African Development Foundation

A United States Government Agency

Targeting ghana's educated consumers

 

 

Project	Location	Funding Level	Funding Period
Woodhouse School Furniture	Madina, Ghana	$250,000	FY 2004-2008

Ghana's economic growth over the past two decades has created tremendous opportunities for small entrepreneurs, but it has also generated intense competition in local manufacturing sectors that were once dominated by state-owned companies. One of those sectors is wood furniture manufacturing, an industry that has attracted dozens of small companies to produce well-crafted home and office furniture for a growing number of middle-class consumers and small businesses.

Woodhouse Company, Limited, of Madina, a suburb of Accra, has responded to this challenge by carving out a valuable market niche focused on the production of ready-to-assemble, functionally adaptive, modular furniture for schools and universities. In 2001, the Government of Ghana (GOG) dramatically expanded its commitment to universal access to primary education for children and improved access to secondary and tertiary education across the country by establishing the Ghana Education Trust Fund (GETFUND). This public/private social investment account is financed by value-added tax (VAT) revenues contributed by GOG and by donations from national and multi-national businesses, banking institutions and local communities.

Over the past three years, GETFUND's considerable resources have helped finance the construction of hundreds of new schools, and Woodhouse has been challenged to keep up with demand.

ADF's trade and investment (T&I) grant to Woodhouse will help the company meet this challenge by supporting investments in:

• new furniture production machinery,
   
• the implementation of computer-assisted furniture design and a computerized system for job costing and contract pricing,
   
• the hiring and training of additional management personnel,
   
• the training of management personnel in financial management and marketing techniques,
   
• the hiring and training of additional workers for a third work shift between midnight and 8:00 a.m.,
   
• the purchase of a minibus to transport night-shift workers to and from the Woodhouse plant, and
   
• the purchase of an on-site generator to ensure a 24-hour power supply.

With these investments, it is expected that Woodhouse will be able to more than double the number of furniture units it produces (from 88,000 to 227,000) per year and multiply its net profits by nearly six times over the five-year span of the grant.

This enhanced production and profitability will help Woodhouse:

• nearly double its total number of employees from 56 to 100,
   
• raise the average salaries of its workers by an additional 25 percent,
   
• introduce a provident fund for workers that will match employee salary contributions up to the level of four percent, and
   
• implement a health insurance plan for its workers that will be managed by a licensed firm within the scope of Ghana's National Health Insurance Scheme.
  

Woodhouse has further pledged to hire and train 30 women workers, a step that will help break down barriers to women's employment in a sector of the Ghanaian economy that remains dominated by male artisans.

Finally, Woodhouse has committed to giving back to the sector that has given it so much by financing a scholarship scheme for needy technical school students. The program will start with 15 annual scholarships of about US $3,400 that will cover school fees and living expenses for artisans and technicians in training, and each of the scholarship recipients will be offered an on-site training internship at Woodhouse.

The company expects that this social investment in education will yield long-term benefits for scholar and benefactor alike by helping Woodhouse identify promising students, cultivate their talents and hire them once they have completed their degrees. Woodhouse's investment reflects the growing competitiveness of Ghana's furniture industry and a growing national demand for skilled artisans and technicians. As such, the scholarship program may offer a model for other small- and medium-sized Ghanaian businesses as they explore the costs and benefits of different strategies for recruiting and retaining talented workers.

Beyond its immediate contributions to the Ghanaian economy, Woodhouse is helping set new standards for natural resource use in Ghana. The wood that the company uses is derived from non-export grade offcuts that it procures from state-licensed lumber mills. By using offcuts - lumber remnants that would normally be discarded or sold for firewood - Woodhouse is processing about one cubic kilometer of wood per year, and it is doing so without requiring the cutting of a single additional tree from national forest reserves.

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