By Jeorge Wilson KINGSON
Three indigenous companies listed for divestiture by the government close to 10 years are yet to attract private investors.
The companies, which were placed on divestiture for capital injection to make them operational, include the Aboso Glass Factory, Bonsa Tyre Company and the Subri Industrial Plantation Limited.
The Minister for Trade and Industry, Hannah Tetteh, told parliament last week that though the initiative was to obtain a potential joint venture partnership for each of them, the myriad of challenges associated with their operations has made them unattractive to investors.
“In view of the identified challenges that strategic investors are likely to face the Ministry of Trade and Industry will collaborate with the Divestiture Implementation Committee (DIC) to find partners that will either be in position to revamp the operations of the company or implement a new project that will ensure that their existing assets are efficiently utilized,” Tetteh stated.
She said the main reason why some of them are still on the divestiture list is the limited investor interest in the enterprises, adding that the DIC has already re-advertised the companies and is expecting completed registration of interest forms back by the end of this month.
The Aboso Glass Factory, a wholly government owned entity, was commissioned in 1966 but shut down two years later due to operational difficulties. Though it was rehabilitated in 1976 it was again shut down in 1988 due to low productivity and losses. It was finally closed down in 2001. Tropical Metalic Construction Company (TMMC) leased the company along the line, but was also forced to shut down due to its failure to settle an electricity bill of GHc 1.4 million and liabilities totaling GHc 2.550 million.
Bonsa Tyre Factory is the only pneumatic tyre manufacturing company in Ghana and one of three in the West African sub region, while the other two are in Nigeria.
The African Development Bank (AfDB) provided the government with a loan facility of US$ 30.70 million for its rehabilitation in 1989 after it was briefly run by Firestone Tyre and Rubber Company of the United States of America.
The AfDB was for external payments only, covering offshore spares, machinery and technical services. Internal expenditure was to be funded from government matching fund of US$ 5.4 million and Internally Generated Fund (IGF) of the factory.
The company was however listed for divestiture in 1996, and formally closed down 2000 and all employees declared redundant due to serious liquidity problems. The plant has remained idle since then.
Its current assets are valued at US$ 26.8 million with its local liability portfolio standing at Ghc 1,083,935, and external liability at GP 58,000. The DIC takes care of the salaries of the company’s 22-man caretaker team.
The Subri Industrial Plantation Limited (SIPL) was set out about 25 years ago to produce fibrous raw materials to feed a pulp and paper mill at Daboase in the Mpohor Wasa East District. It has been on the divestiture list since 2002.
Five local financial institutions joined government to promote the company when it was first set up. They include The Social Security and National Insurance Trust (SSNIT), Ghana Commercial Bank (GCB), Agriculture Development Bank (ADB), SG-SSB Bank and the National Investment Bank (NIB). Government’s share in the company totals up to about 71.5%.
The company’s present assets include an existing plantation of over 5,000 hectares of an industrial raw material resource, 13,000 hectares of forest reserve, site for nurseries with water dam, industrial estate comprising office blocks, staff bungalows, clinic, schools, saw mill and kiln.
Its liabilities covering indebtedness to various companies, staff terminal benefits, bank overdraft, provident fund and staff severance award totals GHc 2,915,010.80.
Currently, there are 67 workers out of the workforce of over 140 who are maintaining the company as caretaker staff so as to keep the factory running and make it attractive to investors.
The minister said the original objective of installing a pulp plant could not be executed due to lack of funds coupled with the result of a re-appraisal of the project which showed that the land area earmarked for the cultivation of the raw material would not be able to sustain the project.
Three indigenous companies listed for divestiture by the government close to 10 years are yet to attract private investors.
The companies, which were placed on divestiture for capital injection to make them operational, include the Aboso Glass Factory, Bonsa Tyre Company and the Subri Industrial Plantation Limited.
The Minister for Trade and Industry, Hannah Tetteh, told parliament last week that though the initiative was to obtain a potential joint venture partnership for each of them, the myriad of challenges associated with their operations has made them unattractive to investors.
“In view of the identified challenges that strategic investors are likely to face the Ministry of Trade and Industry will collaborate with the Divestiture Implementation Committee (DIC) to find partners that will either be in position to revamp the operations of the company or implement a new project that will ensure that their existing assets are efficiently utilized,” Tetteh stated.
She said the main reason why some of them are still on the divestiture list is the limited investor interest in the enterprises, adding that the DIC has already re-advertised the companies and is expecting completed registration of interest forms back by the end of this month.
The Aboso Glass Factory, a wholly government owned entity, was commissioned in 1966 but shut down two years later due to operational difficulties. Though it was rehabilitated in 1976 it was again shut down in 1988 due to low productivity and losses. It was finally closed down in 2001. Tropical Metalic Construction Company (TMMC) leased the company along the line, but was also forced to shut down due to its failure to settle an electricity bill of GHc 1.4 million and liabilities totaling GHc 2.550 million.
Bonsa Tyre Factory is the only pneumatic tyre manufacturing company in Ghana and one of three in the West African sub region, while the other two are in Nigeria.
The African Development Bank (AfDB) provided the government with a loan facility of US$ 30.70 million for its rehabilitation in 1989 after it was briefly run by Firestone Tyre and Rubber Company of the United States of America.
The AfDB was for external payments only, covering offshore spares, machinery and technical services. Internal expenditure was to be funded from government matching fund of US$ 5.4 million and Internally Generated Fund (IGF) of the factory.
The company was however listed for divestiture in 1996, and formally closed down 2000 and all employees declared redundant due to serious liquidity problems. The plant has remained idle since then.
Its current assets are valued at US$ 26.8 million with its local liability portfolio standing at Ghc 1,083,935, and external liability at GP 58,000. The DIC takes care of the salaries of the company’s 22-man caretaker team.
The Subri Industrial Plantation Limited (SIPL) was set out about 25 years ago to produce fibrous raw materials to feed a pulp and paper mill at Daboase in the Mpohor Wasa East District. It has been on the divestiture list since 2002.
Five local financial institutions joined government to promote the company when it was first set up. They include The Social Security and National Insurance Trust (SSNIT), Ghana Commercial Bank (GCB), Agriculture Development Bank (ADB), SG-SSB Bank and the National Investment Bank (NIB). Government’s share in the company totals up to about 71.5%.
The company’s present assets include an existing plantation of over 5,000 hectares of an industrial raw material resource, 13,000 hectares of forest reserve, site for nurseries with water dam, industrial estate comprising office blocks, staff bungalows, clinic, schools, saw mill and kiln.
Its liabilities covering indebtedness to various companies, staff terminal benefits, bank overdraft, provident fund and staff severance award totals GHc 2,915,010.80.
Currently, there are 67 workers out of the workforce of over 140 who are maintaining the company as caretaker staff so as to keep the factory running and make it attractive to investors.
The minister said the original objective of installing a pulp plant could not be executed due to lack of funds coupled with the result of a re-appraisal of the project which showed that the land area earmarked for the cultivation of the raw material would not be able to sustain the project.
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