Business News of 2014-05-26

Oda Timber firms reeling from high production cost

More than 10 wood processing companies at Akyem Oda and its environs in the Birim Central Municipality are on the verge of collapse due to the high cost of production. The wood processing companies make Akyem Oda the most industrialised in the Eastern Region.

Birim Wood Complex, the biggest of the companies and the largest employer in the municipality, has retrenched more than half of its work force of over 1,000 while other companies such as East Forest Products Limited (EPL) and K.G Wood Company Limited have partially folded up and laid off hundreds of employees.

Confirming the serious situation to newsmen at Oda recently, Mr Paul Ninson, the Eastern Regional Industrial Relations Officer (IRO) of the Timber and Wood Workers Union (TWU) of the Trades Union Congress (TUC), said Birim Wood Complex had shut down a section of its factory, while A.K Wood had also closed down its sawmill, leaving only the plywood section to operate.

He said other timber firms, including Benod Wood and Emmanuel Wood, were also operating at half strength after laying off most of their workers.

According to Mr Ninson, it was on the same grounds of high cost of production that Oda Sawmills Limited, which was one of the biggest timber firms in the Eastern Region, was compelled to shut down in 2011 laying off its staff of more than 1,000.

Narrating the events, he said Coppon Sawmills Limited, also at Oda, scaled down its operation between December 2013 and February, 2014 and was operating with only a handful of workers.

Cause of high cost

Mr Ninson attributed the closure of the wood processing companies to the huge amounts paid as electricity tariffs, the over 400 per cent increase in stamp fees charged this year by the Forestry Commission, high fuel prices coupled with high cost of tyres and vehicle spare parts, and high taxes in general.

He said, for instance, that Birim Wood Complex alone spent as much as GH¢200,000 on electricity tariffs each month.

Mr Ninson appealed passionately to the government to come to the aid of timber companies by reducing the high electricity tariffs and stamp fees to enable the companies to maximise their output and in turn help raise the nation’s foreign exchange earnings as well as engage more Ghanaian youth to supplement the government’s efforts at solving the unemployment problems facing the country.

He further urged the government to find a lasting solution to the rampant power outages which affected the operations of the timber firms.

Mr Ninson, in addition, expressed concern over the activities of illegal chainsaw operators who worked at night with impunity without paying any taxes to the government and urged the government to crack down on their activities.

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