Textile company David Whitehead eyes factory re-tooling
Business Reporter
TEXTILE firm, David Whitehead intends to raise $60 million in vendor financing from a supplier of textile equipment in Japan to fund the retooling of its factories, sources have said. Marubeni Tekmatex, a Tokyo-based company recently submitted an offer to David Whitehead to supply Zimbabwe’s former largest textile firm with an assortment of equipment including spinning, weaving, dyeing and finishing machines in a deal worth $58 million.
David Whitehead, which recently re-opened, but continues facing production interruptions due to use of obsolete equipment, is looking at re-tooling its factories in Chegutu, and Kadoma to boost capacity and efficiency to underwrite competitiveness. The source said the Bank of Japan would provide funding for the purchase of the equipment.
“The offer was received early last month and necessary responses were made to that effect so the negotiations are ongoing,” said the source who requested anonymity citing confidentiality.
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Judicial manager Knowledge Hofisi could neither confirm nor deny. “I wouldn’t want to be specific on what we are doing because of the sensitiveness around some of these issues but basically our mandate is to turnaround the company; thus we are pursuing efforts aimed at achieving this objective,” said Mr Hofisi.
David Whitehead, formerly listed on the Zimbabwe Stock Exchange has to accept or reject the offer by the end of January next year, the source said. David Whitehead was placed under provisional judicial management in December 2010 before confirmation of the final order in March this year. Mr Hofisi was appointed final judicial manager, taking over from Mr Wensely Militala.
The company used to produce at least 20 million metres of fabric per year while directly employing 3 000 workers and thousands in down and upstream industries. The company restarted operations, beginning with a shorter working capital turnaround route of converting yarn into fabrics, then dyeing, printing and finishing of the fabrics.