R150m gov intervention saves KZN towel maker
7 Nov 2018 - by
Glodina Lifestyle, one of South Africa's largest towel manufacturing companies, has resumed its operations in Hammarsdale on the outer west side of Durban, thanks to government's R150-million intervention.
On Tuesday, the MEC for economic development, Sihle Zikalala, and the chief executive of the Industrial Development Corporation (IDC), Geoffrey Qhena, officially opened the plant.
Earlier this year, the 60-year-old company employing 500 workers closed shop after one of its majority shareholders, Steinhoff International, got into financial difficulties.
Zikalala said the KwaZulu-Natal government had intervened in the turnaround programme of Glodina to avoid the devastating effects of the closure of the company on the economy of the region.
"We had extensive engagements with the management and shareholders of Glodina to understand the nature of the challenge, and working together, we devised mitigation strategies," Zikalala said.
As part of the intervention, a multi-stakeholder task team comprising Zikalala's department, IDC, and the South African Clothing and Textile Workers’ Union was established.
Zikalala said after the completion of a due diligence process, the IDC had approved a funding package of R150 million for an IDC-owned entity to acquire the assets from the previous owner, a move that had resulted in the factory resuming its operations.
He said his department had played a key role in linking potential investors with development finance institutions such as IDC and KZN Growth Fund.
"We are very humbled by the swiftness with which the Minister of Economic Development, Mr Ebrahim Patel, and the IDC have handled the matter. This is, indeed, how the developmental state should respond to the pressing economic needs of the communities on whose behalf it exists," he said.
Zikalala commended KAP Industrial Holdings, the former shareholders of Glodina, for selling Glodina at a price that would allow the purchasing company to reasonably operate in a manner that would save jobs and remain competitive in the industry.
The new entity has committed itself to employ at least 211 of the workers whose jobs were among the 500 lost when the company closed down.
"We have no doubt that the number of jobs will increase exponentially as the company gradually regains its previous customers."
Gugu Mlotshwa, one of the re-employed workers, said: "What government has done is highly commendable. When the company closed down, we never thought it would be saved.
"We really want to thank our government for what they have done. We would like to see the company grow so that it can accommodate all employees who lost their jobs".