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Stakeholders to revive Kaduna textile mills

By Businessnews Staff on September 16, 2014

All hope is not lost on the defunct textile industries in Kaduna as there are plans to revive the ailing factories.

Our correspondent learnt on Friday that the moribund Kaduna Textiles Limited and Arewa Textiles Plc abandoned over a decade ago could return to business early next year.

The Chairman, Coalition of Closed Unpaid Textiles Workers Association, Mr. Wordam Simdik, in an interview with our correspondent, said the Board of Directors of Kaduna Textiles Limited and the owners of Arewa Textiles Plc had decided to sell some of the firms’ landed properties and old equipment and use the proceeds to pay workers’ entitlements, amounting to N2.6bn.

Simdik also said some foreign investors had shown interest in the renewed efforts to bring back the industries.

Already, he said several consultative meetings had been held and appeal letters written to the Northern Governors’ Forum and other stakeholders to ensure the revival of the industries as well as settle all outstanding benefits of the workers in closed factories.

He expressed the joy that all the stakeholders’ efforts to ensure the restoration of the factories over the years had not been futile.

Simdik said, “The Board of Directors of Kaduna Textiles Limited has met and they have taken a decision to see how they can sell some of their landed properties to pay the workers’ entitlements. A consultant that came from Switzerland wants to invest in the KTL. All our scrap machines are being sold out now.”

Simdik said a similar thing was happening at the Arewa Textile Plc as the management of the company had settled issues with its receivers, Union Bank Plc.

He said, “For Arewa Textiles, there is a very good development there. The management has been working hard to ensure that Arewa is reopened and the workers’ entitlements are paid. Right now, they are clearing all the trees and grasses around the mills that have been abandoned for the past 13 years.

“They have already packed out the machines so that they can bring in new ones. Formerly, there was a problem between them and Union Bank. I believe that the management of the bank has met with the board of directors and reached an agreement. They are working towards paying the gratuity before the investors arrive, that is between now and December.”

The General Secretary, National Union of Textile Garment and Tailoring Workers of Nigeria, Mr. Issa Aremu, confirmed the development about the Arewa Textiles.

The Kaduna Textile Limited, owned by the 19 northern states, had been shut for production since December 2002 while Arewa Textiles closed shop in December 2004.

The textile factories in the northern part of the country were renowned for the production of an array of traditional designs, but were faced with many challenges, including mismanagement, thus restricting the contribution of the sector to the economy.

However, the challenges facing the sector have persisted as the Manufacturers Association of Nigeria in its recent report noted a decline in the capacity utilisation of the textile, apparel and footwear sector from 50.8 per cent in 2012 to 44.9 per cent in 2013.

Meanwhile, the National Union of Textile Garment and Tailoring Workers of Nigeria has said the functioning textile companies in the country are on the verge of liquidation due to the suspension of issuance of the Negotiable Duty Credit certificates by the Federal Ministry of Finance.

The union, in a communiqué issued at the end of its recent workshop, said the companies that accessed the Cotton Textile Garment Loan made available by the Bank of Industry were finding its repayment difficult.

“Most textile companies had availed the Cotton Textile Garment loan from the BOI since 2010. The tenure of the loan matures in 2016. The textile companies are finding it difficult to pay the instalments due to low capacity utilisation and liquidity crisis caused by above problems and had appealed to the BOI for extension of the repayment period by 10 years and flexibility to redeem the Export Expansion Grant certificates in lieu of loan instalment.”

[Punch]

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