Marvo struggles to woo partners for revival
ONE of the country’s former leading stationery manufacturing giants, Marvo Stationery Manufacturers, is struggling to lure investors to inject capital into its business to revive its operations.
The Bulawayo company was placed under judicial management in September 2014 as it struggled to settle a debt of about $2,5 million accrued after failing to pay its creditors and a huge wage bill backlog.
Company judicial manager Mr Crispen Mwete of C Mwete and Company said the company has been scouting for financiers to partner the stationery manufacturer to resume operations since it closed shop over three years ago to no avail.
“We are looking for an investor or financier but not someone who intends to come up with a loan facility. We are in pursuit of someone who is interested in coming in on a more of a permanent basis with terms and conditions agreeable to the two parties including coming up with a shareholding structure with the existing directors. The major problem is raising finance for working capital in judicially managed companies,” said Mr Mwete.
In 2014, a South African firm showed interest to invest in the company but the deal fell through before anything concrete could be reached and again two years ago another transaction with one of the biggest stationery retail outlets, Lexus Stationery of Botswana failed to take off.
The Botswana firm had already secured a credit facility for the purchase of 90 tonnes of newsprint and 30 tonnes of bond paper and hard paper covers at a cost of $132 000 with the company further pledging to inject an additional $18 000 as working capital to resume operations.
Mr Mwete said the company needed working capital of $200 000 to revive its operations and expressed optimism that it could maintain itself as a going concern.
“When I was appointed (judicial manager), the company had actually stopped operations but I saw potential in it. Books for schools will always be wanted in the next 20 to 30 years until some new technology comes because children will always use them. Currently we are looking at a situation where Marvo will probably sell books at 20 cents while others will sell at 50 cents, so the market is there. We went out to look for orders and we did get orders within a week of about 280 000 but we could not supply because we didn’t have raw materials. We did that because a potential investor had promised to bring us raw materials,” he said.
The company used to manufacture exercise books, hard cover books, executive pads, lever arch files, pen carbon books and envelopes. Marvo Stationery Manufacturers was established in 1966 and at its peak it used to employ more than 500 workers.
“We didn’t dismiss anyone but what I did is that I put people on unpaid leave anticipating that once we start operations we will call them back. Marvo currently has about 200 employees but once we are in production they can get to 600,” said Mr Mwete.