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8 000 textile workers lose jobs
Shame Makoshori, The Zimbabwe Independent
October 20, 2006

http://www.theindependent.co.zw/viewinfo.cfm?linkid=12&id=7867&siteid=1

ABOUT 8 000 workers lost their jobs in Zimbabwe’s troubled textile sector over the past five years while the fate of 16 000 more is uncertain due an influx of cheap Chinese imports that have hurt demand for domestic products.

The local textile industry’s woes have been exacerbated by foreign currency and raw material shortages and the hyperinflationary environment in the country.

Textile industry executive Jane Mutasa told businessdigest that employment levels slumped from 24 000 workers in 2001 to 16 000 this year and more companies have warned they might wind up unless the problem of raw material and foreign currency shortages is solved.

Mutasa, who is the president of the Indigenous Clothing Manufacturers Association with a membership constisting of about 40% of the sector, ruled out prospects for immediate recovery, citing the escalating cost of production, rampaging inflation and Zimbabwe’s drying foreign currency coffers that have affected critical raw material imports.

"From a total of 24 000 workers in 2001 the sector now employs 16 000 people," Mutasa said. "This shows the rapid deterioration that we are grappling with. Companies have no fabric, manufacturing chemicals, dyes, spares and raw materials."

She added: "Millers are not producing enough fabric to keep factories running. Even if we get the fabric it is very expensive, which makes operations unviable. People’s capacity to buy clothes has been wiped away by inflation. They are prioritising food."

Textile companies have been affected by an influx of cheap Chinese goods that have resulted in the market abandoning local products.

Last week, the European Union also complained bitterly about Chinese shoes making inroads into that bloc and threatened to block further importation of the shoes to save EU companies from imminent collapse.

Mutasa said to avert further deindustrialisation, local companies required cheap working capital injections to bolster capacity.

The Reserve Bank of Zimbabwe provided companies with $2,7 trillion in old currency in working capital at 50% interest rates through the Productive Sector Facility in 2004.

But this was not enough to eliminate the distress in the clothing industry.

The National Union for the Clothing Industry (NUCI) said in the past 12 months it had handled hundreds of labour disputes as workers contested their employers’ decisions to slash working hours from 48 hours per week to 24 hours in response to the economic crisis.

One such company was Concorde Clothing, which streamlined its staff complement from 600 in 2001 to 170 and is operating below 50% capacity.

Even the streamlined staff had been working for three days per week in the past three months.

NUCI figures indicated that in the past two months, two more companies had liquidated, throwing about 300 workers out of employment.

Others applied to the National Employment Council for permission to send workers on unpaid leave until next year.

Clothing industry experts said this was a bad signal because traditionally this was the busiest time of the year when companies prepare for the festive season.

NUCI deputy secretary-general Joseph Tanyanyiwa said the scenario at Concorde Clothing was an emblematic of the crisis facing the entire industry.

He said one of the recent worst cases was the closure in 2004 of Export Processing Zones Authority licenced Fannick Clothing, which affected 1 200 workers.

Fannick exported 80% of its output to western markets.

Clothing industry executives who spoke to businessdigest last week said their decision to reduce working hours was meant to keep their companies running and retain jobs until the situation improved.

Zimbabwe’s manufacturing sector has been in steady decline since 2000 when government forcefully dispossessed productive white farmers from their land, replacing them with undercapitalised black farmers.

A Confederation of Zimbabwe Industries report last year said the sector would continue to record falling turnover unless corrective measures were put in place.

The economy is currently in its sixth year of recession, with no signs of recovery.

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