eBusiness Weekly
Martin Kadzere
David Whitehead judicial manager Knowledge Hofisi has said the textile company will resume operations next month, initially targeting production of statutory-wear fabric.
DW, which last operated nearly three years ago recently secured a $2 million working capital facility from the Reserve Bank of Zimbabwe to help it resume production.
David owes various creditors about $13 million including workers’ outstanding wages.
“We have already started drawing down on the facility and the funds have been directed towards procurement of raw materials and repair of machine,” Hofisi told Business Weekly.
“We are doing preparatory works before production resumes in January,” adding the company would immediately recall 200 employees and produce 250 000 metres fabric per month.
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It was delisted 2009 following the acquisition of a controlling stake by Elgate Holdings, which has since been rescinded. It 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 focusing on domestic markets, it would also tap into regional countries.
Mr Hofisi outlined the roadmap for resuscitation of the company, starting with capital raising. After resuming operations, the company will embark on balance sheet restructuring to make it attractive to institutional investors. He is targeting cancellation of the judicial management in 12 months and return the company to shareholders.
“We are hoping that by December next year, the company should be operating well,” he said.
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.
Other committee members include Davison Gomo, former Zimbabwe National Army director (finance and administration) colonel Tutisa and textile expert Tararama Gutu.
In the medium to long term, the company will require as much as $50 million for new equipment.
In 2015, DW temporarily resumed production but could not sustain operations due to shortage of working capital.
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 totaled 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.
