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.
Source: graphic.com.gh