Government steps in to rescue jobs at Hammersdale industrial area
More than 200 jobs out of the 500 that were lost when a KwaZulu-Natal textile company shut due to cash flow problems have been saved — thanks to a successful intervention by the provincial government.
On Tuesday‚ KZN economic development‚ tourism and environmental affairs MEC Sihle Zikalala and Industrial Development Corporation (IDC) CEO Geoffrey Qhena officially re-opened the plant at Glodina Black Label in Hammersdale near Pietermaritzburg.
The plant was shut down after Glodina‚ which produces quality towels and supplies the hospitality industry and some of SA’s top retailers‚ experienced financial difficulties‚ forcing its holding company‚ Kap Industrial Holdings‚ to dispose of the textile company as it was no longer making profit.
It was at this point that Zikalala intervened in a bid to save jobs in the already struggling Hammersdale industrial area‚ once considered as the textile capital of the province.
Before Glodina’s closure‚ 1‚200 workers had also been laid off by RCL Foods-owned Rainbow Chicken in February last year in a bid to stay afloat after years of fighting cheap imports from the EU‚ Brazil and the US.
Zikalala’s intervention included extensive engagements with other stakeholders in a bid to come up with a turnaround strategy to avoid the devastating effects of the closure of the company on the region’s economy.
This resulted in the formation of a task team which included his department‚ Trade and Investment KZN‚ the IDC and the South African Clothing and Textile Workers Union.
Zikalala said on Tuesday that his department had played a key role in linking potential investors‚ with the development finance institutions such as the IDC and KZN Growth Fund.
“We are very humbled by the swiftness with which the minister of economic development Ebrahim Patel and the IDC have handled the matter. This is indeed how the development state should respond to the pressing economic needs of the communities on whose behalf it exists‚” said Zikalala.
After the provincial government intervention‚ the IDC approved a funding package of R150-million for an IDC-owned entity to acquire the assets from the previous owners of Glodina — a move which resulted in the factory resuming its operations.
Zikalala commended Kap Industrial Holdings for selling Glodina at a price that would allow the purchasing company to reasonably operate “in a manner that will save jobs and remain competitive in the industry”.
The new entity has committed itself to retaining more than 211 jobs of the 500 jobs lost when the textile company closed down.
“We have no doubt the number of jobs will increase exponentially as the company gradually regains its previous customers‚” said Zikalala.