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ZCMT-JV to contribute to the economic revival of Kabwe

YarnsandFibers News Bureau 2014-08-11 15:30:00 – Zambia

The Zambia China Mulungushi Textile Joint Venture Limited (ZCMT-JV) complex in Kabwe after lying idle for seven years is expected to begin operations in the next three months and is anticipated to create over 2,000 jobs mainly for the local people.

 

Lease agreement has been signed between ZCMT Joint Venture Limited and Mohammed Enterprises Tanzania Limite. This follows leasing of ZCMT-JV assets by its shareholders to Mohammed Enterprises Tanzania Limited (MeTL) Group for a period of 12 years. The Tanzanian company will be injecting an initial US$10 million in this textile firm. Many Kabwe residents have welcomed MeTL Group to the district and are hopeful that the company will positively contribute to the economic revival of the region.

 

Cotton growers who depended on the textile firm were also left without a market for their produce. The closure of the ZCMT-JV adversely affected the economic and social wellbeing of Kabwe residents.

 

The MeTL Group was incepted in the 1970s and it is one of the largest trading houses in Tanzania. It is the largest textile producer in the Sub-Saharan Africa with ownership of 21st Century Textiles Limited, Afritex Limited and Musoma Limited, all based in Tanzania.


Novatexmoque, a former Mozambican parastatal, is a fourth textile mill which MeTL Group acquired in 2007.

 

The combined annual production capacity of MeTL Group’s four mills stands at 100 million metres of fabric.

 

The ZCMT-JV was forerunner to Mulungushi Textiles of Zambia (MTZ), which was established in 1983 by the Government, due to under capitalization in 1996 to revitalize it, the Government brought on board a Chinese firm Qingdao Textiles Holding Group Co. Limited which injected US$24 million in the textiles plant.

 

This partnership saw the birth of ZCMT-JV Limited, with the Chinese firm owning 66 percent shares while Zambia through the Ministry of Defence retained 34 percent shareholding. But due to poor management, high cost of production, unfair competition, obsolete equipment, erratic supply of raw materials, failure by clients to liquidate their debts and a bloated workforce, ZCMT-JV ceased production on June 30, 2007.

 

It is Government’s desire that the leasing of this factory will provide for further investment and working capital to boost the cotton industry in Zambia given the background that MeTL has in the cotton industry.

 

The ZCMT-JV board of directors is aware of the challenges associated with the textiles industry and it has pledged to support MeTL Group should it encounter any challenges in its operations.

 

And MeTL Group has assured that it is in Zambia for serious business and will commence operations of the textiles enterprise in three months’ time after completing rehabilitation of the equipment at the dysfunctional factory.

 

Job creation will start immediately and it will increase as they start processing. They will then go for spinning, weaving and ginnery because they need to have out growers to get cotton. It’s a matter of one year then they might have 2,000 people working.

 

President Sata is happy about the new development. The project will entail investing a total of US$59 million in the existing plant in the next three years. MeTL Group will renovate, invest in new machinery and operate the ZCMT integrated plant. Most importantly, MeTL Group will endeavor to work within the laws of Zambia.

 

Cotton out grower schemes comprising about 10,000 members will be established by the third year of the factory’s operations.

 

Kabwe Chamber of Commerce and Industry president Sydney Tembo described MeTL Group’s investment in the district as a golden jubilee gift for the local people of Kabwe. They have waited for this one for a long time and are very happy.

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