Archer revival stokes hope Bulawayo manufacturing could be mended

Archer revival stokes hope Bulawayo manufacturing could be mended

BULAWAYO, August 19 (The Source) – The unlikely revival of Bulawayo-based garment maker Archer Clothing has raised hopes there could be life yet in the second capital’s rusty factories after years of seemingly inexorable deindustrialisation.

Archer Clothing, which was placed under judicial management in 2010, slipped out of the mire when the High court approved its purchase by Paramount Garments after a protracted standoff among creditors divided on its future direction.

The firm was just one of hundreds of troubled businesses, especially in the textile sector, to go under leaving Bulawayo, Zimbabwe’s industrial hub, with hordes of workers being jettisoned out of its once famed factories.

Lack of affordable capital to upgrade obsolete plant and machinery, investor flight due to President Robert Mugabe’s government’s policies deemed to be anti-investment, the influx of cheap imports as well as water and electricity shortages, have been cited as some of the reasons behind Zimbabwe’s industrial malaise.

However, amid Bulawayo’s industrial woes, promising signs have started to emerge.

Some notable businesses in the city, such as National Blankets Limited and United Refineries, have started showing signs of recovery but it is the case of Archer Clothing, however, that has brought hope that the city’s textile industry — once the national hub and the driver of its development — could be revived against all odds.

Archer was placed under judicial management five years ago after failing to raise working capital and slipped into provisional liquidation in 2014, before Paramount rode to the rescue.

It did take a while to iron out the creases and stitch up the deal.

Negotiations between the two companies started in 2013 after they initially entered into a cut, make and trim deal which saw the Harare company supply clothing material and labour while Archer provided the working space.

Paramount director, Jeremy Youmans says the acquisition of Archer is strategic and key to the group’s export plans.

One of Zimbabwe’s leading textile firms, Paramount exports to Germany, the Southern African Development Community (SADC) region and Gabon in West Africa.

Most of the new production at Archer is for that export market, Youmans says.

“We intend to further develop these current markets and expand into more regional countries. West Africa also offers further opportunities,” he told Financial Mail.

By the time the takeover was concluded, Paramount had sunk $3 million into Archer in working capital, the purchase of buildings and assets, maintenance and refurbishment of the buildings and plant, new information technology systems and infrastructure as well as upgrading facilities to bring them up to acceptable international standards.

It also hired 500 workers, mostly former Archer employees.

“We intend to continue expanding capacity to about 850 employees. If we achieve this, the total investment required will climb to $5 million. The key to achieving this continued growth will be the ability to attract more orders, from both local and international markets,” Youmans says.

However, competent manpower is in short supply, with key skills lost during the company’s hiatus.

“We need more skilled workers at Archer and the same at Paramount actually. We have set up training schools in both companies but it is a slower process and there is a certain dropout rate,” he says.

To guarantee Archer’s survival, Youmans believes the government has to outlaw the sale of imported cheap used clothing now prevalent throughout the country.

“We do not prescribe to the idea of forcing procurement channels but as a country we need to adopt an attitude of trying to source our goods and services locally as much as possible. There are those who actively do not want to procure from local companies for various reasons, but none of them assist in the economic recovery of this country,” he said.

“We would like to see our financial institutions value our businesses based on their ability to create wealth rather than the value of their buildings. Many businesses have excess collateral locked up in their assets and are undervalued due to the surplus of property on the market, which often has nothing to do with the ability of the business to trade its goods and services,” he said.

The Paramount boss said they wanted to continue their growth to achieve maximum capacity in their factories in Harare and Bulawayo.

“This will enable us to maintain competitiveness, even based solely on price.     We are strengthening our core brands and developing new markets.       Once we achieve this we will be employing 3,000 people within the group and manufacturing nearly all of our product range here in Zimbabwe.    Assuming we continue to gain sufficient orders to do this, we should achieve it within the next 14-20 months.”

In addition, Youmans indicated they were expanding the product range to include a full range of personal protective equipment (PPE), so that they could be a “one stop shop” supplier to their customers.

He said sectors like mining required a large range of PPE and by offering the full range they could simplify their purchasing and make themselves more attractive as a supplier.

Youmans saw the development of expertise in the areas of PPE as a model of beneficiation as they were switchingimporting to manufacturing them locally.

“We have already begun planning another small factory producing PPE and apparel products which will also be in Bulawayo, in addition to the clothing that is made at Archer,” he said.

Youmans praised Archer’s strong reputation in casual and safari wear sectors, as well as formal shirts   sayingthey would be reintroducing the Archer and Salty brands to the regional markets later this year and intended to develop a strong base in these sectors.

“The quality of the garments has been there for some time, but we need to bring all areas of the business up to this standard so that our customers’ experience in dealing with us becomes a competitive advantage. So we are installing state of the art IT systems, have recently been certified for ISO 9001, and are in the process of gaining other quality and social responsibility certifications,” he said.

He, however, lamented that price competitiveness remained a crucial factor hindering their success. This, he attributed to the high cost of doing business in Zimbabwe which made it very difficult to take huge steps without causing significant increases in pricing.

“So we are focusing on empowering our own people as much as possible and developing them and their solutions, whilst staying abreast of international trends and practices.”

The revival of the company is welcome news for the textile industry, which at its peak, used to produce about 135 million garments annually, compared to the current 18,7 million garments. The industry employed 35 000 workers, compared to current levels of just under 7,000.

Archer was established in 1953 and before its collapse was among the largest garment manufacturers in the country.

It has been battling operational challenges that saw it being placed under judicial management in 2010 and provisional liquidation last year due to lack of working capital before scaling down operations, laying off 270 contract workers and 210 permanent employees.

Youmans however remains upbeat about the country’s potential.

“We need to create confidence amongst ourselves,” he said.

“We do not believe there is any golden savior riding over the horizon to save us. Most of the problems in Zimbabwe can be corrected, or at least reduced, by actions that are within our own control.

“If we do not have confidence in ourselves, and are not prepared to invest in our own businesses and markets, how can we expect others from outside the country to be prepared to do it?  If we sit still, we will die,” Youmans added.
Originally published in the Zimbabwe Financial Mail Magazine