BULAWAYO — Creditors of Archer Clothing Manufacturers on Friday approved its take-over by Harare-based Paramount Garments, saving it from liquidation, officials said.
The takeover will lead to the revival of one of Bulawayo’s oldest companies. It was established in 1953 and before its collapse was among the largest garment manufacturers in the country.
Only two creditors voted against the scheme, the liquidator said after the meeting at the Bulawayo High Court.
“We salute those creditors who supported our offer, as only a few were actually going to receive anything tangible for their debt to Archer. But they have taken a decision to support something which, while not benefiting themselves directly, is for the common good of Bulawayo and the country,” Paramount managing director Jeremy Youmans said, adding that he was yet to receive official confirmation of the voting result.
“There is a significant amount of investment needed to fully resuscitate Archer, refurbish the properties and capital machinery, human resource issues and working capital in stocks and debtors.”
Archer was placed under judicial management in 2010 after failing to raise working capital and subsequently provisional liquidation last year. Its machinery is outdated and expensive to maintain while the company also had to contend with power cuts and cheap imports.
Negotiations for the takeover started last year after the two textile firms initially entered into a cut, make and trim (CMT) deal. Under the CMT deal, Paramount supplied clothing material and labour while Archer provided the working space.
Its revival would be welcome news for the local clothing industry which collapsed as Zimbabwe’s economy declined sharply between 2000 and 2009.
At its peak, the textile sector used to produce about 135 million garments annually, compared to the current 18,7 million garments, industry officials say. The industry employed 35 000 workers, compared to current levels of just under 7 000.
The industry had an unlikely jobs bounce in 2013, adding over 800 jobs amid a marked slowdown in economic growth.
— The Source