Frame rescue ‘about safeguarding industry'

Government acted swiftly to facilitate negotiations to prevent the closure of the company — the biggest textile manufacturer in southern Africa employing about 1,400 workers — when owner Seardel announced in April that it planned to close down its spinning, weaving, finishing and denim divisions.

This was after the Industrial Development Corporation (IDC) refused a request for assistance on the ground that the business, which has been haemorrhaging cash to the tune of R30m a month, was unviable.

Wednesday's talks involved Davies, Economic Development Minister Ebrahim Patel, KwaZuluNatal MEC for economic development and tourism, Mike Mabuyakhulu, Seardel, the South African Clothing and Textile Workers' Union, the IDC, the National Empowerment Fund and trade and industry officials.

“We have reached an important level of understanding,” said Davies.

Davies said rescuing Frame was not about saving a particular firm from closure but maintaining SA's textile production capacity.

“We are trying to defend strategic industrial capacity and jobs and in such a way that we create the conditions to build on this and progressively shift the growth path to one which yields decent work and sustainable livelihoods,” he said.

“There are many factors in the external environment including illegal textile imports which have contributed to the demise of Frame rather than an inability to competitively produce textile products in SA.

“We will be doing a number of things to improve the business climate.” These measures included acting “ruthlessly” against illegal clothing and textile importers.

“If we find people engaged in this activity we will be applying the full force of the law and we are working energetically to devise new ways to catch people,” the minister said.

“We are also going to be taking steps to avoid the situation where people hide behind agents. We will be investigating ways to hold them responsible as well. We are not going to allow people to bypass the law on these matters.”

A lot of technical work on and engagement with other distressed sectors of the economy was under way, Davies said.

The department was also working on the details of how to extend the automotive development programme to buses, heavy and commercial vehicles and catalytic converters.

Source: Business Day

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