The Export Development and Investment Fund (EDIF) has given a lifeline to the Volta Star Textiles Limited (VSTL) by injecting three million Ghana cedis to enable the company kick-start operations for the next three months.
The money will be used to procure raw materials for the production of greybaft, pay salaries owed workers and get new machine parts.
The company has been operating just 20 per cent of installed capacity due to lack of working capital since trial test have been completed in April.
Mr Edward Collins Boateng, Executive Secretary of the Ghana Export Promotion Council and a member of the EDIF Board, said the decision to help was taken, based on pure business consideration and on the Rescue Plan put before EDIF by the management of the company.
Mr Boateng said EDIF came to the rescue because it believed the production of greybaft was a viable business and the goods could be exported to earn the country foreign exchange.
"We hope we will not come back to this situation again but rather think of expanding the operations of the company," Mr Boateng told workers and management when he presented the cheque to management on Tuesday.
Since its establishment in 1968, the company formerly known as Juapong Textiles Limited, has had a history of frequent changes in management and in the process hampering its growth.
The company folded up in 2005 following the filing for liquidation by the Dutch giant Briscoe, which was then operating it.
However, Government in May 2007 reactivated the company in line with the vision to resuscitate the country's distressed but viable industries to create jobs.
The aim was that the factory under the Government's District Industrialisation Programme could accelerate the economic development of the district and the adjoining ones and help to resuscitate the nation's textile industry.
Currently, the company employs about 280 casual workers.
Mr Boateng said the ability of the factory to produce on sustainable basis was important for the economic and social development of the people.
He said firm commitments have been received from Printex, GTP and Akosombo Textiles to buy the greybaft from VSTL, saying that, once marketing of the product was guaranteed the workers should be more committed to ensure progress and growth of the company.
The North Tongu District Chief Executive, Mr Moses Asem, appealed to the workers not to politicize the operations of the factory, saying it was a national asset and its survival would be for the good of all Ghanaians.
He assured the workers that once the company begins full-scale operations, they would be given permanent appointment letters.
Mr Evans Adzagbo, Works Manager of VSTL, said with the working capital, production would be stepped up.