About 60 timber companies have collapsed, resulting in 70,000 job losses in the past few years due to the dwindling fortunes of the industry, says the Ghana Timber Millers Organisation (GTMO).
Attributing the decline of the industry to the high cost of operation emanating from the high cost of electricity, fuel and high interest rate on bank loans the organisation warned of its total collapse if urgent measures were not instituted to save it.
Chief Executive Officer of the GTMO,Dr. Kwame Asamoah Adam who made this known during an interaction with journalists in Accra at the weekend said “the future of the industry is very gloomy”.
Among other effects, he said, was the stump of revenue from the timber industry, which remained one of the main export revenue earners for the country from 200million euros to 120 million euros.
He said the remaining 45 companies, with a total employee population of about 30,000, were also struggling to survive, and could collapse if the challenges facing the industry were not addressed.
Dr. Adam identified the main factor contributing to the decline of the industry as the increasing cost of operations as a result of increases in electricity tariff which constituted between 15 and 20 per cent of production cost, adding that the high cost of fuel was militating against production.
“Any collapse would open the floodgates to illegal loggers, who will plunder the forest resources and massively degrade our lands,” he warned.
He lamented that despite the high electricity tariff, power supply remained irregular, leading to loss of production time and equipment breakdown, “although salaries are paid when there is no production”.
The industry, he said, was worried about fuel cost increases, which in turn increased field operations, compounded by the high interest rates of between 27 and 30 per cent, against a profit margin of between five and 15 per cent, adding that under these conditions, it takes a miracle to keep head above board.”
To address the situation. Dr. Adam called for a favourable interest rate arrangement for the industry, introduction of modem technology, and an aggressive pursuit of a national industrial timber plantation policy.
In addition to the problem, he said some financial institutions had been confiscating properties of timber firms because of their inability to repay loans contracted.
That, he said, had led to the collapse of most timber firms in Takoradi, Kumasi, and Akyem Oda, among other places, and the selling out by the banks for use as bus terminals, fuel filling stations, residential accommodation and hotels.
“Within the Kumasi environs in the Ashanti Region alone, about six companies have been sold this year resulting in the loss of about 5,000 jobs,” he disclosed.
He expressed fear that the collapse of the industry would pave way for more illegal logging which would result in the destruction of the country’s forests, stressing that members of the organisation operated in a way to protect the nation’s forest cover.
Dr. Adam also attributed forest deg-‘ radation to poor and unsustainable agricultural practices in farming areas and feared that the situation could worsen with the collapse of accredited timber operators.
“GTMO engages in selective logging and complies strictly with the laws governing the voluntary partnership agreement with the European Union and we can export only legally sourced lumber to that market,” he said.
Touching on stumpage (money collected for felling trees), Dr. Adam said sector. We presently have a the industry favoured a regime of fees commensurating with the market of wood and cost of processing and cautioned that any further increases in stumpage fee would lead to downsizing.
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