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24.01.2006 Business & Finance

PSI Takes Over Garment Factory At $1.5m

By Ghanaian Chronicle
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The Minister for Private Sector Development and President's Special Initiative (PSI), Hon. Kwamena Bartels, yesterday handed over a cheque of $ 1.5 million, estimated to be ยข13.8 billion, to purchase a dilapidated factory complex in Tema from the Ghana Textiles Manufacturing Company (GTMC).

The complex is to be refurbished, within six months, into a hi-tech factory space capable of producing quality international garments, and to be rented to ten new indigenous medium garments and textiles companies.

Each of these companies will employ between 300 to 500 skilled labour. The purchase is part of a series of initiatives under the PSI (garment and textiles sector) to accelerate garment exports by providing local businesses with the input they need to grow in getting access to credit and training.

Nana Tweneboah Boateng, the coordinator for garments and textiles under the PSI, explained the rational behind the purchase to the Business Chronicle.

"GTMC has a property, which is not being utilized at the moment and it is that property we are buying to refurbish," he stated.

According to him, what PSI is doing is to convert the complex into manufacturing factories and rent them out to ingenious garment manufacturing companies.

GTMC will produce textiles for both the local industry and for exports to America under AGOA.

Since its inception in August 2001, the PSI has identified and assisted small and medium sized factories with technical and managerial skills, as well as help them access finance needed to expand their business.

Ghana is one of the 37 countries eligible since October 2000 under the Africa Growth and Opportunity Act to export textiles into the lucrative USA market.

But many indigenous textile businesses complain that only $4million of manufacturing goods have so far been exported from Ghana.

Nana Boateng said Ghanaian firms needed to build up their capacity to be in partnership with textile companies in the USA and EU, to take up the advantage of the various protocols.

The PSI was established to expand and add volume to non-traditional export to diversify the economy, create employment and improve local livelihood.

This is expected to tie in well with the goal of export lead growth, which looks to drive the GDP growth figure of the country to approximately 8% per annum over the next ten years.

Currently functional, the PSIs are those on garments and textiles, cassava starch, oil palm and salt.

The PSI on garment has created 3,000 jobs in four years, and 5,300 more is expected to be added by the end of last year.

Since its launch, the cassava starch initiative has produced 10,000 metric tons of starch in almost five years. Those are clear on how much the capital outlet of the project was and will amount to an estimated $26billion in revenue before tax, salaries, utilities, labour.

The oil palm initiative is yet to start producing oil but the plantations are still being developed under various nursery schemes.

The salt industry has also seen an industry review.

Technical assistance, training and export contracts have been secured for industry leaders, which have purposely included PALMPROSE Limited. The existing annual output on salt is estimated at 150 000 tons of raw salt, that is approximately $11.25 million, contributing to the cancellation of the countries GDP.

However, these pre-PSI figures are yet to be collated for the added benefits of the presidential special initiative.

"So we are yet to see whether the PSI has actually diversified the economy, created employment and has improved local livelihood by significant contribution to the GDP."