Govt bails out Volta Star Textile LTD

THE government has bailed out the collapsing Volta Star Textile Limited (VSTL) with a GH¢3 million funding from the Export Development and Investment Fund (EDIF).
The company, presently operating at 20 per cent of installed capacity, was built by Ghana’s first President, Dr Kwame Nkrumah, and it started operations in 1967 under the name Juapong Textiles Limited.
At full capacity, the company will produce 1.8 million yards a month and employ between 1,200 and 1,500 people, mostly residents of Juapong in the Volta Region.
The Executive Secretary of EDIF, Mr Collins Boateng, after a facility tour of the company yesterday, expressed optimism that the rescue package would be the turning point for the company after the exit of multinational companies that were partnering the government in the company’s sustenance.
The financial package, he noted, would be used in purchasing sufficient raw materials and worn-out equipment for full production, the payment of utility bills and also ensure that the salaries of workers were adequate and paid on time.
He said companies, including Ghana Textile Printing (GTP), Akosombo Textiles Limited (ATL), Printex and some flour mills had shown interest in the company’s products.
The Works Manager of VSTL, Mr Evans Agyagbo, acknowledged the fact that the major handicap was the lack of working capital but said after several proposals made to the government through the Ministry of Trade and Industry, the company could once again operate at full capacity.
He recalled that the company had had a turbulent history characterised by frequent changes in management as a result of the pull out of multinationals like Freedom Textiles Investment Company of Hong Kong, Unilever and recently Vlisco PLC of The Netherlands.
That, he stated, hampered the long-term strategic plans of the company to position itself to be competitive globally, noting that with Vlisco’s exit, the company was slated for private liquidation until the timely intervention of the government.
“The government embarked upon a massive rehabilitation and refurbishment of the company to position it to resume full-scale production and on May 11, 2007 it was inaugurated by President Kufuor,” he added.
Mr Agyagbo indicated that since then the company had been operating on test runs below 20 per cent of installed capacity and engaging close to 300 workers in the process.
He expressed gratitude to the District Chief Executive for North Tongu, the chiefs and opinion leaders in the area for showing interest in the revamping process and assured the board and management of EDIF that the workers and management of the company would be dedicated to their duties in the revamping process.
After the facility tour, the workers of the company expressed their appreciation to the government and the EDIF board for coming to the aid of the company.
Their salary arrears, together with the pay for December, were paid to them.