David Whitehead to re-open after $2m govt injection
By Blessings Mashaya
Zimbabwe’s government has injected $2 million into David Whitehead to resume operations. David Whitehead, a large textile firm that used to employ 2 500 people in Chegutu, 100km southwest of Harare, collapsed in 2011 after being placed under judicial management since 2006.
A deal had been reached with Zimbabwe Asset Management Company (Zamco) — a special purpose vehicle to buy secured bad debt from the banking sector — allowing David Whitehead to resume operations.
“We are going to make a statement jointly, myself, Zamco and workers of David Whitehead,” Chegutu West Zanu PF MP Dexter Nduna told the Daily News.
“Zamco has given $2 million to David Whitehead. The government has ploughed more than $100 million in the cotton industry and they have given $2 million to ailing David Whitehead. We are expecting the company to be reopened soon.
“The resumption of David Whitehead operations would create employment. The benefits of the reopening of this company are expected to be felt in the communities in Chegutu and Kadoma.”
David Whitehead has been under judicial management since 2006. A new investor came on board in 2008 promising to inject millions.
By the time the investor exited in 2010, the textile giant had lost more than what was injected.
David Whitehead used to produce about 20 million metres of fabric per year while directly employing 2 500 workers and thousands in down and upstream industries.
Zimbabwe’s textile sector used to be one of the country’s major employers, providing jobs to about 51 000 people at its peak.
Job losses in the clothing industry between 2009 and 2012 totalled 8 752, or 65 percent after dollarisation.
The textile industry fared even worse than the clothing industry during the same period with such giants as David Whitehead, once the sector’s largest firm, Cone Textiles or Modzone, Merlin and Cotton Printers all collapsing. Zimbabwe has major competitive advantages over other textile manufacturing countries.
These include proximity to the industry’s primary raw material cotton, in addition to skilled labour and a highly literate population. DailyNews