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Collapse Of 60 Timber Companies Lead To 70,000 Job Loses
 
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29-Sep-2014  
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About 70,000 jobs have been lost in 10 years in the timber sector, following the collapse of 60 companies.

Revenue generated from the sector has also dropped from 200 million Euros annually to 120 million.

The Chief Executive Officer of the Ghana Timber Millers Organisation (GTMO), Dr Kwame Asamoah Adam said this when he addressed the media on challenges in the sector in Accra,
Dr Adam warned that the industry risked collapse in five years unless immediate and innovative steps were taken to rescue the remaining 30,000 workforce engaged in the 45 companies which he described as “seriously struggling”.

Effect of collapse
“Any collapse would open the floodgates to illegal loggers who will plunder forest resources and massively degrade our lands,” he warned.

Part of the reasons for the challenges in the sector, he said, was due to the increasing cost of doing business, especially electricity, which contributed between 15-20 per cent of production cost.

Electricity supply, he lamented was irregular, leading to loss of production time and equipment breakdown.

He said the situation was being compounded by the fact that salaries were still being paid when there was no production.

High cost of operations
Dr Adam said the industry was worried about fuel cost increases, which has increased field operations, and the added problem of high interest rates of between 27 and 30 per cent.

That, against a profit margin of between 5-15 per cent, he said depending on the kind of product sold, would take a miracle to keep head above board.

The indebtedness of a good number of timber firms to lending institutions, he pointed out, had led to the collapse of most timber firms in Takoradi, Kumasi, Akyem Oda, among other places.

The premises of these companies, he observed, had been taken over and being used as bus terminals, fuel filling stations, residential accommodation and hotels.

In Kumasi alone, he said about six companies have been sold this year; with about 5000 jobs lose within the period.

Only10, out of 50 timber firms in the area were operating presently, with over 40 sold out for residential, fuel stations or for hotel accommodation purposes.

Blame unsustainable agriculture practices
Contrary to public perception, Dr Asamoah Adam defended the sector, blaming poor and unsustainable agricultural practices for forest degradation.

“GTMO engages in selective logging and complies strictly with the laws governing the sector, we presently have a voluntary partnership agreement with the European Union and we can export only legally sourced lumber to that market,” he pointed.

Dr Asamoah said the industry favoured a regime where the fees collected for felling trees were commensurate with the market for wood and cost of processing, adding that any further increase in fees would lead to the downsizing of employment in the sector.

He suggested a favourable interest rate arrangement for the industry, as well as the introduction of modern technology, and an aggressive pursuit of an industrial timber plantation policy country wide save the industry from collapse.
 
 
 
Source: Daily Graphic
 
 

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