GHANA– Neoplan Ghana Limited, a former manufacturing giant known for its signature buses, has announced that it will shut down all its facilities as from end of January because it was no longer viable.
A memo to all staff of the company in Accra and Kumasi announcing the closure of the company, which was established on December 12, 1974, cited the lack of contracts and recurring monthly losses as reasons for the closure.
The company began the journey to its current state nine years ago when it stopped active production and started depending on minor repairs and maintenance of accident buses which according to Neoplan were woefully inadequate to meet its operational cost, hence the dire straits it had found itself in.
Neoplan company also said that it had over the years faced stiff competition from foreiggn companies like KIA, Hyundai, Yutong, Scania, Tata, Ashok-Leyland, Mercedes Benz and Volvo whose arrival in the Ghanaian market gradually pushed them out of business.
The company said the last time it was given a government contract was in 2002.
Managing Director of Neoplan Ghana, Mr Georges Nassar explained that the decision had been informed by the inability of the minority shareholder, the Fadoul Group, to continue funding the company all by itself, while the government which was the majority shareholder contributed nothing to its running.
Nassar revealed that since 2016 the minority shareholders had invested about GH¢10 million in the company, while about GH¢260,000 had been lost every month in revenue during the period.
Mr Nassar said the company had tried everything, including asking the government to stop importing coaches and allow them to produce robust and quality buses locally, since it had the capacity, as well as reduce import duties on parts they needed but all had been to no avail.
Among the losers of the closure are the company’s employees.
Neoplan’s MD revealed that the company currently employed 100 full term workers all of whom will lose their jobs as a result of the closure.
Despite its present predicament, Neoplan’s management is nursing a faint hope that a request made in December last year for a credit facility from the One District, One Factory (1D1F) Secretariat, would eventually yield results and prevent the company from becoming defunct.
In the memo to workers, the company expressed this hope by saying, “Please, rest assured that you will be called back as soon as the government of Ghana (Majority Shareholder) supports the company financially or gives us a contract.”