November 01, 2017 / comments : 0
Faded textile giant company, David Whitehead Ltd is set to resume operations in the next two weeks after securing a $2 million loan facility from the Reserve Bank of Zimbabwe. DWTL, which is currently under judicial management, stopped operations over a year ago due to working capital constraints.
"I can confirm that we have received a $2 million loan facility from the central bank and we are now doing everything possible to resume operations by mid-November," judicial manager Knowledge Hofisi told the media this week.
He added the company was expected to start draw-downs by end of this week. The company will begin with a shorter working capital turnaround route of converting yarn into fabrics, then dyeing, printing and finishing of the fabrics, said Hofisi.
Formerly listed on the Zimbabwe Stock Exchange, DWTL was placed under provisional judicial management in December 2010 before confirmation of the final order in March 2015. The delisting took place in 2009 after the acquisition of a controlling stake by Elgate Holdings, which has since been rescinded. It used to produce about 20 million metres of fabric per year while directly employing 3 000 workers and thousands in down and upstream industries. The company has appointed an oversight committee to be chaired by Retired Justice Leslie George Smith to provide a strategic direction and enhance governance issues, said Hofisi.
"We would want to have electricity restored immediately and we have an arrangement with Zesa that upon payment of the agreed amount, we will be reconnected," he said. Zimbabwe's textile sector used to be one of the country's major employers, providing jobs to about 51 000 people at its peak. By 2005 employment levels had reduced to 28 822 with 22 178 job losses recorded. Considering the clothing sub-sector alone, employment numbers sharply reduced from 13 500 in 2009 to 12 506 in 2010, then to 8 627 in 2011 and to a mere 4 748 in 2012, a report by Zeparu said. Job losses in the clothing industry between 2009 and 2012 totalled 8 752, or 65 percent after dollarisation. The textile industry fared even worse than the clothing industry during the same period with such giants as David Whitehead, once the sector's largest firm, Cone Textiles or Modzone, Merlin and Cotton Printers all collapsing. However, Zeparu noted that Zimbabwe has major competitive advantages over other textile manufacturing countries. These include proximity to the industry's primary raw material cotton in addition to skilled labour and a highly literate population.-Online. BUSINESS
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