Business

Wilmar Africa Ltd shuts down oil plant over harsh economic conditions, benchmark discounts

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The oil production division of Wilmar Africa Limited, a wholly-owned subsidiary of Wilmar International, is facing imminent closure over harsh economic situation it is facing.

The company made the announcement in a letter addressed to the Food and Allied Workers Association (FAWU).

Wilmar Africa in the statement, among other things, said, its woes started with the government’s introduction of duty discount on benchmark value policy in 2019, which has made it difficult for it to compete with cheaper products imported into the country.

“There has been a huge increase in cheap imported products into the country. This has made it difficult for us to sell in the local market because imported oils from Asia are selling far cheaper than our product,” it said in a statement.

Wilmar Africa, which produces Frytol and Fortune rice, also explained that since Ivory Coast decided to regulate the price of oil in their market, they have set the price far lower than the prevailing price of local producers in Ghana. This according to the company, is making it uncompetitive in the market, thus, sales have slumped significantly.

“To make matters worse, our export market, which has been complementing our local sales, has also been hit by non-availability of vessels to transport the product to our main export market – Senegal due to the Covid situation. These compounded problems resulted in our worse sales in December 2021 and the low sales continuing into January 2022,” the statement added.

In view of this, Wilmar Africa Limited states that with no space for storage due to low sales, they are compelled to take a temporary shutdown of their oil-producing plant and monitor the situation and are asking for the suspension of the collective bargaining agreement, CBA, negotiations, as they do not have the environment to negotiate in good faith.

Read the full statement below:

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