African Development Foundation

A United States Government Agency

The bosbel vegetable oils project

 

 

Project	Location	Funding Level	Funding Period
Bosbel Vegetable Oils Project	Tamale, Ghana	$245,000	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.

Located in the upland city of Tamale, Bosbel Vegetable Oils is helping the northern Ghana’s regional economy break out of its historical reliance on subsistence cultivation and labor migration by providing a ready buyer for the region’s soybean farmers. Ghana produces about 12,000 tons of soybean-based oilseed products every year, but total domestic demand for cooking oil, seasoning oils, and animal feed cakes is estimated at nearly 30,000 tons per year.

Bosbel is a Ghanaian-owned and operated enterprise that was launched in 1995 when its managing partners purchased a defunct state-owned oil mill under the terms of the Government of Ghana’s Divestiture Act. Bosbel – which currently produces 30 percent of Ghana’s domestically consumed soybean oil and soybean cake – is the only vegetable oil company in Ghana other than a production facility operated by the multi-national Unilever Corporation. The company’s growth in the past decade has provided small growers in Northern, Upper East, and Upper West Ghana with a steady buyer for their production of soybeans, peanuts and shea nuts.

With the support of a new trade and investment program funded by ADF and the Government of Ghana on a 50/50 basis, Bosbel will rapidly expand its capacity to deliver more product to market. The project will provide Bosbel with resources to renovate and expand its oil processing equipment, train participating farmers in improved agronomy, purchase and stockpile soybean reserves, and endow a revolving loan fund that local farmers will use to purchase seed and hire tractors. ADF will also support training for Bosbel staff in financial management, business administration, and marketing.

With these enhancements, Bosbel anticipates sustained growth over the next five years that will allow it to:

• Triple its oil production to nearly 10,000 metric tons,
  
  

• Multiply company profits ten-fold,
  
  

• Increase the number of organized outgrowers and smallholders receiving credit support from Bosbel from 250 to 450,
  
  

• Expand the number of Bosbel’s full-time employees from 50 to at least 70,
  
  

• Raise average employee salaries to a level five times greater than Ghana’s average GNI (US $2,150 vs. US $380),
  
  

• Create an annual bonus program for employees equivalent to 1.5 months of salary, and
  
  

• Develop a long-term savings fund for employees that will match employee salary contributions up to the level of 10 percent.

Bosbel’s growth will also provide an immediate benefit to 400 local soybean producers, most of whom are women, and provide sales opportunities to an additional 1,500 farmers who are working with local NGOs around Tamale to expand their cultivation of soybean and other oil-producing legumes.

In addition, Bosbel will create a vital community fund for soybean growers in local communities that will be financed with 10 percent of the company’s after-tax profits. The fund will provide small producers and outgrowers with resources to build storage warehouses in local villages, purchase essential agricultural inputs, and undertake agricultural training. Through this investment, Bosbel anticipates that local farmers will be able to expand their average production by nearly 40 percent.

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