Security Mills mum over packages

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THE TROUBLED Bulawayo-based textile company Security Mills (Pvt) Ltd is at loggerheads with its former employees over unpaid retrenchment packages and outstanding salaries, Southern Eye Business has learnt.

THE TROUBLED Bulawayo-based textile company Security Mills (Pvt) Ltd is at loggerheads with its former employees over unpaid retrenchment packages and outstanding salaries, Southern Eye Business has learnt.

GAMMA MUDARIKIRI OWN CORRESPONDENT

Former company workers said the textile firm owes them unpaid salaries for months and instead of clearing the outstanding balances in cash, the company gave them shares in the firm equivalent to the money they are owed.

They, however, felt they had been short changed as the company under judicial management is battling with low capitalisation, antiquated machinery, huge debt and already leasing some of its properties.

“We can’t be given shares in a company which is almost collapsing as payment for our outstanding salaries,” one the retrenched workers, strictly on condition of anonymity, said.

“We feel we are short changed. At the end of the day we will not get anything as we all know that the company is struggling,” he added.

Southern Eye has it on good record that company met its former employees last Friday after a row had erupted over the unpaid salaries.

Hundreds of former workers thronged the company premises demanding an explanation from management regarding their outstanding salaries which management had turned into shares.

“We met management yesterday (Friday) and they were not clear about the shares which were we were given to offset our outstanding salaries.”

“They just told us they were finalising the process and some of us haven’t even received the share certificates showing that we have been issued the shares,” another worker added.

The company judicial manager Tapiwa Chizana was not available for a comment by the time of going to print.

Security Mills (Pvt) Ltd was in 2010 placed under judicial management by the High Court of Bulawayo after accruing a staggering debt of close to $5 million in operational and other costs.

This was followed by the retrenchment of thousands of workers as the company was struggling to pay their salaries.

The company has now rented out their premises to a church organisation and other firms and is facing a plethora of challenges including stiff competition from imported cheap products.

Bulawayo companies continue to sing the blues due to the prevalent harsh economic conditions evidenced by 20 companies in the city having been put under judicial management as of June this year while 10 others were facing liquidation in the same period.

The textile industry in Bulawayo is the hardest hit and this is said to have contributed to a plunge in capacity utilisation to 39,9% from 44%.

This is largely due to shortage of working capital, antiquated machinery and stiff competition arising from cheap imports currently flooding the market.