- as it makes €668,750 dividend payment to gov’t
Management of the Ghana Rubber Estate Limited (GREL) have said the current market arrangement on rubber continues to impact investment in the local rubber industry, as continuous exportation of the raw material derails the chances of investors recovering their investments.
The diversion of unprocessed rubber by some farmers – selling to persons who export the commodity mostly to the Asian market – will affect local financial institutions that financed the plantations.
Meanwhile, the development also denies the state from deriving some tax revenue from the commodity – given that there is no value addition.
Managing Director of GREL, Lionel Barre, during the presentation of a cheque for €668,750 as dividend payment to the Ministry of Finance in Accra, observed that exportation of the raw material now compels GREL to import rubber for processing.
This is after the company, some two years ago, started the first phase of a €62million rubber processing factory.
“We could develop bigger and faster than we are today. It is a pity that after all these years we are still focusing on supply chains and not investing in value chains. This has encouraged more people to export raw material rather than adding value to the product,” he said.
It is against this background that he noted not ensuring some firm regulation of the rubber value chain could affect the future investment of GREL, as the situation is different in neighbouring countries.
“We have created a supply chain for rubber but not the value chain. We need to develop the value chain, thereby encouraging value-addition before exportation,” he stated.
GREL is a public-private initiative that is the leader in rubber production in Ghana, and employs over 4,000 people directly with a target to increase the number to 6,000 in the coming years.
The company exports nearly 100 percent of its processed rubber produce abroad, raking in millions of foreign exchange to the country.
Deputy Finance Minister, John Kumah who received the payment, acknowledged the company’s challenges.
He assured management of GREL that government will act on their concerns, while noting that policies are already being formulated toward building a strong value chain in the rubber industry.
“We have taken notice of your advice and observations in the sector. It is one thing that affects almost all our agricultural produce. We just have the supply chain, as has been noted, but we are not good with the value chains; that is making us not add value before exporting.
“This is affecting our forex, employment, as we are rather creating jobs by so doing in other countries. These are matters we take seriously and will make sure we improve on them,” he said.
He also commended GREL for the prompt and regular payments of its dividend.