TEXTILE company National Blankets is in discussion with potential investors seeking to inject $3,5 million to recapitalise and ward off competition from South African products flooding the market, the judicial manager has said.
MTHANDAZO NYONI OWN CORRESPONDENT
In August, 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Ndlovu told Southern Eye Business on Wednesday that the firm was facing challenges such as lack of working capital and outdated machinery.
He, however, said that should all be a thing of the past with the financial support from the government.
Ndlovu also said they were working on the product line to remain competitive and relevant in the industry.
“At the moment we are in full discussion with potential investors and we believe something tangible will come up soon. Business is tough due to the liquidity crunch, but we hope things will normalise as we move on,” Ndlovu said.
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.
Announcing the 2015 national budget last week, Finance minister Patrick Chinamasa proposed to extend a rebate of duty on imported inputs for use in the manufacture of clothing by a further 12 months.
The inputs include fabric and trims, such as sewing thread, shoulder pads and fasteners, among others.
This facility is aimed at reviving the clothing industry, which currently is in the doldrums.
