Business Reporter
DAVID Whitehead has started taking delivery of the new equipment for retooling its Chegutu and Kadoma plants, with the Government describing the development as critical towards re-establishing value chains in the cotton sector and boost the country’s clothing industry.
Finance and Economic Development Minister Mthuli Ncube, who recently met officials from David Whitehead said he was “pleased” with efforts being put in place to revive the company.
Minister Ncube said the revival of David Whitehead would provide a crucial opportunity for the country to create jobs and cut imports of textile-related products while pledging the Government’s commitment in stepping up efforts to support the industry.
Having been out of constant production for nearly two decades, David Whitehead has been given a new lease of life after Agri Value Chain (AVC) acquired the company.
Since 2006, the firm went through different processes of judicial management, a local form of bankruptcy protection due to financial and operational challenges.
At the time Agri Value Chain took over the business in 2019, the company was saddled with huge debts in relation to unpaid wages and salaries, creditors and statutory obligations.
While the new investor paid off all outstanding obligations, it took some time before the actual resuscitation program of the company began due to some pending legal issues.
In October last year, President Mnangagwa, represented by Industry and Commerce Minister Dr Sekai Nzenza launched the revival of David Whitehead, an exercise expected to be implemented in two stages, with US$20 million to be invested in the first phase.
“We have started receiving new equipment and we have already received 20 containers,” David Whitehead chairman Mr Pradyumn Ganediwal in an interview.
“About 60 containers are already on the high seas and we are expecting them soon.
“We have very happy that we are on course and everything is going according to plan.”
Mr Ganediwal, who is also the chairman of Agri Value Chain and Zimgold Oil Industries said in total, 200 containers of new equipment could be delivered. This would probably be the biggest investment in the textile industry in so many years, analysts say.
Already, massive civil works are ongoing at the Chegutu factory in preparation for installation of the new equipment. Preparatory works at the Kadoma plant—which produces yarn that feeds into the Chegutu factory are at a much-advanced stage.
Speaking to a local new agency, New Ziana, recently Minister Ncube said the Government was keen to ensure that an increasing portion of the vast amount of cotton produced in the country is locally value-added instead of being exported raw, a role David Whitehead and other textiles companies played in the past.
Following the collapse of the textile industry, about 70 percent of lint, or processed cotton is being exported due to a lack of capacity by the local spinners and the revival of the industry is expected to turnaround the fortunes of the sector.
The current spinning capacity cannot absorb the 30 percent of lint earmarked for the local industry because of little room to further value-add along the textile value chain.
“I was fairly pleased that David Whitehead Textiles is coming back, and the investor is into it. I had a meeting last week at my office with the Chief Executive Officer of David Whitehead and I am pleased with what I heard,” Minister Ncube said.
He said the Government was looking to support the local textile industry, using part of the Special Drawing Rights the country received from the International Monetary Fund.
“As a country, what we need to do is complete our cotton value chain. What we have done is I have allocated a portion of SDR (Special Drawing Rights) from IMF towards supporting the clothing industry for the manufacture of clothes locally,” he said.
Mr Ganediwal described the meeting with Minister Ncube as “very constructive.”
“We had a very constructive meeting with the Minister of Finance and he was happy to note our initiatives in the cotton value chain. We are happy that the Minister assured us that his office will provide the required support for the revival of David Whitehead,” said Mr Ganediwal.