Public Affairs manager at COCOBOD, Fiifi Boafo, has disclosed that his outfit is committed to supporting the Produce Buying Company Limited (PBC), especially considering its current financial predicament.
According to him, the possible collapse of the Produce Buying Company Limited (PBC) following steep decline in its market shares is a situation the company has had challenges in dealing with over the years. He revealed that due to this, COCOBOD has had to intervene.
Mr Boafo stated that the major problem PBC has been facing has to do with raising finance for its activities. He explained that since PBC has been struggling to do so, COCOBOD, together with the ministry of finance and SIGA came up with an arrangement to ensure that it is able to raise capital for PBC’s business.
“Also, another part of that arrangement was that instead of going to a bank to raise a guarantee before COCOBOD gets the money to do business, we had a special arrangement that did not require that they go to the bank to raise a guarantee because doing so comes at a cost to PBC.
“So, we are able to take up that cost and allow them to operate at not such a high cost as they would have, if they were to go to the bank to raise a guarantee. Of course, going to the bank has also been a challenge for them because of their situation. Yes, PBC has had its own challenge but there’s the need for us to help them get out of the situation and that’s exactly what we are working on.”
Fiifi Boafo
PBC risks collapse over financial challenges
Commenting on whether PBC’s problems would have worsened without the intervention from COCOBOD, Mr Boafo stated that just like any business, PBC is going through a rough patch and the impact has been huge. He however admitted that but for the intervention by COCOBOD, the situation of PBC would have been worse.
“However, we are at the stage where there is the need for us to intervene because we believe that, even though we have sixty-five license-buying companies, PBC is one of the key license-buying companies we do business with. So, if there is any need for us to intervene and ensure that PBC is able to stay and work, then COCOBOD will be prepared to do so and that is precisely what we are working on.”
Fiifi Boafo
On her part, Deputy CEO at Produce Buying Company Limited (PBC), Vivian Boadi, revealed that PBC’s fortunes started dwindling way before 2016. She explained that the company has been without working capital from its inception and relied on COCOBOD, seed fund and loan overdrafts from the financial sector to be able to augment its operations.
“The shares of PBC was posted in 2000 – that was when PBC became a limited liability company and was also put on the Ghana Stock Exchange. From that time onward and even before then, we’ve depended on COCOBOD because we were part of COCOBOD. After that, when we were weaned off, we then depended on COCOBOD and loan overdrafts from the financial sector to be able to operate effectively.
“As time went by, the financial cost from these operations were becoming higher. One thing we have to understand is that PBC depends on the margins we receive from selling and purchasing of cocoa and these margins we get from COCOBOD. So, if the operation cost is not up to the margins, definitely, there will be issues.”
Vivian Boadi
From 2017, Vivian Boadi stated that PBC has had losses as high as GHC172 million. The loss, she indicated, started in 2013 with about GHC8 million, which has over the period, gone high.
“In 2019, that was when COCOBOD intervened and we solely relied COCOBOD seed fund for our operation because cost of finance was quite high and we couldn’t also go to the banks to borrow because previous borrowings had not been paid. As at September 2019, we owed GHC715 milion to banks, COCOBOD, staff, statutory bodies in Ghana and these are not records that has been hidden. All our correspondence to all our stakeholders have this data and fact.”
Vivian Boadi
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