Quantum refutes foreign ownership claims as it stresses investment in domestic LPG infrastructure
Quantum, Sage and Arch Holdings Limited, has refuted assertion that it is a foreign company.
Clarifying its ownership structure, Quantum vehemently denied recent media reports mischaracterising it as a foreign entity.
The company pointed out that it is a homegrown business with a deep-rooted commitment to the nation and active participation in the government’s Cylinder Recirculation Model (CRM).
“We are 100% Ghanaian-owned entities, directly employing over 2,000 Ghanaians, and have been active in Ghana’s petroleum sector since 2009,” a letter signed by Samuel Bonuedie, Head of Brands & Communications at Quantum Group, stated.
The company emphasised its vertical integration within the petroleum downstream value chain, a structure permitted by the existing regulatory framework.
Below is the full statement
Cylinder Recirculation Model Implementation and Matters Arising
Rejoinder by Quantum, Sage and Newgas
For Immediate Release
Accra, 13th August 2024 – Our attention has been drawn to recent publications in the media that incorrectly categorize Quantum and its associated companies as foreign-owned businesses. These reports also create the misleading impression that our Group is opposed to the involvement of LPG Marketing Companies (LPGMCs) in the Cylinder Recirculation Model (CRM).
We wish to clarify that Quantum and its associated companies, including, Newgas which operates the bottling plant are subsidiaries of Arch Holdings. Our companies are vertically integrated in different segments of the petroleum downstream value chain as permitted by the existing regulatory framework. We are 100% Ghanaian owned entities, directly employing over 2,000 Ghanaians, and have been active in Ghana’s petroleum sector since 2009.
In 2014, the Government of Ghana committed to the Sustainable Development Goals (SDGs), one of which is the promotion of clean cooking for all by 2030. This goal aims to transition households using wood fuels to LPG, as the continued use of wood fuels leads to serious health issues which kill many, costing the nation in both human and financial resources. It also leads to massive deforestation, contributing to the increased desertification of the Country.
In October 2017, Government issued directives to the National Petroleum Authority (NPA) to implement the Cylinder Recirculation Model as the vehicle for the distribution of LPG particularly for household use to increase access and improve safety. Consequently, the NPA developed a new license framework for a new market structure and invited interested companies to apply for licenses to build bottling plants. As with other licenses issued by the NPA, this process is transparent and open to all interested companies.
The NPA grants the license once the applicant meets the set criteria, similar to how licenses for Bulk Import, Distributing and Export Companies (BIDECs), Oil Marketing Companies (OMCs), and Liquefied Petroleum Gas Marketing Companies (LPGMCs) are issued.
Our Group made the strategic decision to apply for a license to build and operate a bottling plant at a time when other more resourced companies declined to participate due to the financial risks involved. We have been committed to this project since 2018, even through the COVID-19 pandemic, and completed the plant late last year. Consequently, our bottling plant company under the name Newgas, has obtained the necessary permits to operate the plant and begin filling cylinders to operate under the CRM as our license permits.
It is important to clarify that the bottling plant license does not permit the plant to engage in the distribution and retailing of LPG, which remains the exclusive domain of OMCs and LPGMCs. The OMC/LPGMC license allows holders to distribute LPG nationwide, a regulation that has been in place for years. An LPGMC or OMC can, based on their business strategy, choose to operate in the Industrial LPG, Commercial LPG, Domestic LPG, Auto LPG segments, or a combination of these. Accordingly, we have sought to distribute our filled cylinders along with OMCs and LPGMCs that have expressed interest in partnering with Newgas.
The main goal of the Cylinder Recirculation Model is to increase LPG penetration and accessibility. It is Government’s objective that OMCs/LPGMCs develop over 5000 Cylinder Exchange Points across the country to support the CRM. Bottling Plants are therefore required to collaborate with OMCs and LPGMCs to help achieve this. It is the prerogative of the LPGMC or OMC however, to choose which Bottling Plant to work with or to continue operating the current filling system. We have already signed agreements with some OMCs and are in active discussions with other OMCs and LPGMCs to develop more Cylinder Exchange Points.
Another significant benefit of the CRM is the continuous validation, maintenance and recertification of LPG cylinders to reduce the risk of explosions in homes. Under this model, cylinders collected from the market will be sent to the Ghana Cylinder Manufacturing Company for maintenance and re-validation, creating a steady stream of business for the national company and keeping their wholly Ghanaian staff in employment.
The CRM aligns with Ghana’s commitment to the Sustainable Development Goals (SDGs), particularly the goal of ensuring access to affordable, reliable, sustainable, and modern energy for all by 2030. By promoting clean cooking solutions, the CRM supports national efforts to improve public health, protect the environment, and advance social development. Our Group is committed to do its best within the existing regulatory framework to make it a success.