Da Gama Textiles is to spearhead a more than R200-million investment and empowerment project to develop the cotton industry in the Eastern Cape, the leading South African textile group said on Sunday.
Da Gama joint managing directors Mike Donegan and Bob Funnell said the project would entail investing R100-million to establish new cotton farmers, set up a cotton gin and fund an export drive to the United States.
”The remainder of the investment comprises Da Gama’s own R123-million programme aimed at increasing production capacity to cope with the additional export volumes,” they said.
Last week Funnell announced that the textile giant has recently spent R75-million to buy a ring-spinning plant from Germany and Switzerland for its East London operation.
Da Gama is a division of KAP Textile Holdings SA Limited, a subsidiary of the multi-national group KAP Beteiligungs AG, a listed German textile group chaired by entrepreneur Claas Daun. It has subsidiaries throughout Europe and North America and is the market leader in South Africa where the group employs 17 000 people.
”This empowerment project is huge and unique to the industry. Once cotton starts being grown, it will ultimately provide employment for up to 6 000 subsistence farmers in the region,” said Donegan.
He added that the project was likely to succeed in reviving the local cotton growing industry.
”Firstly because it has the support of Cotton SA and Nacpo (National Cotton Producers’ Organisation), who would train and mentor the new farmers and secondly, because Da Gama had guaranteed that it would buy all cotton produced at a rate linked to the international cotton price.
”Basically, we are empowering farmers with a crop sold before a seed has even been placed in the ground.”
Donegan said the installation of a cotton gin close to Da Gama was integral to the success of the project. The gin, which would be partly owned by the farmers themselves as well as Da Gama, was likely to be up and running by the end of 2004 to process the first crop.
He said the project was expected to reach full production by 2005.
The Cradock, Somerset East, Tyefu, Engcobo/Cala, Butterworth and Umtata areas have been identified as potential cotton growing areas where trial planting will begin during the coming season, under the guidance of the provincial department of agriculture.
Da Gama’s annual off take of raw cotton averages 36 000 bales annually, out of a national industry average of 400 000 bales. However, South African cotton farmers produced just 80 000 bales of cotton this year, making the country a net importer. – Sapa