Sale of state-owned enterprises begins

overnment has begun the process of privatizing some state-owned loss-making enterprises, with the aim of injecting millions of cedis to improve their performances.

The companies, namely GIHOC Footwear, Bonsa Tyre factory, Subri Industrial Plantation and GIHOC Glass Company, are currently inactive, rendering a huge number of Ghanaians unemployed.

The erstwhile New Patriotic Party Government put in place a plan to divest a host of state-owned companies, preferring to invite prospective investors to take over and make them viable. The move by the new government is thought to be a continuation of the original plan.

Currently, the Ghana Government, through the Divestiture Implementation Committee (DIC), has opened a bidding process and very soon, the aforementioned companies would be transferred to private investors who would be selected on their bids and project proposals. The deadline for the bidding process is August 31, 2010.

“The divestiture programme is an ambitious attempt to unlock the economic potential of Ghana by permitting resources of people, money and technology to be put to their best use and by increasing efficiency to achieve better living standards for all,” DIC has stated on its website.

GIHOC Footwear Company Limited was set up as one of the projects under the import substitution programme. It is located at Ahodwo, along the Lake Road in the Chirapatre layout of the Kumasi Metropolis in the Ashanti Region of Ghana.

Its premises consists of two sites, comprising the factory and a residential area, both covering a total area of 35.75 acres.

The factory’s plant, machinery and equipment were procured from the then Czech Republic and commissioned for commercial production in the mid 1960s.

In 1999, new machines were added from the same source. Its initial installed capacity was 601,000 pairs of assorted footwear per annum. Initial operations were successful, but production experienced a down-turn due to major economic constraints. Its present assets include a factory site, plant and machinery, residential area and among others. The factory is currently in a serious state of disrepair, with the administration block of the factory turned into a residential block.

The Bonsa Tyre Company Limited, on the other hand, was established to produce vehicle tyres and is the only tyre manufacturing company in Ghana and one of the three in the West African Sub Region. Bonsa is located on a 448-acre site on the banks of the Bansa River in the Western Region of Ghana, (the Region of Ghana’s oil find) and is within easy reach of the port of Takoradi.

Its premises consist of the factory blocks, administrative and residential buildings, storage facilities, club house, a swimming pool and other facilities. The factory is adjacent to Ghana Rubber Estates Limited which produces natural rubber and has an installed capacity for producing 388,000 tyres per annum.

The Subri Industrial plantation Limited (SIPL) is located near a township called Daboase, about 40 kilometres from Secondi-Takoradi, the seaport capital of the Western Region.

SIPL was established to produce natural resources for producing pulp and paper in Ghana.

It is now seeking private capital to invest in its pulp and paper mill for the utilization of the plantations of SIPL and to produce pulp and paper for Ghana and the West African market. The company has existing plantation of over 5,000 hectares of industrial raw material resources, and a further under-developed 13,000 hectares of forest-land for further expansion of the plantations.

The GIHOC Glass Limited is the only glass manufacturing company in the ECOWAS sub-region besides Nigeria, and was established to produce both hollow and sheet glasses.

The factory complex is located at Aboso in the Western Region of Ghana. It is along the main Tarkwa to Aboso road and within close proximity off the Tarkwa/Huni Valley Railway Lines. The factory was last rehabilitated and further refurbished in the late 90s and its assets cover an area of approximately 15.21 acres. The assets include administration, clinic, canteen, laboratory and amenity blocks, factory buildings and ancillary structures, residential buildings and laboratory block, plant and machinery.

Over 300 state-owned enterprises (SOEs) were operating in all sectors of the economy. Whilst a large number of them were in manufacturing and agriculture (including cocoa and coffee plantations, poultry and fishing), others were in the mining, hotel and timber sectors.

The sad news however is that many of these SOEs have performed inadequately over the years due mainly to poor management and a laissez-faire attitude towards state business.

It is believed that the divestiture programme will reduce the financial and managerial burden on the state. Government is expected to use the proceeds from sale of SOEs to improve infrastructure, health service and education in the country.

Meanwhile, the former Chairman of the National Petroleum Authority, Prof. Addae Mensah, sometime ago urged the past government not to divest the Bonsa Tyre Factory. He was of the view that government should instead reactivate the operations of the factory by injecting capital and overseeing its progress.