adminover the years from operating ageing and obsolete machinery.
Industrial Development Corporation of Zimbabwe Limited spokesperson Mr Derek Sibanda said the main challenge facing Modzone Enterprises was shortage of cash resources to finance rehabilitation to restore operational capacity to cater for the supply gap in local and exports markets.
“The traditional source of financing was the local financial institutions but they are currently unable to provide meaningful funding as they are undercapitalised and offering short tenors of between 90 to 180 days for working capital and long-term loans for capex,” he said.
The group is jointly owned by the Iranian Pension Fund, Jaham Paham, that holds 82 percent through its investment company Saba Jahad Full while IDCZ holds 18 percent.
He added that the company was facing competition from an influx of cheap imported fabrics and blankets largely from the Asian markets and the lack of reliable and viable utility tariffs. Modzone Enterprises, he said, was also struggling to expunge utility and statutory arrears of over US$1,5 million.
“The Zesa bill originates from translation of Zimbabwe dollar charges to United States dollars in 2009, which is still to be resolved.
“The clothing and textiles sector requires effective protection from the importation of low-priced and sub-standard Chinese products and second-hand clothes that have a negative impact on the viability and growth of the industry.
“If protected adequately the sector has the potential and capacity to retain jobs. Modzone Enterprises currently employs about 600 people,” said Mr Sibanda.
Mr Sibanda said Modzone Enterprises remained the largest operating textile company in the country following the closure of David Whitehead Textiles in Chegutu and the liquidation of Cotton Printers in Bulawayo. At its peak the textile sector employed over 18 000 people.
Modzone Enterprises has three operating units, namely Travan Blankets (Pvt) Limited, Afroran Spinners (Pvt) Limited and Irazim Textiles (Pvt) Limited.
The companies should re-open after the annual shut down upon securing agreement with Zesa regarding the arrears.
The company still looks forward to the recapitalisation pledged in April 2010, from Iran.
The group is involved in the manufacturing, wholesale and retail of cloth, fabric, blankets, yarn and other related products
Online Reporter