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Archer Clothing in Bulawayo

BULAWAYO clothing firm, Archer Clothing, is debunking the myth that the challenging economic environment in Zimbabwe is an impediment to successfully turning around the fortunes of a company. Its remarkable change in fortunes in a short space of time is ample testimony that with the right fundamentals in place, an astute management team and dedicated workforce, any Zimbabwean company can thrive. It is unbelievable that in 2016, Archer was forced to retrench about 400 workers and reduce its working days from five to four a week as its business fortunes continued to slide due to a drop in local orders and export competitiveness.

When it was acquired by Harare-based Paramount Garments in 2015, the Bulawayo firm owed creditors about $14 million. The takeover saved it from liquidation. Today, the company has increased its workforce by 66,6 percent to 1 000 permanent employees from 600 last year on the back of improved production. Archer Managing Director Mr Jeremony Youmans told Business Chronicle on Monday that they were targeting to further increase their workforce by an additional 600 workers this year. “Currently, we are sitting at 1 000 workers and we are now targeting an additional 600 workers once we secure new machinery as we expand our operations and set up a training school at Archer,” he said.

“But the major constraint we are facing at the moment is foreign currency shortages to import new machinery.” The company requires at least $5 million working capital including $1 million for the acquisition of new machinery in the long term. It has also managed to reduce its debt to creditors by half. “We have paid the secured creditors half of the amount Archer owed before we took over. And we are now working on setting up a training school at Archer so that we train and employ more skilled people,” said Mr Youmans.

The firm also hopes that the designation of Bulawayo as a Special Economic Zone will go a long way towards improving the competitiveness of its products on the export markets as well as attracting Foreign Direct Investment into the country. Archer does exports into the Sadc region, Sudan, Kenya as well as Germany. It also plans to explore other markets across the world. The company is also among the local exporters enjoying the export incentive scheme introduced by the Reserve Bank of Zimbabwe.

The export incentive scheme started at five percent rate but has since been raised to 12 percent for top exporters premised on encouraging Zimbabwe companies to increase exports and generate the much-needed foreign currency. We applaud Archer Clothing for showing the way and giving hope to Zimbabwean companies currently operating under difficult conditions. Their success story is not only remarkable but shows what can be achieved through a combination of sound business management principles, hard work and determination.

Archer is likely to continue ramping up production premised on the favourable investment conditions ushered in by the new dispensation. Its advantage is that it already has a firm foothold on the export market which the Government is encouraging firms to tap into. We hope companies such as Archer and others showing signs of recovery will be considered for financing under the $100 million package recently extended to Zimbabwe by the United Kingdom through the CDC (UK’s development finance institution) and Standard Chartered Bank.

These companies have demonstrated their ability to thrive in a tough economic environment and deserve cheap loans to retool and improve their productive capacities. Most companies in Bulawayo are operating on shoe string budgets and their biggest headache is access to foreign currency to procure raw materials and machinery.

Those in the textile sector such as Archer and Merlin are competing against cheap imports particularly from China. If given adequate foreign currency, they will be able to retool and reduce their production costs with a resultant competitive pricing of their products. We are aware that Government has been working with the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce and other industry bodies to find ways of assisting companies to stay afloat.

We feel the entire production process should be interrogated with a view to assessing all the costs that go into production. That way Government can remove some of the unnecessary impediments that contribute to the current high cost of production. As Zimbabwe opens up to the world, huge conglomerates will come in and shake the market. With their massive operations and economies of scale, they are likely to blow small operators out of the water.

It is time local companies realise that time is not on their side. They need to up their game by taking advantage of Government’s commitment to getting Zimbabwe working again. Archer Clothing and other firms that are doing well are leading the way. It’s time others emulated their sterling work.