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Zimbabwean textile sector needs $200m to recapitalize
09
Aug '14
Zimbabwe’s textile sector needs a minimum capital infusion of least US$ 200 million in the short-to-medium term to recapitalise, says a  latest report released by the Zimbabwe Economic Policy Analysis and Research Unit (ZEPARU) .

Around $50 million is required for plant upgrades, while a similar amount is required to support cotton farmers, the research paper revealed.

In order to achieve plant and technology upgrades to raise production capacity, the Zimbabwean textile sector also needs to recapitalise and restructure.

In order to reduce production costs, technology upgrade is necessary to raise production capacity since textiles is a high volume, low margin business, ZEPARU said.

At its peak, the Zimbabwean textile sector used to employ around 51,000 people which made it the among the country’s major employers. But by 2005, employment in the textile sector fell to 28,822.

The garment sub-sector alone used to employ around 13,500 people in 2009, which sharply fell to just 4,748 in 2012, the report said.

The paper however noted that the country’s textile industry has competitive advantages over neighbouring textile manufacturing countries, which include proximity to the main raw material – cotton. In addition Zimbabwe has a highly literate and skilled labour force.

In its observations, ZEPARU said that textiles and the clothing sub-sector is an important arm of the manufacturing sector, but there is need to create an enabling business environment in Zimbabwe.

Investors will always follow where there is potential for profit and where risks are predictable and that the country should create competitive advantages through legislation, it observed.

“The collapse of the clothing industry and the resultant job losses has left a very big structural hole in the production sector. There is no doubt that the recovery and more development of the cotton chain has potential to accelerate industrialisation in the future”, ZEPARU said.

In the context of a liberal market and global competitive pressures, the challenge before the Zimbabwean government is to utilise the cotton resources to industrialise the textile and clothing sector, the paper concluded.

Fibre2fashion News Desk - India

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