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Govt takeover of Volta Star Textile spells doom

03
May '10
The government owned Volta Star Textile Ltd. (VSTL) of Ghana has not been able to attain commercial orders since the time it has been purchased by the Government of Ghana from its former partners Vlisco Ghana Ltd.

This is despite the fact that, the company has all the important plants and equipments, well-skilled technical staff, a ready market for finished goods and the capacity to generate more employment, both directly and indirectly.

Currently, the company has a standing order of 19 million yards of grey fabric per year (a basic material for manufacturing textile prints) from Ghana Textile Manufacturing Company (GTMC), but it cannot produce the required quantity of this material, as it lacks sufficient amount of working capital, thereby forcing GTMC to buy the same from some other place.

The company is now running at 30 percent of its manufacturing capacity with 300 workers. After being taken over by the Ghanaian government, the company had received GHc 3 million by the Export Development and Industrialization Fund (EDIF), informed Evans Agyagbo, Head of the Technical Committee overseeing affairs at the factory.

He further informed that, the factory can produce 65,000 yards of grey fabric in a day or 26 million yards in a year, if it works for 24 hours a day at its full capacity. But currently it is working at 30 percent of the capacity, for just 8 hours a day thereby, representing only 8 percent of the plant's efficiency, which provides an output of 7,000 yards of grey fabric in a day.

It requires GHc 14 million in recapitalization to improve the working situation at the factory and make it fully operational, said the Chairman of the technical committee. Furthermore, he also demanded the government to set up a management board and a substantive management team for the company.

Deputy Trades Minister, Mahama Ayariga, during his recent visit to the textile factory, assured the management about the government's determination to revive the textile industry, so that the country could benefit from its great viability.

Fibre2Fashion News Desk - India


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