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City Facilities Management Limited

Business News of Tuesday, 26 February 2013

Source: B&FT

Erratic power supply collapsing cold-store businesses

The present regime of power supply in the country is badly affecting many businesses in Kumasi, worst of which is the cold-store business.

The cold-store operations are heavily dependent on electricity to preserve stocks of fish and meat products.

However, the frequent power outages nationwide which have come to be known as “dom so, dom so’’ have now forced operators to resort to the use of generators which are powered by fuel to keep refrigerators running.

The situation unfortunately keeps worsening with each passing day, as operators are now compelled to buy unspecified quantities of fuel as a backup plan for power-generators due to the erratic power supply being experienced in the country.

The Manager of one of the leading cold-stores in Kumasi, who spoke to B&FT on condition of anonymity, disclosed they now have to buy about two barrels of diesel a day to fuel their generators at a cost of GHC930.

A barrel of diesel sold for GH?390 some few days ago, but now sells at GHC465 as a result of the recent fuel-price hikes.

According to the Manager, the Company spends about GHC3,000 every month on prepaid credit to run operations when there is regular power.

Unfortunately, the present circumstances now force them to spend within weeks almost five times the amount of money usually spent on prepaid credit for fuel. He cited, for instance, that if power supply continues to remain unstable for half a month, about GHC13,950 will have to be spent on fuel to power their generators.

Despite the cost involved so far to run the cold-store business, the power fluctuations have also caused serious damage to equipment used to the run operations. This situation is observed to be drastically affecting every inch of the cold-store business, and is forcing a lot of people out of work.

“A lot of the cold store operators can hardly make any meaningful sales. Huge sums of money are already spent on power to preserve fish and meat stock. We used to sell about GH?40,000 worth of fish and other products within a day; but as we speak, we can barely sell GH?5, 000” he lamented.

The irony of the situation is that the stock of fish and meat products sold in most cold-stores in the country are imported, and attract a lot of import duties and other cost to transport it to the hinterlands. It therefore makes the situation very difficult, particularly because any attempt to increase the price of fish and meat to be able to recover some of their losses would overburden customers.

Some cold-store operators who could not cope with the huge financial burden have threatened to strip incentives and other packages from their workers in order to mitigate the cost of operation.

Job-cuts may however be the next resort if things remain the same for a long while.

Workers employed in the cold-store business are regularly screened by authorities as a measure to prevent any contamination. In addition to this, some are placed on the health insurance scheme as part of measures to enable any worker seek immediate medical care in case of any eventuality.

These and many other remunerative packages at the moment make it extremely expensive to run the cold-store business, and if no immediate steps are taken by authorities to address the sector’s challenges, most of the cold-store businesses will completely fold-up.

Already, other operators of businesses which depend entirely on electricity for their operation in the region are threatening to down-size their staff strength to be able to sustain their business.

As power suppliers remain in a deadlock on when this developing power crisis will be resolved, the critical question on many minds is: what short-term measures the suppliers can put in place to lessen the plight of Ghanaians?

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