The Dawn Of Life In Broken Hill (Kabwe)

The Dawn Of Life In Broken Hill (Kabwe).

Kabwe WITHOUT a stable job, life had been a daily struggle for John Sakala ( not real name) of Kabwe.

The 46- year- old father of six depended on odd jobs to escape the economic and social hardships he was experiencing.

Even with the jobs he was doing, Mr Sakala did not earn enough money to pay rentals, feed his children and send them to school.

That is why when word went round that the government was re- opening the Zambia China Mulungushi Textiles Joint Venture ( ZCMT- JV) Limited, he quickly applied for employment.

He is now one of the 300 people who were employed before August 1 this year when President Lungu officially re- opened ZCMT- JV. “ For me, I am happy that this company has been re- opened because I now have a job,” Mr Sakala says.

The re- opening of ZCMT- VJ in which the Industrial Development Corporation ( IDC) has assumed full responsibility for financing and operations, is a fulfilment of the promise late President Michael Sata made before 2011 when he was leader of then opposition Patriotic Front ( PF).

In an effort to revive operations of the firm, on July 30, 2014, the shareholders of ZCMT- JV signed a 12- year lease agreement with Mohammed Enterprises Tanzania Limited ( MeTL) Group.

MeTL Group was to operate in Zambia under a subsidiary Mulungushi Textiles Limited and the agreement involved the leasing of the factory and the building at plot 2419 and 2420 in Kabwe.

There was also a provision of an option to review the agreement for a further 18 years at a fixed lease fee of K220,000 per month for the first three years, but payable 12 months in advance.

MeTL Group projected to inject an initial US$ 10 million into reviving the textile firm and operations were expected to start within three months from July 30, 2014.

ZCMT- JV shareholders issued a default notice to MeTL Group when it was not paying lease fees, but the company took the matter to the Lusaka High Court.

The court ruled in favour of ZCMT- JV shareholders and by March this year, the agreement was terminated.

When ZCMT- JV ceased operations on June 30, 2007, over 1,000 workers lost their jobs, casting a dark shadow on many families, leaving cotton farmers without market and further deepening Kabwe’s economic anguish.

“ Life has been a challenge having children to care of, paying housing rentals and just to survive,” Mr Sakala says.

For him and other employees, revamping operations of ZCMT- JV, one of the symbols of the Zambia- China cordial relations other than the Tanzania- Zambia Railway Authority, is a blessing because many people now have jobs.

“ People here ( ZCMT- JV) are happy, we suffered a lot because we did not have jobs but we are working now,” Mr Sakala says.

While some sections of society are sceptical about the re- opening of ZCMT- JV, President Lungu has assured that the revival of the jointly owned company is a reality.

“ Working with the IDC and identifying partners, the company will mobilise and invest an initial US$ 15 million in cutting edge textile technology and rehabilitation of the plant as well as establish a cotton outgrower scheme of at least 10,000 small scale farmers in Kabwe, Kapiri Mposhi, Chibombo, Chisamba and Ngabwe districts,” President Lungu said.

ZCMT- JV’s new line of business will include fibre production, spinning yarn, knitting and weaving fabric, dyeing, printing and fabric finishing as well as clothing manufacturing.

The textile company will also be involved in oil extraction, production of cotton seed cake, soap and candles.

Mr Lungu urged employees of ZCMT- JV to work extra hard so that the company can operate at its full potential to operate as a viable and profitable organisation.

IDC chief executive officer Andrew Chipwende underscored the need to transform ZCMT- JV into a leading textile and garment business venture which will also support cotton outgrower schemes.

“ IDC has commissioned a full technical review of the plant by an international reputable technology and industrial giant with a view to fully modernise the plant for sustainable operations,” Mr Chipwende explained.

He said the re- opening of ZCMT- JV is a step in the right direction in rebuilding Zambia’s manufacturing industry.

Undercapitalisation, high cost of production, obsolete machinery, erratic supply of raw materials, stiff competition with imported textile products from Asia and the failure by clients to liquidate their debts, were cited as the main factors which crippled ZCMTJV, which was established as Mulungushi Textiles of Zambia ( MTZ) in 1983.

MTZ, the Zambian government wholly- owned company, however, started experiencing operational challenges in 1996, the development which led to suspension of the factory’s operations.

Luckily, the Chinese government through Qingdao Textiles Holding Group Co. Limited came on board and injected US$ 24 million in the firm.

Thus ZCMT- JV was born with the coming on board of Qingdao Textiles Holding Group Co. Limited which holds 66 percent shares while Zambia, through the Ministry Defence, has 34 percent shares in the factory.

The line of business was production of chitenge fabric, drills, poplins and loom state, among others.

At its peak, ZCMT- JV was able to add value to its raw materials to produce chitenge African wear, cargo pants, shirts and shorts which were sold locally and on foreign markets.

ZCMT- JV was also exporting raw cotton to China and its fabrics to some Common Market for Eastern and Southern Africa ( COMESA) and Southern African Development Community ( SADC) member states such as Botswana, Malawi, Mozambique, Tanzania and Zimbabwe.

As ZCMT- JV diversified, it established Mulungushi Textiles Development Company Limited, Mulungushi Cotton and Cooking Oil Company Limited, Mulungushi Garment, Flamingo Bedding Company Limited and International Trade Centre.

Retail outlets were also opened in Kabwe, Chipata, Lusaka, Solwezi and Kasama.

Dogged with operational challenges again, on January 1, 2007, management suspended production as a temporary measure to reposition the company until March 31, 2007.

But the company never resumed operations.

The Central Chamber of Commerce and Industry ( CCCI), which in the past years had been advocating the recapitalisation of ZCMT- JV and later on its reopening, is happy that the factory is back to life.

“ This is something the people of Kabwe have been crying for and we commend the government for deciding to open Mulungushi Textiles. Jobs will be created and there will be other spill- over effects,” CCCI president Sydney Tembo says.

Mr Tembo has urged shareholders of ZCMT- JV and IDC to ensure a competent management is in charge of the company for it to be viable.

As for Boyd Phiri who lives about 45 metres from the ZCMT- JV complex, he wants the company to create jobs

and compete favourably on the market.

Now that some machines are rolling and clanking, Mr Phiri is hoping to see a self- sustaining ZCMT- JV. “ We want to see more people getting employed because we have so many young people who do not have jobs,” Mr Phiri says.

ZCMT- JV FACT FILE June 23, 1976 – Zambia and China sign a bilateral agreement to construct Mulungushi Textiles.

January 14, 1979- Zambia’s Prime Minister Daniel Lisulo and China’s Vice Premier Li Xiannia lay the foundation stone for construction of Mulungushi Textiles ( Z) Limited August 23, 1983- Chinese Counsellor and Minister of Foreign Economic Relations and Trade Chen Muhua hands over Mulungushi Textiles ( Z) Limited to President Kenneth Kaunda.

1996 – Mulungushi Textiles ( Z) Limited suspends operations because of undercapitalisation.

May 6, 1997- Premier of State Council of the Peoples Republic of China Li Peng and Zambia’s Vice President Godfrey Miyanda mark the start of ZCMT- JV Limited.

January1, 2007 – ZCMT management announces temporal suspension of production.

June 30, 2007 – ZCMT closes.

July 30, 2014 – ZCMT- JV board signs a 12- year lease agreement with MeTL Group December 11, 2014 – ZCMT- JV board officially hands over the company’s assets in Kabwe to MeTL Group.

March 2, 2016 – ZCMT board terminates the lease agreement.

August 1, 2016- President Edgar Lungu re- opens ZCMTJV.

 

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