Nortex to make investment of P3m on machinery to increase production

Northern Textiles (Nortex), Botswana’s largest towel manufacturer which presently produces six tones of towels a day are planning to increase production to 6.5 tonnes in the current financial year, which began this month in a bid to sustain growth. The company has announced that it will invest P3 million on machinery, said the managing director, Mukesh Josh. They will not necessarily be growing the company, but will be maintaining growth.

He indicated that the machinery would be in the dyeing house and make-up department. He further noted that as part of sustaining growth, the company employed 70 workers in the middle of last year bringing the total workforce to 480. The 70 workers are mostly machine operators.

The company has been doing well after experiencing a slump due to unfavourable economic conditions experienced between 2010 and 2012. The company in 2012 shelved its expansion plans, which were anticipated to cost P30 million.

Josh insisted the company still does not have plans to expand extensively, but favours sustaining its current size and business model.
He explained that the profit margins grew by five percent in the just-ended financial year as compared to the previous year (which ended on June 30, 2013). He attributed the profit to improved business fortunes of the clothing retail stores in South Africa that buy 90 percent of the company products. Ten percent of the company sales go to Zimbabwe and Nambia chain stores. However, Josh noted that the Zimbabwean market is not reliable.

Sometimes their customers in Zimbabwe do not pay them on time. They sometimes stop supplying them and resume once they have settled their debts.

Josh singled out the new government regulations aimed at protecting the environment as one major challenge the company currently faces; and that the regulations are impacting negatively on the company’s operations.

The regulations strictly do not allow discharge of polluted water into the environment. They however, do not have adequately skilled people to operate the waste-water treatment plant in order to comply with the regulations and as such it affects our operations more often. They do bring in experts to train their people to operate the plant, but they are struggling to catch up.

Nortex is on track to becoming a leading supplier of top-quality cotton towel products to the global market. The company’s prime function is to manufacture top quality terry towels, micro cotton towels, knitted towels and baby napkins. Nortex is now looking for opening in European and North African markets.