…But can’t pay workers

The circumstances of Volta Star Textile Ltd (VSTL), a hundred percent owned Government of Ghana firm might not be too different from what pertains in other textile companies in Ghana today.

With all relevant plants and equipment in place, well trained technical staff, ready market for finished products and the potential to generate more employment both directly and indirectly, the factory has however not been able to produce in commercial quantities since Government of Ghana purchased the company from former partners, Vlisco Ghana Ltd. At the moment, VSTL has a standing request from G hana Textile Manufacturing Company (GTMC) for the supply of 19 million yards of Gray baft per year, but due to the lack of working capital they cannot produce, leaving GTMC the option to purchase elsewhere.

The company is now producing at 30% capacity, employing about 300 people. This leaves a huge array of highly trained and experienced people laid off as a result of the pulling out of Vlisco, and those left at post cannot receive salaries regularly.

According to Evans Agyagbo, Head of the Technical committee overseeing affairs at the factory, the company, after Government of Ghana’s purchase was given GHc3 million by the Export Development and Industrialisation Fund(EDIF). “This facility was however woefully inadequate to propel the company to make good use of its installed capacity,” Mr. Agyagbo lamented.

He said at full capacity, working for 24 hours a day, the plant is capable of turning out 65,000 yards of grey baft in a day, or 26 million yards in a year. “However, producing at the current 30% and working for 8 hours, representing only 8 % of plant efficiency the plant turns out 7,000 yards of grey baft in a day.

For this situation to improve and allow the plant operate at full capacity, “We need GHc 14 million in recapitalization,” said the Chairman of the technical committee.

He also asked government to appoint a management board and a substantive management team for the company as a matter of urgency.

According to him Vlisco pulled out because of the cost of production which they could not recoup due to the influx of smuggled cheap textile prints into the Ghanaian market.

Deputy trades minister Mahama Ayariga who was on a familiarization visit to the plant assured the management of government’s resolve to revamp the textile industry as a whole in order to make the country benefit from its overwhelming viability.

He said government has realized that if the industry were operating at full capacity it could provide at least 30,000 jobs for Ghanaians, apart from the growth in GDP that would also be boosted.

The minister who also visited Printex and GTMC came face to face with the deplorable conditions into which the textile industry has been plunged by a combination of undependable utility services, punitive tax regimes and smuggling of cheap foreign textile prints in to the country.

He said government has embarked on a renewed move to ensure that the local textiles and garments industry remains competitive by stepping up measures to forestall the smuggling of such products into the country.

According to Hon. Ayariga government has for that matter, directed the Customs Excise and Preventive Service (CEPS) and other security agencies to be vigilant especially at the ports, and arrest and destroy smuggled textiles and garments.

 “We have also directed CEPS to ensure that all importers of textiles and garments products pay the correct duties and taxes to avoid dumping of such products on the Ghanaian market,” Mr Ayariga assured. The minister said the tax regime and utility management would be looked at again for prioritization in order to make industry work for the overall benefit of the country.

He believes 30,000 Ghanaians would prefer sleeping in the dark, rather than seeing the same number of people lose their jobs. He said government was looking of raising funds to revamp VSTL or getting the appropriate investors to invest into it.

Source: Financial Intelligence (www.fighana.com) Justice Lee Adoboe