe that the company has a very bright future. With our strategy, we are ready to embrace the great opportunities that lie ahead, and we are committed to continue delivering value for all our stakeholders,” he said.
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