Jobs car­nage in Mafeteng

As govt fails to hon­our prom­ise to bailout tex­tile com­pany

Sunday Express - - FRONT PAGE - Lekhetho Nt­sukun­yane

LeaD­ING tex­tile firm, Pre­cious Gar­ments, has an­nounced the clo­sure of its Mafeteng sub­sidiary, P and T, next month, leav­ing 407 bread­win­ners in the cold.

ac­cord­ing to Pre­cious Gar­ments man­age­ment, the de­ci­sion to shut down the fac­tory on 16 april had since been com­mu­ni­cated to the work­ers and fol­lowed gov­ern­ment’s fail­ure to hon­our an agree­ment the two par­ties signed on 28 May 2012.

Un­der the deal, gov­ern­ment was sup­posed to in­ject money into the firm, which had been shut down in 2010 due to viability chal­lenges. Fol­low­ing the sign­ing of the agree­ment, the com­pany, which man­u­fac­tured t-shirts and jeans for ex­port mostly to the United States of amer­ica, was im­me­di­ately re­opened, with gov­ern­ment hold­ing 49 per­cent shares, while P and T owned the re­main­ing 51 per­cent.

Reads part of the agree­ment signed by then Trade and In­dus­try, Co­op­er­a­tives and Mar­ket­ing and Fi­nance and Devel­op­ment min­is­ters, Leketekete ketso and Ti­mothy Tha­hane re­spec­tively, on be­half of gov­ern­ment, with Pai Yun-Hsin and Tzai ChungHsia rep­re­sent­ing Pre­cious Gar­ments in the deal: “The shareholding held by the gov­ern­ment of Le­sotho through its agen­cies, will es­ca­late over a pe­riod of three years to 100 per­cent by the third year. Pre­cious Gar­ments un­der­takes to ex­tend sup­port to P and T Tex­tile through place­ment of or­ders and pro­vi­sion of both tech­ni­cal ex­per­tise and man­age­ment of the com­pany.

“The con­tri­bu­tion of the gov­ern­ment of Le­sotho, and its agen­cies, to the share cap­i­tal will be through the build­ings, while P and T Tex­tile will con­trib­ute through its ma­chin­ery. In ad­di­tion the gov­ern­ment of Le­sotho un­der­takes to pro­vide, on an an­nual ba­sis, fi­nan­cial sup­port to P and T Tex­tile at lev­els to be determined by both par­ties for a du­ra­tion of up to three years to cover op­er­a­tional costs.”

How­ever, ac­cord­ing to Pre­cious Gar­ments re­gional manager, Len­gana Gerald Tšepe, gov­ern­ment had not met its end of the bar­gain, hence the de­ci­sion to close shop once again.

“This agree­ment is very clear that the gov­ern­ment un­der­took to pro­vide an­nual sub­si­dies to cover the com­pany’s op­er­a­tional costs. How­ever, since the deal was sealed way back in 2012, gov­ern­ment has not put any­thing into the com­pany. I met with LNDC (Le­sotho Na­tional Devel­op­ment Cor­po­ra­tion) of­fi­cials, as the gov­ern­ment agency in­volved in the part­ner­ship, and learnt that as per the agree­ment, Pre­cious Gar­ments was only sup­posed to pro­vide train­ing and su­per­vi­sion at P and T so that gov­ern­ment would then takeover skilled and ex­pe­ri­enced staff,” he said

The LNDC, Mr Tšepe fur­ther ex­plained, had played its part by not col­lect­ing rent for the build­ings P and T Tex­tile has been us­ing since the re­open­ing.

“The LNDC hon­oured its part of the agree­ment, but gov­ern­ment did not ful­fil the fund­ing ar­range­ment. You see, the other rea­son why Pre­cious Gar­ments closed P and T in 2010, was be­cause of the high costs in­volved in op­er­at­ing a fac­tory in Mafeteng, when most of the ser­vices the com­pany needed to op­er­ate prof­itably, such as cus­toms, were in Maseru.

