DISTRESS CALL...Volta Star Textile seeks support (LEAD STORY, GRAPHIC BUSINESS, JULY 27, 2010)

Story: Samuel Doe Ablordeppey & Dela Russel Ocloo

ONE of Ghana’s post independence assets, the Volta Star Textiles Company formerly Juapong Textiles Factory is walking a tightrope, tottering on the brink of total collapse if the company is not quickly salvaged with fresh capital.
The need for a fresh capital stems from a multiplicity of factors including the need to replace obsolete equipment, the ability to purchase raw materials, other inputs and spare parts for maintenance in order to get the factory to optimise its capacity and become competitive.
Just before 2009, the company needed a fresh capital injection of GH¢6 million to enable the company purchase raw materials for its operations, cater for parts to maintain its mostly obsolete machines, buy chemical and pay workers.
The government, which solely owns the company, approved only GH¢3 million, out of which GH¢2 million was disbursed before the 2008 elections. Late release of the funds coupled with exchange rate losses, rendered the meagre working capital a non-starter and inadequate to effect any meaningful turnaround in the company.
Factory sources told the GRAPHIC BUSINESS that management had made several proposals to the government for the injection of working capital and that the current proposals were receiving serious attention from the sector ministry, the Ministry of Trade and Industry.
“We need a certain critical financial support to be able to ran the factory on commercial basis because lack of funds means inefficient operations that lead to losses,” the Acting Technical Director of the company, Mr Evans Agyagbo said when the GRAPHIC BUSINESS team visited Juapong where the factory is located to acquaint itself of the fate of the biggest spinning and weaving textiles facility in the country.
The Juapong Textiles Factory was established in the 1960s to supply plain cloth (gray baft) to other textiles companies in the country as part of an integrated textiles industry, which used to be huge in the country.
With installed capacity of producing 64,000 yards of gray baft a day on a 24-hour production cycle, the Juapong Textiles, which earned a new Christened name, Volta Star Textiles Company in May, 2007 after a revamping exercise, currently runs a single production cycles and churns out only 7,000 yards a day.
At full production blast, Volta Star Textiles could employ about 1,000 but it now can only absorb an average of 321 persons, a situation that has left the once buzzing Juapong township bereft of its citizens.
A visit to the factory revealed that a large number of the spinning and weaving equipment of the company were lying idle. At the time of the visit on July 21, only 27 out of the 86 spinning machines were working.
Similarly, at the loom where the yarns combined to produce cloth, only 300 out of 900 machines are operational, as idleness and lack of parts to repair broken-down machines have caught up with the rest.
Mr Agyagbo stated that serious production bottlenecks had to be removed in the short term to sustain the operations of the company.
The bottlenecks include obsolete equipment which needed to be replaced, the need to use energy efficient equipment to improve the company’s energy factor, a reliable fleet of transport which is currently left with one Pick Up, and the wherewithal to purchase the raw materials and other inputs.
With the requisite capacity to meet the needs of the local textile industry, the acting technical director, who is also a textiles engineer said the company could be viable and compete favourably with gray baft from every part of the world.
The workers of the company welcome any strategic investor or any attempt to list it on the Ghana Stock Exchange (GSE) to raise additional capital and restore the operations of the company to profitability.
Already, the company which was incorporated in May 2007 to take over the assets of the former Juapong Textiles, inherited a debt of GH¢490,000 owed to the Electricity Company of Ghana (ECG), which has already led to one power cut at the factory premises last month.
It was only after the company had paid GH¢43,000 with the assurance to add GH¢10,000 to its monthly electricity bills that the ECG agreed to restore power after 15 days that led to the loss of GH¢100,000 revenue, and an unspecified amount of work-in-progress losses.
For a company that records a turnover of about GH¢120,000 a month, the current increases in electricity tariffs mean that overhead would cover about half of its monthly turnover.
“Our wage bill has recently gone up and the prices of cotton and chemicals have also gone up. For the tariffs to stand like that means we cannot pay labour and this situation has the potential to grind the entire operations of the company to a halt,” Mr Agyagbo told the GRAPHIC BUSINESS.
He appealed to the PURC to take a second look at the level of increases in the recently adjusted utility tariffs.
The acting technical director who has started his career with the company said Volta Star could once again shine and regain its glory if resources were made available to improve operations.
He was, however, full of praise for the Minister of Trade and Industry, Ms Hanna Tetteh, for her untiring efforts at securing funding to revive the operations of the factory, which had until recently given direct and indirect jobs to about 5,000 people in and around the Juapong area in the North Tongu District of the Volta Region.
To a large extent, however, the condition of Volta Star Textiles Ltd is in consonance with the fate of the entire textiles industry, which is reeling under indiscriminate importation of textiles products, smuggling and an abhorrent copying of made-in-Ghana designs for reproduction in China. GB

