- July 9, 2009
- Posted by: admin
- Category: Clothing and Textiles
THE FRAME Vertical Pipeline division is closing down and 1 400 jobs will be lost, despite efforts by the government to save the facility’s unique technology and jobs.
Stuart Queen, the chief executive of Seardel, said the company was issuing retrenchment notices to 1200 workers in four subdivisions in the Frame Vertical Pipeline facility in KwaZulu-Natal as part of a “staged termination” to begin next Friday. The affected departments are spinning, weaving, finishing and denim.
The decision to close the division followed the deadly silence of the Department of Trade and Industry (dti) and the Industrial Development Corporation’s (IDC) on the matter, just one week after they had supposedly “completed talks” about Frame’s future.
“We have had no word from (the dti) or the IDC about the matter since their talks in June,” Queen said.
The plan had always been to close the facility with the hope of reopening it following a proposed bailout package to be announced by the dti by June 30
“There has been no positive outcome to the deliberations,” Queen said.
“The reality is that these divisions were heavy loss makers for some time and any reopening plans just appear to be impractical,” he added.
Queen said a new entity that would house Frame’s assets would be created and the facility would continue to operate.
He said the 1 200 workers had already received notice that they would be retrenched, and the remaining 200 would be informed in due course.
The retrenchment process will be completed by the end of next month.
Two months ago, the IDC started talks with the Economic Development Ministry, the National Empowerment Fund, the dti, Seardel and clothing and the Southern African Clothing and Textile Workers Union (Sactwu) to save the firm from closure. Minister of Economic Development Ebrahim Patel is a former general secretary of Sactwu and his involvement in efforts to rescue the company were regarded with suspicion by rival firms.
Frame is a unit of Seardel, which is controlled by investment firm HCI, in which Sactwu holds 40 percent. Geoffrey Qhena, the IDC’s chief executive, said there were plans to reopen the company, but that he was not aware of Seardel’s plans to close the facility.
An insider said the group had passed notice to its workers as it was left with little choice.
Source: Business Report – Florence de Vries