Tri-star Apparel's unit shutters, another Agoa dream vanishes

18 Oct '06

2 min read

Tri-Star Apparels unit in Bugolobi which is also known as Agoa has closed down without any proper explanations with plant's Managing Director, Vellupilai Kanathan assuring the reopening of plant in a month time.

The unit had been promoted by the Government to cash in on United States' Africa Growth Opportunity Act (Agoa), which allows African countries to export goods in US market tax free. Tri Star imports fabric from Asia and then makes finished clothing products.

Government had provided sizeable subsidy to the plant and flaunted it as an 'ideal' solution for country's economic problems like unemployment and poverty. It was also expected to provide stable and rich ready market for struggling cotton farmers.

Tri-Star was guaranteed a loan of $5 million from Uganda Development Bank; got tax waiver on equipment imports and was also given free premises with large sums spent on training workers by the government.

Government blamed the plant administration for the mess, especially Director Kananathan for draining public funds even while he vehemently refutes all allegations hurled at him.
The company has a history of facing labour unrest as well.

Uganda's export under Agoa to the US was a mere $4.5 million compared to $278 million by Kenya in 2005. The plant has not even utilized a single local cotton bale against high expectations.

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