LEADING textile producer, David Whitehead Textiles Ltd, has presented President Robert Mugabe with a comprehensive report of its operations and the way forward in what appears to be a move to stop political interference by Zanu PF heavyweights in Chegutu.
The move comes amid media reports that government is contemplating taking a 25% stake in the firm. The report said politicians in the area were fomenting industrial unrest in the company to effect a “ regime change”. This has adversely affected plans to resuscitate the company which was suspended from the Zimbabwe Stock Exchange last year.
Contacted for comment yesterday David Whitehead acting chairman, Willie Muringani, could not disclose the names of the Zanu PF politicians said to be interfering with the company’s operations but said “some local political heavyweights in Chegutu” were causing instability by pushing for worker unrest.
He however could not confirm that the company had presented a turnaround report to Mugabe. Muringari said although the firm was facing economic challenges it had devised contingency measures aimed at turning its fortunes around.
He dismissed as “speculative talk” reports that government wanted a 25% equity in the firm.
According to the report, titled 2004-2006 Turnaround Strategies and Update, which was leaked to businessdigest this week, the textile manufacturer gives detailed information pertaining to its turnaround plans and an analysis of their strengths, weaknesses, opportunities and threats as it steps up efforts to remain viability.
The document says that continued meddling in the affairs of the company by “influential” politicians who have been instigating labour unrest has seen workers downing t tools thus cutting productivity at a David Whitehead fabric factory in Chegutu and a spinning factory in Kadoma, which are currently operating at below capacity.
In giving reasons for the company’s distress, the report stresses that: “Admittedly we are not operating at full capacity at two of our three factories, with only the Gweru plant working to capacity.
“This is primarily due to foreign currency shortages. Without foreign currency we cannot import required spares, dyestuffs and chemicals to process the local and export fabrics.” The report also rests blame on coal shortages, which have contributed to the loss of about $50 billion in turnover in the last 12 months; cotton lint supply problems and sour labour relations.
It adds that the workers committee and the trade union have filed two failed High Court applications for judicial management of the company, raising a lot of slanderous falsehoods against the company and its management.
“There has recently also emerged sinister collusion between the same divisive unions and influential politicians. This has become the only factor preventing the company from completing its turnaround and moving on.”
On the proposed way forward to rescue the company, the report said David Whitehead would implement a zero gearing position concept as “this is the only way to survive in manufacturing during volatile hyperinflationary times”.
The company intends to boost its export potential currently averaging US$50 000 to US$100 000 per month. The report also proposes two solutions to raise productivity.
The first is to among other things “identify and facilitate the remittance of owed funds to the relevant and respective principal companies of local suppliers for these requirements”, while the second requires “advance utilisation of expected export proceeds, but still following all submission regulations of required documentation”.
This entails adhering to all export FCA utilisation and RBZ cession percentage proportions applicable at the time.