11/06/2018 | Press release | Distributed by Public on 11/06/2018 07:53
Jubilation as government intervention revives a collapsed giant textile factory in Kwazulu-Natal
Glodina, one of South Africa's largest towels manufacturing company, has resumed its operations in Hammarsdale on the outer west of Durban, thanks to government's rational intervention.
Today, the MEC for Economic Development, Tourism and Environmental Affairs, Mr Sihle Zikalala and the CEO of the Industrial Development Corporation (IDC), Mr Geoffrey Qhena officially opened the plant after it closed down due to financial cash flow challenges.
Mr Zikalala, said the KwaZulu-Natal government intervened because in the turnaround programme of Glodina to avoid the devastating effects of the closure of Glodina on the economy of the region.
'We had extensive engagements with the management and shareholders of Glodina to understand the nature of the challenge, and working together, we devised mitigation strategies,' he added.
As part of the intervention, a multi-stakeholder task team comprising the Department of Economic Development, Tourism and Environmental Affairs, Trade and Investment KwaZulu-Natal, IDC, and the South African Clothing and Textile Workers Union was established.
The department played a key role in linking potential investors with Development Finance Institutions such as IDC and KZN Growth Fund, added Zikalala.
'We are very humbled by the swiftness with which the Minister of Economic Development, Mr Ebrahim Patel and the IDC have handled the matter. This is, indeed, how the developmental state should respond to the pressing economic needs of the communities on whose behalf it exists.'
After the completion of a due diligence process, the IDC approved a funding package of R150 million for an IDC-owned entity to acquire the assets from the previous owner, a move that resulted in the factory resuming its operations.
Mr Zikalala commended KAP Industrial Holdings, the former shareholders of Glodina for selling Glodina at a price that would allow the purchasing company to reasonably operate in a manner that will save jobs and remain competitive in the industry.
The new entity had committed itself to the retention of more than 211 jobs of the 500 jobs lost when the company closed down, he added. 'We have no doubt that the number of jobs will increase exponentially as the company gradually regains its previous customers.'
Ms Gugu Mlotshwa, one of the employees who have been retained, was full of praise for the government.
'What government has done is highly commendable. When the company closed down, we never thought it would be saved. We really want to thank our government for what they have done. We would like to see the company grow so that it can accommodate all employees who lost their jobs.'
Bongani Shisa Tembe
Cell: 082 327 2600
Tel: 033 328 8000