Government has revealed plans to takeover the Ayensu Starch Factory from Tiberias, a subsidiary of Jospong Group following its failure to pay up fully the over $4million asking price for the company when it acquired it.
Speaking on the floor of Parliament Friday, Minister for Trades and Industry Alan Kojo Kyerematen disclosed Tiberias paid only $2,269,500 out of a total of $4,450,000, the outstanding balance it has refused to pay.
Mr. Kyerematen told the law making chamber that government is considering legal action to retake the factory as it has been left to rot with no compensation to workers.
He said: “Mr. Speaker, in the light of these and other developments, the Ministry through the Transaction Advisors informed the company of its decision to take over the Ayensu Starch Company in a letter dated 20th December, 2018.
“The company, however, in a letter dated 14th January 2019 indicated its refusal to hand over possession to the Ministry although the Company has abandoned the factory putting the plant and machinery at risk. Mr. Speaker, we are seeking legal advice on the next line of action to take to restore the Company to Government ownership.”
Mr. Kyerematen assured Parliament that his ministry in anticipation of government’s smooth takeover of the defunct starch manufacturing factory has commenced the negotiation of a financial package under the One-District One-Factory Programme to resuscitate the company to ensure that it achieves its intended purpose of job creation, reducing rural-urban migration and producing an important raw material for the food and beverage sectors and other related industries.
The Ayensu Starch Factory was inaugurated in 2004. It, however, collapsed in 2006, after only two years of operation, as a result of inadequate raw materials supply, frequent power outages, the lack of working capital, among other disturbing challenges.
In 2010, the Ministry of Trades and Industry initiated plans to revamp the factory and, truly, it began the production of starch in 2011. That attempt, however, also failed, as the company had lost most of its customers following its shutdown for years.
In 2016 another attempt was made at resuscitating the company and government through a Public-Private Partnership Tiberias Company Limited . Tiberias owns 70 percent of its shares. The partnership which was expected to ensure full production of the factory however did not materialise.