Government intervention revives Glodina

One of South Africa’s largest towel manufacturing companies, Glodina, has resumed operations in Hammarsdale on the outer west of Durban, thanks to government intervention.

KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs, Sihle Zikalala and Industrial Development Corporation (IDC) CEO Geoffrey Qhena officially opened the plant on Tuesday, following its closure due to financial cash flow challenges.

Speaking at the opening ceremony, Zikalala said the KwaZulu-Natal government intervened to avoid the devastating effects of the closure of Glodina on the economy of the region.

“We had extensive engagements with the management and shareholders of Glodina to understand the nature of the challenge, and working together, we devised mitigation strategies,” Zikalala said.

As part of the intervention, Zikalala said a multi-stakeholder task team comprising the Department of Economic Development, Tourism and Environmental Affairs, Trade and Investment KwaZulu-Natal, IDC, and the South African Clothing and Textile Workers Union was established.

The department played a key role in linking potential investors with Development Finance Institutions such as IDC and KZN Growth Fund, Zikalala added.

“We are very humbled by the swiftness with which the Minister of Economic Development, Ebrahim Patel, and the IDC have handled the matter. This is, indeed, how the developmental state should respond to the pressing economic needs of the communities on whose behalf it exists.”

R150m approved

After the completion of a due diligence process, the IDC approved a funding package of R150 million for an IDC-owned entity to acquire the assets from the previous owner, a move that resulted in the factory resuming its operations.

Zikalala also commended the former shareholders of Glodina, KAP Industrial Holdings for selling company at a price that would allow the purchasing company to reasonably operate in a manner that will save jobs and remain competitive in the industry.

More than 211 jobs retained

“The new entity had committed itself to the retention of more than 211 jobs of the 500 jobs lost when the company closed down. We have no doubt that the number of jobs will increase exponentially as the company gradually regains its previous customers,” the MEC said.

Gugu Mlotshwa, one of the employees who have been retained, was full of praise for the government.

“What government has done is highly commendable. When the company closed down, we never thought it would be saved. We really want to thank our government for what they have done. We would like to see the company grow so that it can accommodate all employees who lost their jobs,” an elated Mlotshwa said.

 

 

Source: South African Government News Agency

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