Published: 21 July 2014

TEXTILE giant National Blankets Limited requires $3,5 million working capital to bring back production to competitive levels, an official has said.

The firm, which was placed under judicial management in 2012 was now debt- free and has started addressing working capital constraints again sourcing funds from the Distressed Industries and Marginalised Areas Fund (Dimaf).

Last year, the firm secured $500,000 from Dimaf and the loan facility was directed at facilitating operational existence of the company as well as buying raw materials.

"We still have not raised the cash that we require. The figure is still the same. We require $3,5 million to have meaningful production.

"We are going back to the funder who gave us the Dimaf cash and we will send those papers to them; the shareholders are going back into their pockets to raise the money with their own other resources," said National Blankets judicial manager, Philip Ndlovu in an interview last week.

As part of National Blankets recapitalisation efforts, the firm received a $500,000 loan facility from CABS and this was directed at facilitating operational existence of the company as well as buying raw materials.

Although National Blankets was debt-free, the Bulawayo-based company was still operating below capacity.
"Employment level hasn't changed as capacity is still running far short of what is required.

"We cannot measure that (capacity utilisation) because we have no base, all we can say is how many people do we have compared to last year and the number is still the same. I know people talk about it (capacity utilisation) increasing by five percent but I don't know how they measure it and I don't have the statistics."

Added Ndlovu: "It's not only funding that will make it happen at National Blankets. There should be buying capacity from the market and the overall liquidity situation should improve in the whole economy because the product is given to the same buyers who have no cash; so it's not only one side of the story. But it combines a number of factors."

He said the company also required skills base to carry it forward.

The company, which was on the road to recovery in December last year announced that it had raised $2,6 million from the sale of Industrial Plot Number 39 to the National Social Security Authority.

Part of the proceeds amounting to $1,944,035 were transferred to Capital Bank as a means of liquidating the debt owing to the bank.

The remaining balance from the proceeds net of statutory costs, taxes and Bulawayo City Council's rates were made available for distributions to other creditors.

Recently stakeholders in the clothing and textile industry have raised concerns over the influx of cheap imported products mainly from the Far East saying the products were bringing unfair competition thus killing viability of local companies.

Asked about how cheap imported textile products have impacted on National Blankets viability, Ndlovu said: "We cannot measure that because at the moment we cannot fully supply the market so, we cannot go around and say we're having competition from outside. . . "

At its peak, the textile manufacturer used to export to regional countries that include South Africa, Botswana and Namibia.
- Oliver Kazunga I The Herald

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