The Sunday News
Business Editor
ARCHER Clothing in Bulawayo has been forced to terminate contracts of its 284 employees after demand for its products plunged as the country and the world at large battles the effects of the coronavirus (Covid-19).
The first group of the affected employees were shown the exit soon after the lockdown started on 30 March and the last group left the company a week ago. Paramount Garments managing director Mr Jeremy Youmans told Sunday News Business that the lockdown led to an immediate fall to 25 percent of required garments.
“Unfortunately, we have been forced to downsize due to lack of demand. We have reduced our complement of employees at Archer by a total of 284 people, the last of who left on 5 June. The main reason is the reduced demand caused by the measures out around the world to deal with Covid-19. The lockdown led down to an immediate fall in required garments to 25 percent of what we are normally receiving, from both the local and international market,” he said.
Archer Clothing is owned by Paramount Garments and has remained one of the biggest employers in Bulawayo despite continued de-industrialisation the second capital has faced. Mr Youmans said the company has remained with 684 workers adding, “We hope that no further downsizing will be necessary.”
He said management would continue to work to obtain work to keep it afloat although it was clear that the full effects to the world economy have not yet been felt and could last for a considerable time. Mr Youmans said apart from the Covid-19 effects, the company was reeling from reduced competitiveness caused by the increasing cost of production.
“The loss of 20 percent of forex receipts to the RBZ (Reserve Bank of Zimbabwe), and the lack of access to forex on the inter-bank market have made it, in some cases, impossible to continue gaining and supplying export orders.”
The company, added Mr Youmans, switched to production of Personal Protective Equipment (PPEs) to cover for the loss of production when the country entered into the lockdown but production has also been halted after demand of the materials went down.
“These goods are no longer being ordered in any great quantities and we are left with plenty in stock,” he said.
The company is now focusing on the new markets and working on new products to remain relevant in the continuously evolving market.
“We are restructuring the sales department to drive into new markets and looking at new products we can develop from the raw materials we have in stock. It is our intention to arrest the decline at its current point but the ability to continue exporting is at risk from the lack of competitiveness, and this could lead to further significant job losses,” said Mr Youmans.
He added that the pandemic has been highly disruptive but his company intends to come out stronger.
“We intend to come out of it a stronger and better company but this will be highly improbable if simple support measures, like the access to forex, are not improved. The rest of the world will get back on its feet in due time and demand will recover back to previous levels, albeit with a different mix of markets and products. But every country is also trying to work out how to get its own economy going again.”
In 2015, when the company was snapped by Paramount Garments it provided a glimmer of hope for Bulawayo, at one time employing more than 500 workers at one go as it ramped up production. It had targeted to train and employ between 40-50 new workers every month as part of an ambitious project that was meant to significantly provide a source of livelihood to hundreds of people in Bulawayo and beyond.
Mr Youmans who is also the Clothing Manufacturers Association chairman said the clothing industry sector in Zimbabwe has responded to the pandemic “as best it can with many companies contributing to the supply of PPE.”
He said: “However, with so little raw materials available locally, the starvation of forex to the industry and disruption to global supply chains to import raw materials, many companies are struggling.”
He said the industry needed a boost from the Central Bank by being allocated foreign currency through the inter-bank and support through a local procurement strategy that also tightens control of imported goods, and the duties they pay.
While the whole world is affected by the effects of Covid-19, Mr Youmans said the country has an opportunity to turn the prevailing situation into an advantage.
“The current challenges are unprecedented and severe. However, the whole world is affected, so, if we can further develop, and implement, focused strategies on economic growth, and do them better than our competitors, we can turn the current situation into an opportunity. But we need to be collective, courageous in our decision making, and committed to the outcome,” he said.
A number of companies have also reported subdued production due to the effects of Covid-19. Some have responded by cutting down on staff and salaries while anticipating business would peak as countries start crawling out of the effects of the global pandemic.
