GIANT textile firm, National Blankets, has ceased operations despite showing signs of recovery in the last three years.
The Bulawayo-based company has been battling viability constraints that saw it being placed under judicial management since 2012.
When Business Weekly visited the factory along Khami Road on Tuesday, the company’s reception and entrance into the factory was under lock and key showing that it has been in that state for months as the padlock was rusty.
The environment around the firm’s plant and premises was quiet, also giving the impression that there was no activity in terms of production. The factory’s administration department has also been closed. Two officials who were at National Blankets’ premises, revealed before being aware that they were talking to a reporter, that their company had ceased operations. They also said the administration department at the factory had been closed.
“The company’s administration department is no longer functional,” said one of the officials. Another official only said: “National Blankets is not functioning”, before referring this paper to the company’s judicial manager, Mr Philip Ndlovu.
Earlier on Mr Ndlovu declined to be interviewed on the state of affairs at the ailing factory. “No, I don’t want an interview,” he said before hanging up his phone.
Affirmative Action Group national vice president, Mr Sam Ncube, also confirmed that National Blankets was no longer operational. “It’s no longer working and that’s a big blow to industry,” he said.
In May, National Blankets was reported to be beyond resuscitation stage with Mr Ndlovu indicating to creditors in a letter that the company was insolvent as the liabilities were significant, exceeding assets by a wide margin. “It is not realistic to expect that the company will become a viable concern. Instead, liabilities continue to increase with the results that the position is worsening. For this reason, it is my opinion that the company be wound up,” he was quoted as saying in the letter.
In 2014, the textile firm was seemingly out of the woods when creditors agreed that all debt be converted to equity at the rate of $0,50 per ordinary share.
According to the 2013 judicial manager’s report which this paper is in possession of, National Blanket secured a $500 000 loan facility from the Central African Building Society (CABS) under the Distressed and Marginalised Areas Fund.
However, the money was not enough to change the company’s fortunes. Also in 2013, the firm sold off some of its property to pension fund, the National Social Security Authority and settled its debt to the now defunct Capital Bank and service providers like Bulawayo City Council a combined total of $2,6 million.
National Blankets faced a drastic fall in the demand for its products, which were woven blankets and no longer have a market. The firm also used antiquated machinery that was installed in 1940.