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18.05.2005 General News

Govt is not leaving JTL Workers to their fate

By GNA

Accra, May 18, GNA- Trade and Industry Minister Alan Kyerematen on Wednesday said Government was committed in charting a new path for the workers of Juapong Textiles Limited (JTL).

Consequently, it has been agreed that a joint task force comprising representatives of the Juapong community, the workers of the JTL and the Ministry of Trades and Industry, was formed to explore all opportunities of sustaining the JTL workforce in gainful employment even if outside the textiles sector.

Mr. Kyerematen, who was speaking at a press conference in Accra, on the operations of the textile company said at current production cost levels, JTL was highly uncompetitive compared to international benchmark standards

"The cost of producing one yard of grey baft at JTL is 90-95 cents compared to 40-45 cents per yard imported from China. "The cost of labour at JTL averages between 8-10 US dollars a day as compared to a maximum of three US dollars and 50 cents a day in China," Mr Kyerematen said.

He added: "even with the prospect of eliminating the import duty of five per cent on lint cotton and other chemicals to support JTL operations, it is unlikely that the un-competitiveness of JTL would be significantly improved if it remains in the existing line of business." Mr Kyerematen had earlier given the state of affairs of the operations of the JTL, highlighting its joint shareholding with Vlisco, which consequently injected funds to the Company.

However, by the 2004, the situation in both JTL and Tex Tiles Ghana Limited, a subsidiary of Vlisco, which supplied cotton JTL deteriorated with crash in volumes from 16.2 million to 10.4 in 2004.

This was mainly due to imports from South-East Asia, increase in production cost, increase production cost in both TSG and JT, higher utility cost, the persistent downturn of lack of continuous supply and the appreciation of the Euro against the Dollar.

These, Mr Kyerematen said had made both JTL and TSG highly uncompetitive and the process, the JTL was worse hit, and consequently found it difficult to survive.

Vlisco is also now no longer in a position to sustain the losses and had considered it necessary to exit the company.

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