Reopening of declining Mulungushi Textile comes as a precious gift to people of Kabwe

The re-opening of the moribund Zambia-China Mulungushi Textile Joint Venture seven years after it was shut has come as a special gift to the people of Kabwe in this Jubilee year.

The factory has been leased to Mohammed Enterprises Tanzania Limited Group (MeTL) for a period of 12 years. The new investor will in the next three months assess the condition of the machinery at the plant, before resuming operations at the textile plant.

The deal was signed in Kabwe on Wednesday. ZCMT Joint Venture Limited vice-board chairperson Rose Salukatula signed on behalf of Zambia and the Chinese partner, while Gulan Dewji signed on behalf of MeTL Group. The signing between ZCMT Joint Venture Limited and MeTL has an option for renewal after the initial 12 years elapsed.

Ms Salukatula described the signing of the agreement as a historic moment for both countries. She said that it was the Government’s desire that the leasing of the factory provided for further investment and working capital to boost the cotton industry and promote economical and technical cooperation in the cotton industry, given the background that MeTL had in the cotton industry.

According to State House, the project will entail investing a total of US$59 million in the next three years in the existing plant and in a denim plant with a 20 million metres production capacity per annum and has targeted to create 2,000 jobs.

With this capital and the existing infrastructure the company will soon come to life and contribute to the wellbeing of the people of Kabwe.

The products from Mulungushi Textiles were unable to compete with the cheap imports. This made it difficult, if not impossible for the company to meet various obligations to its employees, suppliers, contractors and the State. Then Mulungushi Textiles Limited remained as the biggest employer after the civil service.

Foreign exchange was in short supply, which made it difficult for the firm to bring in raw materials and spare parts for its machinery. As a result they were plunged into heavy debt.

The flood of cheap imports of clothes and other textile products throttled the life out of the heavily indebted Mulungushi Textiles Limited. As a result, the company was forced to offload a bulk of its work force.

The company was opened and closed several times. As a last ditch effort to save it Zambia and China went into a joint venture to revive its operations. But operational and market-related problems persisted until the company closed again.

On several occasions senior Government officials assured the people of Kabwe that the State was frantically looking for a serious investor for the Zambia-China Mulungushi Textile.

Mr Dewji, who is chairperson of MeTL, said that he was happy to be part of the signing ceremony and disclosed that $10 million would be pumped in Mulungushi Textiles to resume operations. Also more than 2,000 people were expected to be employed once operations began.

Mr Dewji, however, said that the firm would diversify its operations by engaging in other activities such as cotton growing, among other areas of interest.

He said that his company was a reputable entity in Tanzania which had employed more than 20,000 people and that it was confident of contributing to job creation in the country.

He has assured the Government of Zambia and the people of Zambia that they will perform to expectations of people and work hand in hand with them but this will require hard work by all. The efforts will definitely bring positive results and help uplift the living standards of the people of Zambia.

This is a significant step in the government’s determination to revive the manufacturing sector and increase the country’s foreign exchange earnings.