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IDC takes over Sheraton Textiles

12
Dec '08

On December 10, The Industrial Development Corporation of South Africa (IDC) got the approval of South Africa's Competition Commission to take over Sheraton Textiles, formerly known as W M Eachus, one of South Africa's largest household textile manufacturers.

Textile manufacturers in South Africa have been struggling to survive competition from the Eastern part of the globe, illegal imports and a retail recession.

“The IDC's involvement in Sheraton in the face of significant factory closures and will secure the jobs of more than 500 workers and allow the group to continue its turnaround strategy. The IDC's involvement is intended to be a medium term one pending eventual sale to possible Black Economic Empowerment investors,” told Mr Nick Steen, the Managing Director at Sheraton Textiles to Fibre2fashion.com.

The IDC will invest Rand28.5 million, which will go towards reducing the company's debt. It now owns 80 percent of the Company and did not pay for the shares. The rest of the shares are owned by management, which will be retained.

The Government of South Africa introduced quotas on Chinese imports, in order to rescue the struggling textile sector by providing support to local manufacturers, save jobs and reduce the number of factories shutting down.

Fibre2fashion News Desk - India