Categories: Stories

Struggling National Blankets appeals to RBZ for cheap finance

Textile company National Blankets, which is currently operating at 20 percent of its capacity, has appealed to the central bank to make cheap funds available for local industry for recapitalisation.

In 2013, the company received a $500 000 loan facility from the Central African Building Society (CABS) under the Distressed and Marginalised Areas Fund (Dimaf) but the money failed to change its fortunes.

Acting chief executive, Freedom Dube, told Reserve Bank of Zimbabwe governor, John Mangudya during a tour of the firm that it needs at least $3.5 million to recapitalise and increase production.

“If we can get capital today we can ramp up production to 50 percent for a start. Currently, we are producing about 200 000 blankets per year against our historical capacity of 2 million,” said Dube.

“We benefited from the Dimaf but the conditions were too stringent for example the period of paying back the money was very short considering that our operation is seasonal. We appeal that the financial institutions can relax such terms.”

Dube said that they sold one of their buildings to NSSA as a way of raising money to pay creditors and appealed to the governor to make cheap funds available in banks so that they can access them for recapitalisation.

Last August, its creditors agreed to convert their undisclosed debt into equity to take  the company out of judicial management.

Mangudya promised to address the issue, adding that ailing companies like National Blanket should be assisted financially so that they remain competitive.

“Competitiveness is the solution. It doesn’t make sense to continue importing things which we can produce locally,” he said.

Dube said they are currently employing 100 people but they expect the number to increase with time.- The Source

(389 VIEWS)

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

ZiG loses steam, falls against US dollar for five consecutive days

The Zimbabwe Gold fell against the United States dollar for five consecutive days from Monday…

November 22, 2024

Indian think tank says Starlink is a wolf in sheep’s clothing

An Indian think tank has described Starlink, a satellite internet service provider which recently entered…

November 18, 2024

ZiG firms against US dollar for 10 days running but people still do not have confidence in the currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), firmed against the United States dollars for 10…

November 16, 2024

Zimbabwe among the top countries with the widest gap between the rich and poor

Zimbabwe is among the top 30 countries in the world with the widest gap between…

November 14, 2024

Can the ZiG sustain its rally against the US dollar?

Zimbabwe’s battered currency, the Zimbabwe Gold, which was under attack until the central bank devalued…

November 10, 2024

Will Mnangagwa go against the trend in the region?

Plans by the ruling Zimbabwe African National Union-Patriotic Front to push President Emmerson Mnangagwa to…

October 22, 2024