The Chairman of the board of directors of Pioneer Aluminium Factory (PAF), Mr. John Awuku Nyarko, has said that the economic and trading environment has been difficult, despite improvement in some key economic indicators.

He stated that Ghana's real domestic product grew 4.5% while inflation dropped further to 15.2% from 21.9% in 2001. The cedi however depreciated by 13.1% as against government's target of 5.3%.

Mr. Awuku Nyarko made this statement when he presented the annual report and results of the year 2002 to shareholders at the annual general meeting of Pioneer Aluminium Company limited.

He explained that last year more garage operators entered the market and offered small sets of cooking utensils at cheaper prices, putting a heavy downward pressure on profit margins.

On the production and sales performance, the chairman said the production output for the year was below target at 692mt from 823mt in 2001.

He noted that the erratic supply of raw material was the main factor, which limited production output, adding that overall sales performance for the year was below expectation, achieving volume of 693mt and a turnover of ?22billion.

Domestic sales performance, he stated, was adversely affected by acute stock out on key products throughout the year.

Mr. Nyarko disclosed that the year ended cumulative price increases of 20% on Pioneer Aluminium Factory products necessitated by uncompetitive cost of sales resulted in a 6% to 16% price differential between PAF products and its competitors.

On financial performance, he said despite decline in overall sales performance, trading profit for 2002 amounted to ?693million before tax and increase of 7% over 2001.

In addition, net profit for last year was ?464million,12% over that of 2001.

This improvement, he emphasized, could be attributed to better management of assets and credit, overall tighter spending control, which resulted in total expenditure for 2002, decreasing by 9.4%, compared to that of 2001.

The chairman pointed out that their objective for the year 2003 is to regain their lead position in the aluminium hardware marketing in Ghana, aggressively enter regional export markets and diversify their product offerings to the market.

In order to achieve these goals, he said, they would rationalize their product mix and focus on high volume margin items, ensure raw material availability, optimize their operations to improve product quality and reduce cost of sales.

The auditors of PAF in their report said proper books had been kept and the financial statements, which are in agreement, gave a true and fair view of the financial position of the company as at the end of 2002 and of the results of its operations and cash flows for the year ended.