Textiles Revival Good

The moribund Zambia-China mulungushi Textiles (zcmt) in Kabwe is set to re-open after seven years of dormancy, following the signing of a 12-year lease agreement between the company and mohammed Enterprises Tanzania Limited (metl).
As the prime shareholders, metl will be responsible for assessing the condition of the machinery at the plant, before resuming operations at the facility that closed in june 30, 2007.
In its new form as metl mulungushi textiles, the firm will receive an investment of us$10 million from the investor and create in excess of 2,000 jobs, this of course is in line with Government’s agenda of employment creation.
The move to revive the factory is a welcome development as since its closure, Kabwe has inherited the tag of “ghost town” with a significant portion of residents living in squalor.
This development also provides for further investment to boost the local cotton industry and promote economic and technical cooperation in the cotton business.
zambia has performed poorly in the textile business and that is why we continue to rely on imported clothing which is purchased at exorbitant prices.
With the resurrection of mulungushi, the country will be able to develop its textile market and attract elusive markets aboard.
We are informed that metl is a reputable entity in tanzania which had employed more than 20,000 people therefore, it should not be much of a challenge to achieve the target of creating 2,000 jobs for Kabwe residents.
The ministry of labour should have jotted down this development and the new investor must have been acquainted with the provisions of the Zambian labour laws.
Creating jobs is one thing and what Zambians require is decent employment that will earn them income close to meeting the requirements of the basic need basket.
metl must leave room for skilled Zambians to occupy managerial positions and make decisions that will influence sustainability in the operations.
this, among other things, should have been stated as an integral part of the lease agreement because zambia has enough skilled manpower who can manage companies without the input of expatriates.
plans to reintroduce the industrial development commission (idc) seem to be dragging for one reason or the other, although the latest is that a management team has already been appointed to run the firm.
The concept behind establishing the idc is that it should be a conglomerate that will oversee the operations of all parastatal companies.
these include companies wholly-owned by government such as zesco, Zamtel and the nitrogen chemicals of zambia among others.
This platform feels that Government must use the idc to acquire minority shares in large private companies such as the metl mulungushi textiles, to monitor operations effectively.
the zambia Consolidated Copper Mines investment holdings (zccm-ih) is a good example of how government can hold minority shares in a large private company just for the purpose of monitoring for compliance.
zccm-ih holds 20 per cent of shares in all the mining companies and this allows government to take the companies to task in cases of issues pertaining to zambian labour laws.
It must be understood that an investor can pull out of any company at any time as majority shareholders and in the end the ordinary people will suffer because they are left jobless.
Such was the case with kawambwa tea company in luapula province which has been placed under receivership pending court proceedings.
The investor, gombe holdings of zimbabwe indefinitely pulled out of kawambwa tea leaving the company with serious debts to government agencies including zesco, zambia revenue authority and napsa.
if government had at least 20 per cent of the shares in kawambwa tea, that investor could have been brought to task to account for the debts and leave the company in a stable state.
Now government is having a torrid time searching for another investor for the tea factory because the debt burden is too colossal to inherit.
There is an investor from south africa who was ready to revive operations at the defunct mansa batteries and negotiations are progressing with the zambia development agency.
Whether or not the firm will be leased, government and the south african investor should consider a joint venture so that responsibilities of the company are shared.
Government on one hand will have the interests of zambians at heart while the private investor will focus on making profits to maximise on their returns.

Source : The Times of Zambia

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