Merlin’s offshoot ramps up production after relocating from Zim

via Merlin’s offshoot ramps up production after relocating from Zim – NewsDay Zimbabwe September 10, 2015 by Mthandazo Nyoni

Northern Textile Mills (Nortex), an offshoot of the now defunct Merlin, has reportedly ramped up production to 100% after relocating from Zimbabwe to Botswana, a clear indication that the country is missing a lot in terms of investment.

Following the introduction of the Indigenisation and Economic Empowerment Act some few years ago, a number of companies have exited the country citing the tough business environment.

According to the latest Bulawayo City Council (BCC) minutes, council officials went to Francistown in Botswana for an exchange visit in July and witnessed that Nortex, established in 1990, had risen from humble beginnings after relocating from Zimbabwe, into a massive and fast-growing entity.

“It has captured a significant market share in the Southern African Development Community region including Zimbabwe and South Africa. It is currently targeting export markets in Asia, the European Union and United States of America and is set to be a force to reckon with in the global market in cotton towel products,” read part of the minutes.

According to the minutes, the company used to get its yarn from Zimbabwe since the country had the best quality but with the drying-up of that source, the company has had to look elsewhere, notably South Africa.

“The company was at full capacity utilisation and the tour through the plant brought memories of the now-defunct Merlin Limited in Bulawayo,” read the minutes.

Unlike in Zimbabwe, Nortex, an impressive towel and napkin manufacturing company, enjoyed a lot of support from the government of Botswana, BCC observed.

“There were incentives and a significant amount of trade facilitation. No red tape or interference from government, and the company provides the much-needed employment,” BCC said.

“Indeed the government has provided financial support to the company and many others in difficult times by paying wages and other incubation support to avoid retrenchments. It had ISO9001 certification and had invested in quality
state-of-the- art equipment, hence its focus now on the global market.”

The company is a water-based industry requiring about 400 000 litres of water per day.

However, in view of the scarcity of the commodity, the company recovers 70% of this amount through recycling.

Merlin was once among the largest textile companies in the country with over 2 000 employees, but now has a staff complement of less than 253 workers and 27 managers. It is part of Bulawayo businessman Delma Lupepe’s group of companies.

The company survived liquidation over a decade ago and was placed under judicial management for a third time in December 2011. It suspended production in October 2010 to minimise losses when capacity utilisation fell to a lowly 20%.

At full capacity, the plant at Merlin had the potential to process 120 tonnes of lint per month.

The company owes creditors more than $4 million.