eBusiness Weekly
The Mozambican government is considering reopening what was once one of the largest textile factories in the country, and on the African continent, Textáfrica de Chimoio, closed in 2002 due to economic challenges that it was facing.
Prime Minister Carlos Agostinho de Rosario made the announcement visiting the mothballed facility and holding a meeting with management while on a visit to Manica.
“We, as a government, want to see how we could assist in re-opening Textfrica. Whether it means us supporting the ideas or seeing how far our responsibility to offer support might extend, we have decided that we will sit down to outline the ideas,” he said.
Asked what investment would be required to reopen Textfrica, Do Rosario was cautious, saying only that in due course, the government would make an announcement, and that, so far, the idea was for all stakeholders interested in resuscitating the company to sit down together and analyse the situation.
Former Textfrica of Chimoio administrator Paulo Dias Sandramo concurred that the cost of reopening the factory was still to be ascertained.
“As you can see, first we have to look at the building itself, in this case, to prepare it to house new machinery. We need to repair the electrical systems, compressed air, air conditioning, all this already shows that it would mean a lot of work on the building itself,” he said.
This comes as Zimbabwe’s textile firm, David Whitehead Limited (DWTL), has just resumed operations at its Chegutu factory after receiving a $2 million bailout from the Reserve Bank of Zimbabwe.
The Mozambican textile company would give competition to DWTL, especially in the region.
The company had ceased operations about two years ago due to working capital constraints.
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.
It was delisted in 2009 following the acquisition of a controlling stake by Elgate Holdings, which has since been reversed after it failed to pay for the stake.
DWTL used to produce 20 million metres of fabric per year while directly employing 3 000 workers and thousands in down and upstream industries.
While the company will start by focusing on supplying the domestic market, it would in future also tap into regional countries, judicial manager Mr Knowledge Hofisi said recently.
He also said that after resuming operations, the company would embark on balance sheet restructuring to make it attractive to institutional investors. — Business Weekly/New Ziana.
