Workers lose jobs with closure of yarn plant

08 Jul '10

2 min read

Closure of Da Gama's spinning unit in East London during the last week, has rendered over 100 workers jobless. The unit that spun yarn for fabric production in the Zwelitsha factory, suffered on account of financial adversities encountered by the textile industry.

Officials at the plant stated that, they experienced adverse trading conditions as the costs of raw materials went high, as also huge volumes of imported textile entered the domestic markets. Unluckily, all these factors together affected the margins, which along with high cost of production, headed the company to a point where it was required to reconsider its future production strategies.

Employees and the South African Clothing and Textile Workers' Union (Sactwu), two months back, in the month of April, were notified regarding this decision. Pursuant to this, 99 employees were sacked during the last month, whereas 16 of them were shifted to Zwelitsha.

The company that, retrenched about 1,000 workers in 2004, bestowed its 1,600 employees with a stake of R 45million in the company, thus converting the foreign-owned company to an employee-owned undertaking with employee's holding 45 percent of the stake. The company was the first one in the South Africa's textile industry to initiate such an employee share ownership programme.

Though, several employees of the company did agitate that, as they left the company the previous week, they were not handed over their shares, nor do they have any clue as regards the prevailing circumstances.

According to the employees, anything in this regards that they last heard of was at the time of announcement and then a year after, when they were each paid a dividend of R 300.

Also they were told that, another R 300 had been reserved in a trust fund on behalf of each of the employee. Thus, families of these employees as well the society were under an impression that they were a wealthy lot then, but that now they are all jobless, they are hoping if something turns out of this agreement.

Fibre2Fashion News Desk - India

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