GEPA steps forward to revive Bonsa Tyres under NEDS

  • Seeks to recoup US$1.4bn from natural rubber export

The once vibrant Bonsa Tyres Company Limited (BTCL) which has been non-functional for a number of decades is set to be revived under the National Export Development Strategy (NEDS) as part of a move to increase earnings from natural rubber to US$1.4 billion in ten years.

The factory, established in 1963 as part of the import substitution programme, was to produce vehicle tyres for the local automobile assembling industry. But ever since Firestone Tyres withdrew from the joint-venture agreement and sold its 60 percent shares back to government in 1980 due to operational difficulties, the plant has remained defunct.

However, GEPA – acting in capacity as the implementers of the new NEDS programme – plans to revive the Western Region-based factory which has a rated production capacity of 1,500 tyres per day or about 420,000 tyres per annum by seeking a strategic investor, as a previous attempt to do so with the African Development Bank in the early 90s collapsed at implementation stage due to several challenges.

Besides reviving Bonsa Tyres, the strategy document plans to take advantage of the strong global economic growth in recent years, especially in the rapidly developing economies of China and India, which has increased demand for rubber significantly.

The global demand for natural rubber has been consistently on the rise. Global consumption of natural and synthetic rubber, pegged at 12.3 and 16.8 million tons, respectively, in 2015 is projected to reach 15 and 19.4 million tonnes respectively by 2020. China, the United States, Japan, India and Germany are the main rubber consumers, accounting for 56.8 percent of global consumption.

Among the strategies to implement to take advantage of the growing global demand include supporting and assisting farmers to expand existing acreages and establish new rubber farms and plantations; expanding support for out-grower schemes for rubber cultivation; and promoting and seeking investment into the establishment of processing factories for tertiary processing of rubber.

Despite this bright prospect, two main issues remain a threat to the rubber industry: loss of potential revenue from unregulated export of unprocessed raw rubber cup-lumps purchased from farmers; and non-existence of a comprehensive regulatory policy document to provide guidelines to promote healthy competition within the crop’s supply value chain.

But the NEDS plans to expedite action on the preparation and implementation of a comprehensive policy on rubber which includes regulation of the trade and competition amongst players in the industry to address these challenges. 

Currently, the Ghana Rubber Estates Limited (GREL) is the largest company in Ghana’s rubber industry. The company exports 95 percent of the rubber produced. Production has increased from 18,000 tons in 2012 to over 40,000 tons in 2017.

Rubber Plantations Ghana Ltd (RPGL) is the second largest producer of natural rubber in Ghana, operating mainly in the in the Eastern Region of Ghana. RPGL operates its own rubber nursery with a capacity of 1,000,000 plants.

About the NEDS

The NEDS is developed around three main strategic pillars. The three strategic pillars seek to expand and diversify the supply base for value added industrial export products and services; improve the business, regulatory environment for export; and build and expand the required human capital for industrial export development and marketing.

The first strategy seeks to promote, at least, 10 FDIs annually into large-scale industrial exports sector; upgrade and directly support expansion of 20 majority Ghanaian owned industrial exporters to attain global status; upgrade and directly support expansion of 100 middle bracket exporters to attain top bracket NTE earning status; and upgrade and directly support expansion of 200 emerging district level export companies to attain middle bracket NTE earning status.

The second strategy will also review and streamline regulatory and documentary requirements for export, and institutionalize effective public–private sector engagement mechanisms for export development.

And the third strategy seeks to focus on upgrading the Ghana Export School to a tertiary institution status and decentralise faculty to regional level with district coverage. This will introduce industrial export modules and practical internship in secondary and tertiary institutions to achieve mindset transformation towards export.

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