BULAWAYO-BASED tannery Wet Blue Industries, which was placed under judicial management last month, has resumed operations amid revelations that the firm is targeting processing 1 200 hides per day.
Wet Blue judicial manager Chrispen Mwete of C Mwete and Company told Southern Eye Business they had processed a few hides so far, but were happy with progress at the tannery.
“The firm has resumed operations though at a small scale and we have processed a few hides,” he said. “Five machines are now working and we are targeting processing 1 200 hides per day.”
Mwete said they injected fresh capital of about $8 000 and for the firm to operate at 100% capacity they needed about $200 000.
He said Wet Blue was easy to turn around because the technology had not changed much in the sector.
Wet Blue is one of the companies in Bulawayo that were placed under judicial management this year due to the deteriorating economic situation in the country.
The High Court placed 10 firms in key industries under judicial management and about three under provisional liquidation.
Economic analysts have said the situation was exacerbated by a serious liquidity crunch afflicting the economy, high cost of utilities as well as aggressive taxation by a dollar-hungry government.
Meanwhile, Mwete said the government and financial institutions should support companies placed under judicial management to save them from collapse.
He said they were finding it hard to manage some companies under judicial management because the government and even financial institutions were not supporting them.
“Finance houses don’t want to fund companies under judicial management and even Dimaf (Distressed Industries and Marginalised Areas Fund) doesn’t consider them,” Mwete said.
“I think those companies need funding or support from the government.
“The statement kills the hope of companies under judicial management and we appeal to policy makers to revise that.”
Mwete added that the government should also give them power because at the moment company directors wielded a lot of power at firms under judicial management.
He lamented lack of cooperation from workers as well as directors.
“Hostility comes from workers and directors, the reason being that the judicial management is not understood,” he said.
“Directors would be thinking they still possess power they had before the company was placed under judicial management while workers have a misconception that judicial managers come with money.”
Dimaf was formed in 2010 to help struggling companies to retool.
The fund, however, continues to be a contentious issue with some companies in the designated areas complaining that access to loans is almost impossible.
The minimum requirements for companies to qualify to access the funds include two years’ accounts in the form of management accounts or financial accounts, acceptable collateral, clean tax records, projections for capital expenditure loans, budgets and cashflows, among others.
Companies hardest hit by the economic challenges of the past decade were mainly located in Bulawayo, once the country’s industrial hub that employed thousands of people.
Over 100 companies have closed shop since 2009 in Bulawayo, leaving more than 20 000 workers jobless.