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Textile sector sinks under pressure of economic turmoil
03
Dec '09
Textile and apparel companies in the land locked country of Botswana are falling like nine pins, a fact, which was also admitted by the Assistant Trade and Industry Minister, Ms Dorcas, who said that a number of textile companies have collapsed or may collapse as a result of the economic recession and increased competition from the Far East countries.

To a question raised in parliament, Ms Dorcas, explained by saying that, Caratex, (the biggest textile mill in Botswana, employing over 5,000 workers) had mentioned that it was closing down in December, due to the current economic situation, but was keeping its options open about reopening the plant if the situation improved or a stimulus package was announced.

However, she said B&M Garments had indicated that it was not planning to close. Revealing details about the subsidies claimed by these two companies, with respect to the Duty Credit Certificate Scheme (DCCS), she said Caratex had received P480.7 million and B&M Garments P25.4million respectively.

She explained by saying that, She said the DCCS was a SACU incentive programme that was intended to make SACU firms competitive in international markets and in addition to the current incentives, the textile sector had put up a demand for a stimulus package, which got delayed due to the lengthy consultations with the sector.

She assured the house by saying that, as the recession had affected all sectors of the economy, the ministry had also been considering an overall incentives package to stimulate economic recovery, consequently, a cabinet memorandum on the proposed stimulus package for the textile and clothing sector was being finalized and was expected to be considered by cabinet shortly.

Replying to another question she said that, DCCS are used to offset custom duties paid on raw materials imported into the SACU region area and to qualify for the incentives, the companies must have exported outside the SACU area and clarified that DCCS are issued by each SACU member state and not by the Southern African Customs Union (SACU).

Fibre2fashion News Desk - India


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