TEXTILE company National Blankets is still struggling to court suitable investors to inject $3,5 million fresh capital to recapitalise and ward off competition from South African products flooding the market, the judicial manager has said.
MTHANDAZO NYONI OWN CORRESPONDENT
In August, the creditors of the struggling firm agreed to convert their undisclosed debt into equity, a deal which would take the company out of judicial management.
Judicial manager Philip Ndlovu told Southern Eye Business that the firm was still in talks with the High Court in a bid to finalise the equity deal.
He said the firm was facing challenges such as shortage of working capital and outdated machinery.
“We are still courting investors and we have to work on our product line since at the moment blankets are no longer profitable because of the summer season. We need to work on prices because they are high and not competitive,” Ndlovu said.
He ruled out the perception that textile firms like National Blankets were struggling because of cheap imports, saying the problem lay on cost structures.
National Blankets, one of the country’s largest textile firms, was placed under judicial management in 2012 following viability constraints.
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The company has capacity to produce 60 000 blankets a month, but current production is estimated at between 15 000 and 20 000.
The liquidity challenges and use of antiquated machinery has seen most local textile companies fail to compete with imported products.
Several Bulawayo-based textile firms have closed shop in recent times, under pressure from imports and lack of capital.
