Wa Fruit Juice Factory cries for Public-Private Partnership intervention

A GNA Feature by Bajin D. Pobia,
Wa, February 25, GNA - The defunct Wa Fruit Juice Factory Limited, in the Upper West Region, has been crying for a Public-Private Partnership intervention to bring it back to life.

The factory in its initial stages, was a business investment established by the Wa Municipal Assembly, with support from the City Council of Leper, Belgium, through inter-city friendship.

Documents made available to this writer showed that the factory started the production of juice in September, 2009, with the first production cycle ending in November of that same year.

The factory has been registered under the Ghana Companies Code 1963, (Act 179) as a company limited by shares.

The Company used to process fruits into juice initially, for the local market. The sales were promising and the demand for the product was also good.

However, its intention to expand the market in the future has not been realized because of its collapse.

In the first operational month ending March 31, 2010, the factory made a loss before provision for bad debts and depreciation of 2,896 Ghana Cedis.   Depreciation and bad debts stood at 5,575 and 129, 000 Ghana Cedis respectively.

During the period between April and June 2010, the factory made a profit before depreciation of 1,394.50 Ghana Cedis.

The factory, however, faced operational challenges, all of which could have been solved by its stakeholders, namely, the Wa Municipal Assembly, and the Leper City of Belgium.

These included insufficient working capital, weak facility base, lack of sound labour policy and lack of administrative autonomy.

The project was viable, but was challenged with unreliable water supply, standby power generator, staff grievances over remuneration, unfinished work on the factory premises and insufficient working capital base.

The cumulative effect of all these challenges was that the factory was still operating at 15 percent of its planned sales revenue, which was less than its break even operating level.   The factory was therefore only accumulating losses until such a time that it could operate at least at the breakeven level.

The factory was able to produce a total of 36,000 fruit juice per month.

It entered the fruit juice market by supplying juice to the local market.

The consumption patterns in Wa and its surrounding communities favoured the marketing of pure fruit juice. At the introduction stage, demand was high and in favour of products from the factory.

People were eager to taste the Wa Juice made in Wa.   A lot of them became repeated buyers.   The reason was that the product was unique, in that it was made locally, with no added sugar or chemicals.

The products offered for sale were mango-orange mix, mango-pineapple mix, mango cashew mix, pineapple orange mix, and pure mango as well as Watermelon-pineapple and pure watermelon juice. The products were bottled in 300 ml bottles, and carried in wooden crates.

The unit price per bottle was 80 pesewas, in order to make the product affordable in the target market, so that more people could taste it, and also motivate retailers to sell the product.

A crate of 24 bottles was sold at 16 Ghana Cedis to retailers and consumers. Wholesale price was 14 Ghana Cedis per crate, with Two Ghana Cedis discount allowed, and that strategy helped the factory to sell all its stock. The products were delivery at the doorsteps of retailers, using the company truck. Distributors were also engaged to sell at a commission of Two Ghana Cedis per crate.

During the six-month period, the factory recorded gross sales revenue of 9,522 Ghana Cedis. This figure was far lower than the planned 64,800 Ghana Cedis for the same period. This represented 15 percent of the planned operation level of 129,600.00 Ghana cedi for the first year. Products of the factory expired within six months.

Equipment
The main equipment in the factory were: one manual cutter, two water presses, one pasteurizer, two manual corking machines, one bottle washer and three orange juice extractors, mango crusher, a standby power generator.

The fruit juice was something out there to change the nutrition supplement landscape. The product of Wa Fruit Juice drink flavour knocked many visitors off their feet, and was just about to capture the entire local market,   because of its unique and revered taste, but its   collapse has not allowed that to happen.

The fruit juice was a dual powered wonder, a fusion of fantastic flavour and healthy promoting benefits. Many visitors to the region immediately recognized the potential of the fruit drink. Indeed products from the factory became a stirring symbol for health, a balanced diet, and all things that are good for the body. The products also became a household word among visitors

However, this laudable and promising factory which had the intention of researching into the use of some wild fruits abundant in the region as part of its production raw material has now become defunct due to mismanagement and corrupt practices.

The efforts at revamping the factory are crawling, and many mango farmers are being discouraged to expand their plantations, and engage more helping hands to produce to feed the factory.

The functioning of the factory to many people in the region was not only promoting good health among consumers, but also a concrete measure of protecting wild fruit trees from the perennial bush fires, thereby allowing them to replenish their stock, to produce more fruits to feed the factory.

As part of efforts to revamp the factory, a new board of directors has been re-constituted, with Mr. Gaeten Kala, a Wa-based businessman as its chairperson, to work hard and revive this promising factory to help create employment opportunities for the youth.

Speaking to this writer, Mr. Kala said the board has since met with its partners, Leper in Belgium,   and are working hard to bring the factory back to life,   and due consideration has been given to Public-Private Partnership participation in that regard.

'We are encouraging public, private partnership participation to bring expertise and capital to inject into the operations of the factory', the board chairman said, adding: 'an advertisement has since been caused in the dailies to encourage entrepreneurs to apply for consideration to help manage the factory to benefit both the Wa Municipal Assembly and the entrepreneurs'.

He said the factory's main objective is to boost local economy through the production and consumer chain. It has also been envisaged that products of the factory be supplied to major health facilities in the region for the consumption of patients, to stay away from soft drinks with high sugar substance that sometimes affect their health.

The board chairperson said, when in full operation, the factory will bring in raw materials, such as mango, pineapples, oranges and cashew among others from southern Ghana and neighbouring Burkina Faso to supplement local raw materials.

Managerial Challenge
Mr. Kale explained that the mentality and attitude of the then managers of the factory that the factory belonged to the Wa Municipal Assembly and therefore did not see it as their own resulted in mediocrity and corrupt practices that caused its collapse.

He was, however, of the opinion that with Public-Private Partnership intervention, discipline would be restored and create opportunities for production to scale up.

Mr. Issahaku Nuhu-Putiaha, Chief Executive of the Wa Municipal Assembly said, the factory is viable and has a lot of potentials of taking up the entire market in the north and neighbouring Burkina Faso, if experts from the Public-Private Partnership bring their expertise to bear on the operations of the factory.

He said consumers of the fruit juice drink have been yawning for it but resources are not available to the Assembly to run it, hence the need for Public-Private Partnership participation to revitalize the factory to create job opportunities for the youth.

According to him, many youth would be encouraged to undertake large-scale mango plantation and the cultivation of other fruit trees in the communities to feed the factor and improve on their livelihoods.

'As I speak to you now, there is   large watermelon cultivation going on in the Wa East District and more youth are interest in that venture, but are constrained of financial support and equipment, such water pumping machines and insecticides to go into that venture', Mr. Nuhu-Putiaha said.

In the local parlance, it is said: 'poverty makes the poor man to drop his girlfriend,' and that is exactly the challenge the Wa Municipal Assembly is faced with. The Wa Fruits Juice Factory has become defunct due to the lack of resources and managerial skills to break even the operations of the factory.

It is expected that due diligence would be done, regarding shortlisting of qualified entities with good track records in the

Public-Private Partnership, to participate in the operations of the factory for sustainable development.

The Assembly should avoid political influence, ethnic considerations and cronyism in the selection of entities to partner it because such considerations have brought about the collapse of laudable projects, and that should serve as a guide for all.

The Wa Fruits Juice Factory is so dear to the people, and all efforts must be made to bring it back to life, to help develop the region.

GNA