Imports threaten viability of Ghana tomato factory

Ghana's Northern Star Tomato Factory, formerly the Pwalugu Tomato Factory, faces closure if the importation of under-invoiced tomato paste into the country is not checked.

Trusty Foods Limited, an Italian investment and the only local tomato processing company in the country, buys its raw material from Northern Star. Trusty has warned that "unfair competition" from under-invoiced tomato paste imported into the country may force it to reduce the raw material it purchases.

Should the threat be carried out, the many farmers in the northern part of the country who depend on the factory as their largest market would lose out, while the huge investments from the government to revive the factory will also go to waste.

The Managing Director of Trusty Foods Limited, Domenico Falcone, said "we do not fear competition in the market but the playing field must be level to ensure fairness." He said there were about 30 brands of tomato paste on the market "but it is only La Bianca, our brand that is locally manufactured and well pack¬aged to compete with the foreign brands."

Trusty Foods, owned by the Russo family in Italy, is the largest tomato producer in that country and exports million of dollars of tomato paste to the ECOWAS market and the European Union. The company has the exclusive right to purchase its raw material from Northern Star and therefore a reduction in its demand would adversely affect the country's huge investment, as well as create problems for northern region farmers.

Falcone said Trusty Foods had the capacity to produce 300 twenty-foot containers of tomato paste should it produce at full capacity and demand more from Northern Star, which is also producing below capacity. However, he said, the competition from the under-invoiced imports of tomato paste was denying the two companies the expected revenue.

The concern of the company comes barely a month after the discovery of documents showing the importation of massive amounts of under-invoiced palm oil products into the country. Investigations revealed that unscrupulous importers deliberately quoted low figures to enable them to pay low taxes and also price their products below that of local companies.

"It saddens my heart when I have to layoff some workers when we are forced to reduce our production," Falcone said, adding "we presently employ up to 400 people and indirectly provide a ready market for thousands of peasant farmers in the north."

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