Too late to revive Bulawayo textile industry

Source: Too late to revive Bulawayo textile industry – The Standard May 22, 2016

THE move by the government to declare Bulawayo a Special Economic Zone (SEZ) for clothing and textiles is not going to help revive industry in that city because the sector has been overtaken by events, analysts have said.

BY MTHANDAZO NYONI

Last year, government declared Bulawayo a SEZ for textile, clothing and leather sectors in a bid to revive the once industrial hub of the nation.

The government is already crafting the SEZs Bill to enable its implementation.

However, economic analysts and industrialists say the move (specialisation in textile) is not going to help revive industry. They argue that the government should look at other sectors to revive the city’s industry. They have suggested information technology (IT), transport as well as leather, among other sectors.

Addressing delegates at the recently ended Zimbabwe International Trade Fair business conference in Bulawayo, First Mutual Holdings Limited group chief executive officer, Douglas Hoto said the government and business community should think of other ways of reviving Bulawayo as the textile industry was no longer feasible.

“In here [Zimbabwe], we try to do textile and Bulawayo is a particular town. Bulawayo must be revived [but] conversation is around wrong issues of things — that Security Mills and Merlin are going to come back to be what they were. That has been overtaken by events,” he said.

“We have to find something else to do with Bulawayo; not thinking that we are going to have textiles again. That is not going to happen. So we better do something about certain developments. We have to build business models that are constructive across industry and very competitive.”

Hoto said there were things that were part of the city’s competitive advantage and textiles were not one of them.
Economic analyst Reginald Shoko said there were no economic fundamentals to support the textile industry and urged government to focus on the beef industry, among other sectors.

“It’s a good policy but for textile it might be a mismatch or it has come late. I believe there are no economic fundamentals to support it. We need to ask ourselves how many textile companies are still operational and how many closed shop and why? Are they not going to be importing cotton? For leather, yes, the value-chain is big in terms of leather,” Shoko said.

More than 20 000 workers have been left jobless in Bulawayo over the past few years after over 100 firms, mostly in the manufacturing, textile and clothing sectors, closed down.

Many large companies that formed the backbone of the city’s industry have either closed shop, liquidated or have been placed under judiciary management.

These include Merlin, David Whitehead Limited, Textile Mills, Belmore Manufacturers and Ascot Clothing. National Blankets and Security Mills are under judicial management, while Cold Storage Company, National Railways of Zimbabwe, United Refineries, Dunlop Zimbabwe and Archer Clothing have down-sized, leaving thousands jobless.

Economic and policy analyst Butler Tambo said the textile industry would find it hard to thrive as companies were operating obsolete technology and could, therefore, not compete with products from Asian countries such as China.
“There are also issues of labour costs, imports as well as power outages. The cost of producing textile products is going to be very high and that will affect competitiveness,” he said.

He said the value chain sectors that might work in Bulawayo were the transport and beef industries, among others.
However, Confederation of Zimbabwe Industries president Busisa Moyo said leather, clothing and textiles value chains would create jobs. He said the aim was not to revive old companies only, but to attract new investment into the sector.

“We must take on a value chain impact approach. This means cotton growing will start to happen around Bulawayo to supply cotton, we will attract ginners and linters into Bulawayo, weavers and spinners will also be required to support the cluster in the zone,” he said.

Moyo said oil pressing and soap manufacturing were also by-products of the value chain and would be covered to make the other parts of the cluster successful.

“I think those lobbying for the IT sector must do so without discrediting previous work done by others, they must think of selling their IT services in part to the industries mentioned above,” Moyo said.

“I am sure the people you refer to are not aware that we are exporting leather to France for luxury goods to the likes of Hermes, a $4 billion company.”

“The livestock, meat and leather value chain cluster has a huge potential to boost the economy with an export prospect given that at its peak, the beef sector alone used to earn Zimbabwe $40 million annually,” he said.