A memo addressed to all staff in Accra and Kumasi said the company which was established on December 12, 1974, is no longer viable. The memo cited the lack of contracts and recurring monthly losses as reasons for the shutdown.
Neoplan Ghana Ltd to close down on January 31
One of Ghana’s coach manufacturing businesses, Neoplan Ghana Limited has announced that it will shut down on Friday, January 31, 2020.
Neoplan Ghana Limited
According to the company, the last time it was given a government contract was in 2002, which ended in 2010. The contract allowed Neoplan to produce about 450 DAF/VDL buses for the Metro Mass Transit Ltd.
The memo which is dated January 15, 2020, and titled “Closure of Neoplan (Ghana) Limited” was signed by the Managing Director of the company, George Nassar.
It said “Management regretfully informs you that Neoplan (Ghana) Limited will be closing down its branches on 31st January 2020. This is due to the lack of contracts and recurring monthly losses incurred. As a result, all employment contracts with the company will be terminated as of the said date until further notice.”
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In an interview with Daily Graphic, Mr Nassar said they are shutting down because the minority shareholder, the Fadoul Group, cannot continue funding the company all by itself, while the government which was the majority shareholder contributed nothing to its running.
“In the past six, seven years, we have been running the company ourselves without any contribution from the government. In 2016, we asked the government to buy additional shares from them so that we can finance the company ourselves.”
“In 2016, we paid them for the shares. They didn’t give us the shares and they kept the money with them,” he added.
He indicated that the money paid for the shares was $173,000. He added that the minority shareholders had invested about GH¢10 million in the company since 2016, while about GH¢260,000 had been lost every month in revenue during the period.
However, the government which is the majority shareholder has not invested anything for the last five years.
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Mr Nassar stated that about 100 people will become jobless when the close down on Friday. He said these are the remaining staff after pruning over the years, would lose their jobs.
At the peak of production, the permanent workers of the company were about 800, Mr Nassar added.
He, however, said although the workers were owed a backlog of salaries, that situation would have to be handled by the government as the majority shareholder and also because they owed the company, and not the minority shareholder.
He, however, declined to mention how much salaries the workers were owed.
Neoplan has built over 4,000 buses for the Ghanaian government in almost 46 years of its existence. The government has a 55% majority stake.
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The company can employ over 1000 workers when it is operating fully and running the shift system of production.
In its heyday, the company employed hundreds of Ghanaians and also offered one of the best options for road transport passenger vehicles.
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