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Textile major Seardel to downsize operations
13
Apr '09
Seardel, one of the largest textile manufacturers in the country has recently announced a restructuring plan for the company. In a statement the company said, that if needed, it would need to close a few of the operating divisions.

The textile major employs around 1,400 employees amongst its spinning, weaving, finishing and denim divisions and dependent on its consultative process with the required parties, would opt to close any of the departments.

The company said, the South African textile industry has been under tremendous pressure since the last few years, due to many factors like import of cheap textile goods, legally and illegally which was undermining the sector.

It also added that it was also very difficult to compete with state owned companies which attracted funding through the Industrial Development Corporation (IDC) and also many companies received subsidies, since they were state owned.

It went on to say that, there have been massive hikes in input costs and most of these could not be passed on to their buyers and also that there has been non-compliance in application of the minimum conditions of employment by its competitors.

All these factors made it impossible to operate as a purely commercial enterprise and had translated into huge losses for the company and it had looked for all possible avenues to rectify the situation including re-organizing, re-structuring and down-sizing operations.

The company adds, over the past 10 years, it has spent over R360 million in plant and machinery in order to raise efficiency levels, but was now left with no option, but to, close down a few of the operations and sell assets.

Fibre2fashion News Desk - India

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