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Biggest textile mill announces closure
19 Nov '09
2 min read
The textile sector in the African continent is going through real tough times. Textile mills are closing down with amazing regularity. The latest to announce closure is the 5,000 employee strong Caratex Botswana.
These textile mills have not been able to withstand the global recessionary trends which have been sweeping across the world since the last one year. Caratex has announced that it will close from December 10, 2009.
Mr. Craig Chow, Managing Director of Caratex Botswana said that it was becoming difficult to compete with other cost competitive countries like China and Bangladesh since their industry has been heavily subsidized by their respective countries.
He blamed the delay by the Botswana Government in announcing incentives for the industrial sector for the closure. He said the earlier incentive scheme which helped Caratex grow had been withdrawn and had not been replaced with any other subsidy.
Caratex Botswana was set up as Joint Venture Company in 1998, which grew by leaps and bounds. Employee strength increased from 500 in 2001 to 1,300 in 2003 and currently between six plants it provides jobs to more than 5,000 employees.
The company also took advantage of the AGOA and COTONOU agreements, under which it could export duty free products to the US and EU respectively. Considering that Caratex was the second biggest employer in Botswana, this closure will leave a big impact.
These textile mills have not been able to withstand the global recessionary trends which have been sweeping across the world since the last one year. Caratex has announced that it will close from December 10, 2009.
Mr. Craig Chow, Managing Director of Caratex Botswana said that it was becoming difficult to compete with other cost competitive countries like China and Bangladesh since their industry has been heavily subsidized by their respective countries.
He blamed the delay by the Botswana Government in announcing incentives for the industrial sector for the closure. He said the earlier incentive scheme which helped Caratex grow had been withdrawn and had not been replaced with any other subsidy.
Caratex Botswana was set up as Joint Venture Company in 1998, which grew by leaps and bounds. Employee strength increased from 500 in 2001 to 1,300 in 2003 and currently between six plants it provides jobs to more than 5,000 employees.
The company also took advantage of the AGOA and COTONOU agreements, under which it could export duty free products to the US and EU respectively. Considering that Caratex was the second biggest employer in Botswana, this closure will leave a big impact.
Fibre2fashion News Desk - India
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