National Blankets retrenches as capacity falls below 16 percent

Dumisani Nsingo  Senior Business Reporter
THE country’s leading blanket manufacturer, National Blankets, is in the process of rationalising its workforce and operations as capacity utilisation has fallen to just under 16 percent.At its peak in the late 1980s and early 1990s the company used to employ about 1 000 people but it now has a workforce of just over 150.

The company’s outgoing judicial manager, Mr Philip Ndlovu, of PNA Chartered Accountants said the blanket manufacturer was feeling the pinch of the economic downturn just like most of the industries operating in the country and as such it was devising a number of strategies to keep itself afloat.

“At the moment we are on our annual shut down and in the process of moving from the big factory, which has high overheads to the small factory. We are doing this as part of our rationalisation process.

“With the economy right-sizing we are forced to rationalise because you need to match your resources with your capacity. It also means getting the right people doing the job and that way we get value for our money,” Mr Ndlovu said although he could not disclose how many workers will be affected by the exercise.

He said the rationalisation process started in October last year.

Last year it was removed from judicial management after offsetting its debts that threatened it with closure five years ago.

It had been placed under judicial management in 2012 following viability problems.

“We are aiming to improve our capacity utilisation to around 20 percent this year. We are, however, still in need of about $3 million, which will go towards the purchase of raw materials.

“We are still sitting on stocks from last year. We had anticipated improved business during last year’s festive season but there wasn’t much. Our biggest client is the Government and various institutions,” he said.

Mr Ndlovu added that the company enjoyed a fair share of the export market in the region.

“We also enjoy export runners from Mozambique, Zambia, Namibia and Malawi and these markets are still there and need to be built on. The influx of cheap blankets into the country has nothing to do with our viability if it has it means our cost structure is not right,” he said.