Business News of Monday, 18 November 2013


Bring Kumasi Jute Factory back to life

It appears the epitaph of the one-time vibrant Kumasi Jute Factory has been written. Three big production lines stand idle. Inside the buildings, rusty equipment and other rotten equipment cover the spaces. The once beautiful layout is in shambles, with bushes all over.

As a Ghanaian, I always bow my head in shame anytime I pass in front of the defunct Jute factory at Atonsu in Kumasi.

I may not have had any direct role to play in the demise of this industrial establishment but the fact that fellow Ghanaians are responsible for the tumbling of the industrial giant makes me feel ashamed.

Will the Kumasi Jute factory come back to life?

With the defunct Kumasi Shoe Factory now back to life, the question that arises is: “What about the Kumasi Jute factory?”

The two factories formed what was known as the gang of two in those days, I am told. They led the way in the industrial development of Kumasi; providing jobs to thousands of youth and significantly boosting the economy of the city.

Both went dead but the Ghana Armed Forces (GAF) has revived the shoe factory. This followed the takeover by the GAF that saw the injection of new equipment.

Jute, according to one definition, is a rain-fed crop, with little need for fertiliser or pesticides. It is a long, soft, shiny vegetable fibre that can be spun into coarse, strong threads.

The jute fibre comes from the stem and ribbon (outer skin) of the jute plant. Jute has many uses, among them packaging of bags, sacks, wrapping material like cotton packs and wool packs.

Production of the crop is concentrated in Bangladesh and India. When Ghana became a major producer of jute sacks via the Kumasi Jute Factory, the country was among other nations like Cote d’Ivoire, Germany and Brazil that imported raw jute from Bangladesh and India.

Failed promises to revive jute factory

Since 1991, when the jute factory then managed by the Ghana Industrial Holding Corporation (GIHOC), ceased operation, nothing positive has come out of the various promises made to revive it.

For now it needs a decisive action from the government to bring the collapsed factory back to life.

The jute factory, established in 1960, as part of the CPP government’s industrialisation drive for the young nation Ghana, was one of he biggest establishments that provided the biggest source of employment for the people of Kumasi.

My information is that at peak production, it gave direct employment to about 2,000 people at the time. Several others had their employments indirectly from the factory.

After independence, the first president thought of undertaking an industrial revolution of a sort in the country. Believing that without industries our country could not make progress, Dr Nkrumah set out plans to set up basic industries in strategic areas of Ghana.

Indeed, Nkrumah was determined to lead the nation’s transformation from an agricultural economy to an industrial economy.

Consequently, technological and economic progress gained momentum with the establishment of several industries across the country.

But military interventions in governance, coupled with mismanagement, corruption and misplaced priorities have combined to crumble this fine project.

Why the factory was established in Kumasi

It was not for nothing that the factory was set up in Kumasi. The Ashanti Region was one of the biggest cocoa producing areas and Nkrumah found it prudent to situate the factory in Kumasi.

In establishing the jute factory, Nkrumah had in mind the cocoa industry which was the backbone of the national economy.

Between 1911 and 1976, Ghana was the world's leading cocoa producer. Production amounted to between 30 and 40 per cent of the world's total output.

Jute sacks played a key part in the cocoa industry and before the first republic, Ghana was importing the sacks at huge cost.

With a major boost in cocoa production, the government of the first Republic moved to explore avenues for producing jute sacks locally. This led to the birth of the Kumasi Jute Factory.

Along the line, after the closure of the company, the cocoa industry was plunged into all manner of difficulties anytime the traditional suppliers of jute sacks delayed.

In 2005 for instance, the Ghana Cocoa Board (COCOBOD) had to fall on Cote d’Ivoire as a stopgap measure for jute sacks when there was a slump in supply from the traditional sources.

Transportation of cocoa beans from the buying centres to the ports for shipment suffered seriously as a result of the shortage of sacks, and Ghana had to go begging for 5,000 bales of jute sacks from Cote d'Ivoire which was a competitor in the industry.

Licensed buying companies complained bitterly about the development. Hit by the situation, COCOBOD at the time promised to revive the defunct Kumasi Jute Factory to bring to a permanent end the shortage of sack shortages.

However, this promise, like others made by politicians, has not seen the light of day.

I remember very well that during the 2000 electioneering campaign, the New Patriotic Party made a promise to revive the defunct factory when it wins the elections.

The party won the elections but the promise did not materialise. The best attempt the then government made was in 2006, when the Divestiture Implementation Committee (DIC) made a fruitless attempt to revive the company through a public-private initiative.

As well as producing for local consumers, the jute factory, when revived, could produce jute products for international consumers.

In addition, it would provide employment for some of the teeming youth who are crying for jobs, and on a wider scale boost not only the economy of Kumasi but the Ashanti Region and the nation at large.