“again, for in­stance we pay ex­tra to trans­port goods from Mafeteng to Dur­ban via Maseru, and when the fac­tory re­opened in 2012, gov­ern­ment had agreed to take care of th­ese ex­penses.”

Mean­while, the Sun­day Ex­press has ob­tained a copy of a let­ter the pre­vi­ous Pre- cious Gar­ments re­gional manager, Nkopane Monyane, wrote to Dr ketso on 26 Fe­bru­ary 2013, plead­ing with gov­ern­ment to hon­our its deal lest the com­pany closed shop, leav­ing many leav­ing stranded.

The let­ter reads: “Fur­ther to the agree­ment be­tween the Le­sotho gov­ern­ment and our­selves re­gard­ing sup­port to P and T Tex­tile, we wish to high­light the fol­low­ing: The agree­ment was en­tered into in May 2012 for ur­gent im­ple­men­ta­tion. The said un­der­tak­ing has not pro­gressed, and there ap­pears no in­di­ca­tion that it will soon be im­ple­mented. In the mean­time, the com­pany has con­tin­ued to carry un­af­ford­able ex­penses and huge losses.

“The sit­u­a­tion is un­for­tu­nately bur­den­ing Pre­cious Gar­ments and could af­fect 4000 work­ers at the lat­ter fac­tory. Un­der the cir­cum­stances, we humbly call upon your lead­er­ship to re­lieve us of this sit­u­a­tion through the fa­cil­i­ta­tion of this agree­ment. a con­tin­u­ance of the cur­rent sit­u­a­tion will only force us into an in­evitable busi­ness de­ci­sion of ter­mi­nat­ing op­er­a­tions in Mafeteng, how­ever un­de­sir­able this might be. We there­fore, hope you will be in a po­si­tion to take the nec­es­sary steps that should ben­e­fit the coun­try, Hon­ourable Min­is­ter.”

How­ever, ac­cord­ing to Mr Tšepe, this let­ter was never re­sponded to, prompt­ing man­age­ment’s de­ci­sion to cease op­er­a­tions next month. The Sun­day Ex­press yes­ter­day con­tacted Dr ketso, who said gov­ern­ment did not hon­our the agree­ment be­cause Pre­cious Gar­ments man­age­ment was not “co­op­er­a­tive, par­tic­u­larly a cer­tain lady from Tai­wan”.

He added: “as gov­ern­ment, we un­der­took to pro­vide fi­nances for the fac­tory to sus­tain its op­er­a­tions. You will no­tice that Dr Tha­hane, who was then fi­nance min­is­ter, was a sig­na­tory to the deal. This means there wasn’t go­ing to be any prob­lem from the gov­ern­ment side, but we could not pro­ceed when some man­agers at the com­pany were not co­op­er­a­tive.

“There was one lady, ap­par­ently from Tai­wan, who seemed to have a prob­lem with the agree­ment and was very dif­fi­cult to deal with.”

Dr ketso added gov­ern­ment had a “vi­sion to own a fac­tory that would see us de­vel­op­ing into a bet­ter coun­try eco­nom­i­cally and be self-re­liant”, and only failed to hon­our the P and T deal be­cause of the man­age­ment’s hard­line stance.

Mean­while, speak­ing on be­half of the work­ers, Mr Bahlakoana Le­bakae of the United Tex­tile em­ploy­ees, said gov­ern­ment had failed to grab an op­por­tu­nity to own a firm “for the ben­e­fit of us all.”

“Coun­tries like China are where they are to­day eco­nom­i­cally, be­cause their gov­ern­ments have in­vested in tex­tile firms. Why can’t our lead­ers do the same?”

“This agree­ment is very clear that the gov­ern­ment un­der­took to pro­vide an­nual sub­si­dies to cover the com­pany’s op­er­a­tional costs. How­ever, since the deal was sealed way back in 2012, gov­ern­ment has not put any­thing into the com­pany.”

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