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Re: [ujeni] Economic fallout again!

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  • Kristof & Stacia Nordin
    This came as a shock to me, too. I had no idea what what happening with them. Kristof and I were in there a few times recently and commenting on how nice
    Message 1 of 2 , Sep 11, 2002
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      This came as a shock to me, too.  I had no idea what what happening with them.  Kristof and I were in there a few times recently and commenting on how nice everyone is there and how efficiently they run.  I don't know how it keeps happening!  Stacia
      ----- Original Message -----
      From: Weber
      Sent: Monday, September 09, 2002 11:49 PM
      Subject: [ujeni] Economic fallout again!

      I thought David Whitehead cloth was one of the shiny lights of quality that Malawi produced with good export potential, even here.   Drat!!!  How does this keep happening?       Cathy
       
       
       
      Malawi to shut biggest
                     textile factory
                                                          
                     Malawi has said it will shut down the country's
                     largest textile factory, putting more than 2,000
                     people out of work, after plans for privatization
                     failed.

                     The government has decided to stop
                     subsidising the factory because of heavy
                     financial losses, the Commerce and Industry
                     Minister Peter Kaleso said.

                     Only last month Mr Kaleso said that the
                     government was looking for a strategic partner
                     for the state-owned David Whitehead and
                     Sons (DWS) factory and he was predicting a
                     "booming" future.

                     The closure comes even though Malawi has
                     seen textile exports surge since it signed the
                     African Growth and Opportunity Act (Agoa)
                     treaty with the US in September 2001.

                     In the last year the industry's yearly growth
                     rate was reported to be 120%.

                     Failed privatisation

                     DWS is the main source of cotton yarn, fabrics
                     and African prints exported from Malawi
                     according to the local Confederation of
                     Chambers of Commerce and Industry.

                     The company hit financial difficulties in the
                     early 1990s when the government ended its
                     monopoly status - in-line with International
                     Monetary Fund and World Bank policies - and
                     liberalised the textile market.

                     The resulting imports of second-hand clothes
                     from the Far East virtually destroyed domestic
                     production in Malawi, as in many other African
                     countries.

                     DWS was one of the companies that launched
                     Malawi's privatisation programme but like many
                     others has now been shut down after failing to
                     find a buyer.

                     In a letter of intent to secure poverty
                     reduction funding, Malawi promised to liquidate
                     DWS in July 2002.

                     DWS is 51% owned by the Malawi Government
                     and 49% by the state owned Admarc
                     Investments Holding Company.

                     The government has set aside about 140m
                     kwacha ($2m; *1.3m) to compensate workers.

      *****



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