29. September 2022

Local textile factories face collapse

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The influx of pirated fabrics on the local market, high cost of production and weak enforcement of anti-piracy measures are threatening the survival of the country’s remaining textile companies.

The Akosombo Textiles Limited (ATL), Text Styles Ghana Limited, formerly known as GTP, Volta Star Textile Limited and Printext, which are the main companies that survived the turbulence of a dwindling textile sub-sector, are suffocating as a result of these triple challenges.

Ghana once had a vibrant textile industry with 16 large companies that employed some 25,000 people and accounted for 27 per cent of total manufacturing employment as of 1977.

However, the industry deteriorated such that by 2005, many of the textile companies folded up with the four major existing ones – GTMC, ATL, GTP and Printext, engaging a mere 2,961 workers.

The Daily Graphic has gathered that while some of the companies are struggling to pay the salaries of their workers, others are bearing the brunt of high cost of production, forcing them to shut down temporarily. Some of the workers of the textile companies disclosed to the Daily Graphic that they had been sent home and were recalled as and when work was available.

Context

Since 2010, task forces have been set up to crack down on fake textiles.

That move was in compliance with the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement, which mandates governments not to allow infringed goods to enter the channel of commerce and also not to allow the re-exportation of such goods.

However, that intervention has not been successful as the operation has not been consistent or sustained, giving way for traders and importers to have a leeway.

The textiles imported into the country are relatively cheaper and given the economic situation, those who patronise them opt for the comparatively cheaper price.

The textile companies have been helpless in getting the needed legal support despite the persistent calls from workers in the industry.

Text Styles’ challenges

In the case of the Text Styles’, the company has sent all its 600 workers home for the first two weeks of September, and they are to return on September 12.

The company is going through biting financial challenges, making it difficult to pay workers’ salaries.

The local union secretary, Sylvester Donkor, told the Daily Graphic that the management of the company took the decision because of the dire financial challenges occasioned by the shortage of residual fuel oil (RFO) on the market and the difficulty in selling it products, which had led to large unsold volumes in its depots.

He said in the absence of RFO, the GTP had switched to the use of diesel as the alternative fuel to power the boilers.

“But this has increased the cost of production so much, at a time when sales have drastically reduced.

“The two-week break will end on September 12 and we are only hoping that the RFO situation would have improved by that date, so that they will recall workers,” he said.

Mr Donkor explained that the decline in sales was largely because of the influx of pirated fabrics onto the Ghanaian market.

“When the borders were closed in the era of the COVID-19 pandemic, we were making good sales to break even because there was no illegal importation of pirated fabrics through the unapproved borders. However, after the borders were opened, things became worse for us,” he said.

He called for the enforcement of the anti-textile piracy task force that was set up to flush out pirated fabrics from the market to pave the way for local companies to survive.

ATL’s blues

For the ATL, the company which employed over 3,000 workers about a decade ago, now has less than 500 workers.

“The workforce was 600 last year, but as of today, we are less than 500,” a highly placed source at the company who pleaded anonymity told the Daily Graphic.

He added that even with the reduced number of workers, the company was not in full operation.

The source said the workers were at home and only called to work when the company received institutional requests from churches, schools and other clients.

“Workers are at home without working, but they are paid their salaries every month. The only reason this is possible is that the government made ATL one of the beneficiaries of the one district, one factory (1D1F) initiative,” the source said.

GTMC folds up

The situation has worsened at the GTMC, forcing the company to fold up lately.

When the Daily Graphic visited the premises of the GTMC last Tuesday, there was no human activity there, except security officers who were manning the entrance. A notice had been posted on the wall at the entrance, indicating that the buildings were being used for other purposes.

GFL-TGLEU concerns

The Ghana Federation of Labour (GFL) and the Textile, Garment and Leather Workers Union (TGLEU) attributed the dwindling fortunes of the textile industry to the failure of the government to implement measures that would help clamp down on the influx of pirated fabrics onto the markets.

The General Secretary of the GFL, Abraham Koomson, called for the immediate implementation of the textile tax stamp policy that was initiated by the government to help identify pirated fabrics.

He also stressed the need for the operationalisation of the anti-textile piracy task force that was set up by the government four years ago to clamp down on criminal elements who had invaded the local textile industry with pirated designs, logos and other materials.

The task force, made up of personnel of the National Security, the Custom Division of the Ghana Revenue Authority (GRA), the Trade and Industry Ministry, GUTA and other stakeholders, was given the mandate to curb the menace of the illegal importation of pirated Ghanaian textiles prints.

“We want the task force to be enforced as soon as possible so that we can get rid of the pirated textile fabrics and give space for the local textile manufacturers. We cannot be promoting the one district, one factory initiative and sit down for local textile companies to die,” he stressed.

Mr Koomson also called on the government to extend the two-year VAT waiver for textile companies to 10 years to enable them to make the right investment decisions.

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Credit: graphic.com.gh