A HARARE textile firm Paramount Garments (Pvt) has entered into a partnership with the Bulawayo Clothing concern Archer Clothing Manufacturers (Pvt) Ltd as part of efforts to revive the entity currently under provisional management.
GAMMA MUDARIKIRI OWN CORRESPONDENT
The company was placed under judiciary management in 2010 after being seriously hit by a shortage of working capital, obsolete machinery, power challenges and cheap Asian imports which remain a major constraint for textile and clothing industries in Bulawayo and beyond.
In an interview with Southern Eye Business last week, Paramount Garments (Pvt) Ltd managing director Jeremy Yomans said a deal had been cut with the troubled Bulawayo firm, revealing his company had been working with Archer Clothing Manufacturers on the ‘cut-make-trim deal’ since June this year.
According to the deal, Paramount Garments will chip in with material and labour in the manufacturing process while Archer will be providing the working space.
Meanwhile, Yomans revealed his firm was waiting for Archer management to give an update on the court judgment concerning the liquidation of the company which was expected to be passed last Friday before they could fully express interest in taking over the business.
“We are waiting to hear from Archer management about the court decision concerning the liquidation before we make any decision with regards a possible takeover,” Yomans said.
Last month Southern Eye Business revealed that officials from the Harare-based company visited Archer Clothing Manufacturers were negotiating a possible takeover of the business.
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The Belmont-based firm is battling with a myriad of problems, top among them a harsh economic environment and a liquidity crunch which has seen several local firms close or list in critical condition.
In the same year, the clothing company scaled down operations laying off 270 contract workers and 210 permanent employees. The company is one of many entities wrecked by a decade of economic downturn.
As of July this year, at least 20 companies in the city had been put under judicial management while 10 others were facing liquidation.
Some of the Bulawayo firms under judicial management include textile giant National Blankets, Tabs-Avon Lighting, Asmara, Belmont Leather, Textile Mills, Security Mills and Universal.
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.
The recently concluded Confederation of Zimbabwe Industries congress resolved that the lobby boards will engage the government to consider increasing tariffs on certain goods to protect the local industry.
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