Maravi

Management denies ZCMT textiles still operational

Management denies ZCMT textiles still operational
Written by Gillian Namungala
Monday, December 01, 2008 3:37:07 AM

MANAGEMENT at Zambia-China Mulungushi Textiles (ZCMT) has denied reports that the company is still operating. And ZCMT owes a Chinese bank US$24 million in unpaid loan.

In an interview, deputy general manager Jeremiah Sinkende explained that ZCMT was not operational. Sinkende said what was operational was ZCMT’s subsidiary, Mulungushi Cotton and Cooking Oil Company Limited.

He said ZCMT had established two ginneries to lessen the cost of cotton by getting it straight from the farmers.

Sinkende said an out grower scheme was then introduced to enable the company have a stable source of cotton, leading to the establishment of Mulungushi Cotton and Cooking Oil Company.

He said the company was a revenue base and that it was still operating.

“Right now production is very slow because we have no cotton but when the company is at peak, it employees over 300 people, but now there are only 80 workers,” Sinkende said.

A tour at ZCMT revealed that only a skeleton of workers, mostly on casual basis, were working.

At Mulungushi Cotton and Cooking Oil Company, the workers interviewed said the company was operating but that there was less activity because they had no cotton.

“We are just few of us working most of the workers were last month laid off because there is no cotton seed,” said one of the workers.

However, they complained of being lowly paid by the company.

“We work for K5,000 per day which is nothing despite working for very long hours,” they said.

The workers appealed to the government to quickly address the problems the company was facing.

And ZCMT owes a Chinese bank US$24 million in unsettled debt.

Sinkende explained that the debt was a loan obtained under a joint venture, through the Development Bank of Zambia (DBZ) with the Zambian government as a guarantor.

“This is a loan the company got from Exim, a Chinese bank, which was to be paid in a period of 10 years but the company has failed to pay ten years down the line and now it’s not operating,” he said.

Sinkende, who said the debt was suffocating the company, said the government had to pay as it was the guarantor.

“This is the biggest debt the company has and if it has to pay we will be talking about US$30 million plus interest,” he said.

Sinkende said the company had also been sued by workers who were claiming unpaid repatriation.

“The workers are claiming K777 million in repatriation and also K1.5 billion in terminal benefits. The company only paid each workers three months per each year served as benefits while the workers demanded to be paid five months per each year served. So the worker have sued and if they win this case the company will have to pay about K1.5 billion,” he said.

He said ZCMT also owed Kabwe Municipal Council about K100 million in ground rates.

Sinkende explained that so far the company had not received any reports from the government on the way forward.

“What we know is that they are having discussions but nothing is coming up. It’s now two years,” he said.

Sinkende expressed fear that the delay to reopen the company would render the machines useless.

Recently, defence minister George Mpombo said the Zambian government was currently discussing with the Chinese government over the possibilities of reopening ZCMT.

The Zambian government has 34 per cent shares in ZCMT while the Chinese hold 66 per cent. The company was closed over two years ago.

Labels: MANUFACTURING, ZCMT

posted by MrK @ 3:37 AM