Beleaguered clothing manufacturer Rex Trueform said on Tuesday that a black economic empowerment (BEE) consortium has expressed a willingness to offer attractive terms to lease its Salt River factory, which faces closure.
The company announced in March that production volumes at the Salt River factory had been severely compromised by the strong rand, which had mitigated against obtaining exports at viable prices; a surge in imported garments from countries with low cost inputs; and a shift in consumer preferences.
As a result, the Salt River factory was no longer viable and could not be allowed to be a financial drain on the other group operations.
On Tuesday, the company said that since March it has been involved in extensive consultations with the South African Clothing and Textile Workers’ Union, other employee representatives and a task team representing the Western Cape government regarding the proposed retrenchments at the Salt River tailoring facility.
Negotiations have also taken place with a BEE consortium, and the directors have indicated their willingness to offer attractive terms for the lease of the Salt River buildings and equipment for continued operations, it stated.
“Discussions continue in this regard,” the company added.
The remaining operations in the company — the Queenspark retail chain and the Atlantis factory — are both viable and profitable.
The company also has a strong balance sheet and cash reserves are currently above the levels reflected in the June 2004 and December 2004 balance sheets, it said.
“A further announcement will be published once the impact and the outcome of the aforementioned negotiations and discussions is known,” it added. — I-Net Bridge