Dumisani Nsingo, Senior Business Reporter
ONE of the country’s leading textile companies, Paramount Garments (Pvt) Ltd has set sights at exploring the American market as part of improving on its exports.
Paramount Garments managing director Mr Jeremy Youmans said last month and early this month potential clients from Canada and the European Union (EU) visited the company’s factories in Harare and Bulawayo on a feasibility study mission with the aim of facilitating trade agreements with the firm.
“We have had factory visits from potential customers in Canada and the EU last month and this month respectively,” said Mr Youmans.
He said the company was already working at improving its social responsibility policy in line with the expectations of these two markets.
“We are developing ways to better market the social responsibility programmes we have as we outperform many other countries on this basis and would like to change misconceptions about Zimbabwe in the international world.
“Purchasing decisions can influence social development where it values social responsibility or restrict it when it ignores it.
The US and EU are target markets to leverage the relatively high level of social responsibility we have within our factories,” said Mr Youmans.
He said there was a need for the United States of America to review its African Growth and Opportunity Act (AGOA) so as to open up markets for Zimbabwean companies in that country. Currently Paramount Garments is restricted to supply the US market due to lack of access to duty free quota free supply since Zimbabwe is not a member of the AGOA.
“There are improvements still to be made (with regards to social responsibility) but we believe we may be able to make this a competitive advantage to counteract other real disadvantages such as distribution from a landlocked country and perceived ones such as Zimbabwe is “off limits” due to the US sanctions. Access to the US market is further hampered by the lack of access to AGOA, which we believe needs to be reviewed in our favour,” said Mr Youmans.
AGOA is a United States Trade Act, enacted on 18 May 2000 as Public Law 106 of the 200th Congress. AGOA has since been renewed to 2025. The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. Qualification for AGOA preferences is based on a set of conditions contained in the AGOA legislation.
Paramount Garments exports its textile products in the region, Sudan, Kenya and Germany. The company operates 41 production lines in Harare and Bulawayo and intends to have an additional 10 at Archer Clothing Manufacturers employing about 400 people in the process.
“We were to commission 10 more lines employing around 400 people but can’t do this without machinery and raw materials to be made into garments. We don’t have the machinery and raw materials as we can’t access more foreign currency from our banks. We have nearly finished the fabrication of the lines and we have managed to pay for some of the machinery to be imported and which is about to arrive,” said Mr Youmans.
He said its failure to expedite its recapitalisation programme at Archer Clothing Manufacturers and importing strategic raw material due to foreign currency shortages was frustrating its skills development programme.
Early this year the company set up training schools in Harare and Bulawayo as part of its efforts to feed qualified personnel into its operations.
“We are training people in our training school each month but on a small scale as there is no point in training more people when we won’t have machinery and raw materials for them to work on. We are buying everything we can locally but this is proving to be more and more difficult. It is a shame, as we have to let opportunities go that may not arise again,” said Mr Youmans.
He said capacity utilisation at its Harare factory was 90 percent while its Bulawayo operations were at 100 percent production. Creditors of Archer Clothing Manufacturers approved its take-over Paramount Garments in 2015, saving it from liquidation.
Since its take-over, Archer Clothing has been one of the country’s most successful stories of a company that was forced to close shop due to the effects of hyper-inflation but has managed to come out of the woods to attain profitability in the shortest period of time.
Mr Youmans said the company was looking forward to expanding its leather operations in Bulawayo. The company ventured into leather production in November 2015 as part of a diversification strategy aimed at expanding its business.