DISASTER MANAGEMENT COMMITTEE INAUGURATED AT NUNGUA (PAGE 43, JULY 21, 2010)

Story: Della Russel Ocloo, Tema



THE Ledzokuku Municipal Assembly (LEKMA) has spent a total of GH¢A2300,000 on
the desilting of major drains in the municipality over the past 18months.
Municipal Chief Executive of the assembly disclosed this at a ceremony to
inaugurate an 11member municipal disaster management committee at Nungua, a
suburb of Accra.
The committee which is chaired by the chief executive, Mr Daniel
Amartey-Mensah has been tasked to help facilitate the formulation and
implementation of policies aimed at mitigating incidents of disasters in the
municipality.
Mr Mensah indicated that, the removal of structures on water courses would
be pursued in earnest while abandoned dams would be rehabilitated as parts
of the mitigating measures towards fighting the menace.
Membership of the committee includes the Members of Parliament for Ledzokuku
and Krowor constituencies, Dr Quaye Kumah and Nii Nortey Duah.
Others includes, Lt Col M. Mustapha of the 48 engineers=92 regiment, DSP
Samuel Punobyin and Mr Kofi Simmons, both district commanders of the police
and fire services, Dr Liticia Wiafe, municipal health director and Mr Isaac
Kwarfo, municipal information officer.
The rest are, ASP Patience Awetey, Mr Richard Narh and James Narh, assembly
members for Blekese and Ashietey Akomfrah electoral areas respectively, with
Mr Mohammed Tchafram, Municipal NADMO Coordinator as secretary.
Inauguration the committee, Greater Accra Regional Coordinator of the
National Disaster Management Organisation (NADMO), Mr Winfred Nomotey-Tesia
indicated that, bringing on board various stakeholders with varied
expertise, would offer NADMO an opportunity to be proactive in dealing
issues that trigger disasters.
According to him, incidents disaster damage can be minimized through zoning
by ensuring that wetlands, water courses and earthquake belts were zoned
appropriately by employing the right type of engineering in the usage of
such lands.
He tasked members to be guided by the prevention pays slogan adopted by
NADMO towards forestalling disasters across board, noting that, the Sunday
20th June floods confirms that, poor planning increases the impact of
disasters.
"You do not have to wait for the livelihood and lives of people to be eroded
by a major disaster before moving in with rice and beans in the name of
relief", Mr Tesia stated.
"It is in this light, NADMO would continue to advocate for a legislation to
be included in the Town and Country Planning committees", he said.
He also charged the district, municipal and metropolitan chief executives
who by legislation are the chairpersons of disaster management and town
planning committees to co-opt NADMO coordinators to these committees, as
their roles would help to ensure that disaster risk reduction strategies
were adopted in the issuance of permits for the sitting of structures.
Mr Tesia also charged the committee to put forward a municipal contingency
plan towards the realization of its goals.
The Municipal NADMO Coordinator, Mr Mohammed Tchafram in his welcome address
was optimistic, the committee=92s inaugurations would help towards a reduction
of flooding within the municipality.
He assured the committee would focus on the mobilization of resources to
build the capacity of NADMO as an institution to be able to respond to
disasters when they occur.
He bemoan, shoddy works in the execution of contracts coupled with poor
engineering have left negative effects on schools, major roads, bridges and
culverts.
The impact on these structures would have been less if stakeholders had
corporate fully with NADMO.