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Govt intervenes to restore power to David Whitehead Textiles

Business
THE Ministry of Industry and Commerce has intervened in a case where Zesa Holdings cut off power to David Whitehead Textiles in Kadoma because of debts, resulting in the company failing to operate.

THE Ministry of Industry and Commerce has intervened in a case where Zesa Holdings cut off power to David Whitehead Textiles in Kadoma because of debts, resulting in the company failing to operate.

BY VENERANDA LANGA

Industry and Commerce deputy minister, Chiratidzo Mabuwa told the National Assembly recently that following the disconnections in August, the ministry engaged Zesa and worked out a payment plan in order to facilitate the re-opening of the textile manufacturer.

She was responding to a question from Kadoma MP, Phanuel Fani Phiri last week, who wanted to know government’s efforts to facilitate the speedy re-opening of David Whitehead Textiles.

“MPs might be aware that David Whitehead is currently closed following the disconnection of power supplies by Zesa in mid-August 2016 over an outstanding electricity bill,” Mabuwa said.

“The ministry has since engaged Zesa to reconnect power supplies to allow the company to re-open, while servicing the debt based on an agreeable payment plan.”

She said David Whitehead itself was, on one hand, owed huge amounts by various debtors, who have been failing to pay the company on time, while on the other, suppliers of raw materials were demanding cash upfront.

“As a result, the company is failing to raise the required working capital to satisfy other orders, as well as to pay service providers,” Mabuwa said.

“The ministry has since engaged some of the debtors, with a view of coming up with a debt settlement mechanism, and this should result in an improvement of the company’s working capital position so that it starts processing the orders that it has received.”

David Whitehead was said to have been struggling due to inadequate working capital.

Mabuwa added: “Government is currently negotiating with potential financiers for lines of credit to be extended to David Whitehead Textiles at concessionary rates. The ministry is currently involved in marketing David Whitehead Textiles as a potential suitor to prospective investors in the clothing and textiles industry.”

She said the shortage of cotton lint on the local market negatively affected production at David Whitehead Textiles, but the government had negotiated with ginneries to provide cotton lint to local manufacturers, including David Whitehead.

On import restrictions to cotton-based products, Mabuwa said Statutory Instrument 64 of 2016 removed cotton-based products from the open general import licence.

She said the government will continue engaging all stakeholders, including service providers, in order to come up with a win-win solution to the challenges currently bedevilling David Whitehead Textiles.