Workers of the Produce Buying Company (PBC) picketed at the company’s head office in Accra yesterday, to express their displeasure about alleged mismanagement of the company and lack of capital injection by government, the majority shareholder.
The workers – who are part of the Professional and Managerial Staff Union (PMSU) drawn from the company’s regional, district, and unit level – displayed various placards calling on government to step in and restructure the organisation while injecting much-needed capital to clean its books.
In a detailed statement it released, the PMSU – which is a member of the Industrial and Commercial Workers Union (ICU-Ghana), urged President Nana Addo Dankwa Akufo-Addo to quickly step in and resolve the challenges to save the over-25,000 jobs at stake.
For the past half-decade, the PBC – the largest Licenced Buying Company (LBC) in the country, has faced several challenges in trying to purchase cocoa, which is its main business. Due to the challenges, for the first time in years it will not be participating in the purchase of cocoa between late June and early September, known as the Light Crop season.
“PBC Limited currently owes almost every bank in Ghana, and several service providers and suppliers. Banks are not ready to transact any business with the company. The cocoa buying industry is now dominated by foreign business entities and the company is fast losing out,” the statement said.
Prince Saviour Gankui, the National Chairman of the PMSU, noted that the company’s current debt profile stands at about GH¢700million. He therefore requested a letter of comfort from government to enable the company access funds directly from COCOBOD, its former owner.
“This will take away the need for bank guarantees which come at high interest rates,” he noted.
He further called for an urgent bail-out from government to enable PBC service its debt and restructure its short-term maturing debts, and regain its place in the prestigious Ghana Club 100 league.
“This is achievable and we know my president, our president, your president is a listening president, and would not like to see a state investment such as PBC ruined so it goes down the drain,” Mr. Gankui said.
Due to PBC’s inability to raise funds for purchasing cocoa since April, 2019, cocoa procured by agents of the company, using its infrastructure, has been handed over to competitors because PBC cannot pay for the stocks. This, he said, is resulting in the poaching of PBC’s hardworking and most reliable field operatives including District Managers, Accountants and Commission Marketing Clerks) by its competitors.
Origins of PBC’s troubles
The company was incorporated in 1999 and listed on the Ghana Stock Exchange after it was weaned from Ghana Cocoa Board, as part of the cocoa sector’s liberalisation. The company’s shares since inception have been held by SSNIT, 38.10 percent; Ministry of Finance, 36.69 percent; and the remaining 25.21 percent by private individuals and institutions.
The government of the day has control of the company through the appointment of seven out of the 11 board members. These are the chairman of the board, representatives from the Ministry of Finance and executive management.
The company was established without a working capital. Its equity of GH¢15million was made up of properties including offices and cocoa sheds ceded to PBC by COCOBOD. As a result of the above, PBC has always been faced with a problem of inadequate funding for it operations.
The problem was temporarily addressed by President JA Kufuor’s administration, when the company was given a comfort letter by the Ministry of Finance to enable PBC access seed funds from COCOBOD. This single action boosted the company to buy volumes resulting in very enviable profit. PBC was top of the Ghana Club 100 for two consecutive years in 2010 and 2011.
Despite the fact that PBC was paying huge dividends and taxes to government, and was conforming with terms of the comfort letter, it was revoked in the year 2014 due to abuse by some other state institutions.
PBC then had to resort to the financial market to seek facilities for executing it business – at very high interest rates.
Despite having to rely on short-term facilities from banks to fund core operations, the board and executive management – largely appointed by the government – kept spending on huge short-term facilities to undertake major diversification projects, some of which were government induced; including the establishment of a shea nut processing factory and purchase of shea nuts even when the factory was not ready to process them.
Unfortunately, the diversification project – according to the demonstrating workers, has not turned out as expected due to poor project implementation and alleged fraud perpetrated by some management members.
The former executive management are also alleged to have placed seed funds meant for cocoa purchases into savings and loans institutions, contrary to the company’s policy; with over GH¢200million still not recovered.