Textiles industry at 10% capacity

via Textiles industry at 10% capacity – The Zimbabwe Independent June 27, 2014 by Taurai Mangudhla

After the formation of Zimbabwe’s unity government in 2009 and the subsequent introduction of the multiple currency regime to end a decade of economic decline characterised by hyperinflation, some local companies were revived and retail shops restocked.

The more recent challenges have come from the liquidity crisis and deflation.

As these few companies struggle to survive under a tough operating environment, Zimbabwe’s textiles and clothing industry is still seriously weighed down by the pre-inclusive government challenges and operating below 10% capacity according to government statistics.

At its prime, the clothing and textile industry in Zimbabwe used to employ 24 000 people. The number has since declined to 4 000.
This perennial crisis has seen what used to be the country’s largest lint processor and largest textiles industry employer David Whitehead Textiles (DWT) being placed under liquidation.

DWT’s weaving plant in Chegutu , spinning plant in Kadoma and Gweru was for the second time placed under judicial management in December 2010, after a failed reconstruction attempt between 2005 and 2008.

The textiles industry’s challenges stem from broader economic constraints which begin at the production of cotton.

Mashonaland West cotton producer Shephered Manonga said farmers lack proper production material and training.

“The old farmers used to go for training at the cotton training centre in Domboshava and we need to have that because to say a new farmer means you have no knowledge,” he said.

The farmer education system crumbled after the land reform programme of 2000 which disrupted commercial farming across the country.

Manonga said educational and technical support programmes would enable farmers to improve their yield per hectare as well as quality.

He said ginners need to value add the cotton product as much as possible to maximise financial returns along the chain.

“We also have a marketing problem because our cotton is being sold to extract the lint which means we are throwing away other products that can be useful and add value to our cotton,” added Manonga.

African Cotton and Textiles Industries Federation executive director Rajeev Arora said value addition would increase returns from cotton by as much as nine times.

Zimbabwe Clothing Manufacturers Association (ZCMA) chairman Jeremy Youmans said the local clothing industry is suffering due to the influx of cheap and often substandard imports which do no t pay duties.

“Our biggest challenge is that duties are not being collected as they should at the boarders which creates an unlevel playing field but as an industry we are in revival, we are rebuilding , we are growing and believe we can continue to do,” said Youmans in an interview.

He said currently local clothing companies account for around 25% of Zimbabwe’s consumption, while the balance was being imported.

The industry, Youmans said, suffers a myriad of challenges including high input costs, high utility costs and erratic power supply.

“We need an improvement on the supply chain, the cost of doing business and imports tarrifs,” he said.

“Clothing’s big advantage is that it does not require a lot of capital compared to other businesses and it’s a very huge employer.”

To address this, the Zimbabwean government and development partners are coming up with a Cotton-to-Clothing Strategy for Zimbabwe.

The strategic document, currently under review and scheduled to be launched in September this year, looks at short and long term objectives to revive the textiles industry.

Development of the strategic document is funded by part of the European Union’s €11 million European Development Fund for the successful implementation of the Cotton-to-Clothing Strategy across a number of African countries. Zimbabwe’s strategic document is in the second and last stage for considerations.

At the second Cotton to Clothing Strategy in Zimbabwe second consultative forum, Industry and Commerce Ministry director in charge of enterprise, Stanislaus Mangoma, said the textile and clothing subsectors have played a major role in the development of the Zimbabwean economy contributing 2% to the country’s GDP.

Mangoma was reading a speech on behalf of Industry and Commerce secretary Abigail Shonhiwa.