Avnash Industries Ghana Limited has announced that it has suspended the purchase of Paddy and minimize manufacturing operations at its edible oil refinery, Soap Factory and Rice Mill.
The company says it has decided to shift into trading, as present government 50% Benchmarking Policy has caused “Made in Ghana” products to be uncompetitive, as against incentivized cheap imports from Far East and ECOWAS countries.
“Management has strategically decided to minimize manufacturing foot print in Ghana and shift to Importation and trading of Rice, Oil & Soap to take advantage of Import incentive offered by Government through 50% Benchmarking Value,” a statement issued by the company said.
“We lost market for Vegetable Oil, Soap & Rice to the cheap imports into Ghana, as current Government policy hast incentivized Neighboring ECOWAS countries to dump product by offering 50 % Tax benefit as against 100% paid by us as local manufacturer,” it added.
According to Avnash, the Annual increase in Paddy price in Ghana and a relatively stable price of Rice in international market from last 5 years have made Rice production further un-competitive, fueled by the 50% Benchmarking.
“Avnash Management supported these loss-making operations, however now, we are carrying out our feasibility study to shift our Rice Production unit to Industry friendly ECOWAS country”.
It explained that the move has been occasioned by the communication received from the GRA of the indefinite suspension of repeal of 50% benchmark discount policy.
It pointed out that the decision is to cut the continuous losses being made since last 2 years on account of sustaining the workforce throughout Covid pandemic period in expectation of repeal.
“We have also instructed our paddy procurement officers at our rice mill in Nyankpala to halt paddy rice purchases with immediate effect because our warehouses are full. This decision on rice is occasioned by the huge numbers of cheap imported rice products on the local market making our own home-grown Ghana rice difficult to sell.
We Thank all farmers who have supported us since 2016, With our 24/7 Paddy Purchase policy we expected to bring about major improvement in Paddy cultivation, however the availability of cheap Rice due to 50% Benchmarking. policy has forced us to suspend further Paddy Purchase”.