TRALAC - Trade Law Centre

Tanzania: Textile factory shuts as orders decline

Tuesday, 08 July 2008

Source: The Citizen (Dar es Salaam)

One of the two textile mills belonging to a leading industrial firm in Arusha, Sunflag Ltd, has been closed down for good, The Citizen has established.

The factory premises at the Unga Limited industrial area in Arusha has been rented out, with some buildings already converted into storage warehouses.

Founded in Kenya in 1930s, Sunflag started operations in Tanzania in 1970 at Unga Limited on the southern fringes of Arusha.

Production of textiles has now shifted to another factory operated by the firm which was opened a few years ago at Njiro south east of the municipality.

Officials of the mill interviewed said the factory has been closed down because of the slow down in business and declining prospects for its products in export markets.

Until its closure at the end of last year, the factory had about 2,000 employees who were promised to be relocated to another plant at Njiro.

However, most of them later opted to quit the company following a tug-of-war with their employer who declined to meet their payment demands, including the minimum wage for private firms set by the government.

Declining export orders were, however, the major factor which had led to the closure of the factory and shifting of production activities to the new mill, the firm's officials interviewed said.

For instance, garment orders expected from South Africa last month could not be met, according to reliable sources. The last consignments were exported there last year and no new orders have been made.

Prospects of exports of fabrics abroad have also faded in recent years despite Sunflag being one of the few textile makers that has been benefitting from the United States' African Growth and Opportunity Act (AGOA).

Sunflag general manager Ajay Shah said the firm had planned to employ at least 1,000 workers due to anticipated exports under AGOA.

However, the dismantling of the Multi-Fibre Agreement's world quota regime for textile and apparel trade in January 2005 reversed some of the gains made in the African textile industry due to increased competition from China and other countries outside Africa.

He could not give figures of the firm's new production unit at Njiro nor the number of people employed there.

Different types of garments, bed covers and sheets, khangas, suiting material, curtains and bednets are made at the new mill in Njiro.

The closure of Sunflag's oldest mill, which at time was one of the biggest industrial employers in Arusha, means its textile rival, A to Z is now the leading fabric manufacture in Arusha.

Like Sunflag, A to Z also has an old factory in Unga Limited industrial area.

But recently it officially opened its multi-million dollar wing at Kisongo in Arusha which manufactures treated bednets, among other fabrics.

A to Z new textile mill, which was visited by US President George W. Bush during his state visit to Tanzania last February, is a joint venture with Japan's chemical giant Sumitomo.

It was earmarked to make bednets treated with chemicals in a bid to fight malaria in Africa.

Bednets manufactured there are exported to various sub-Saharan African countries where malaria is the leading killer disease.

Last January police in Arusha were forced to use tear gas and batons to disperse workers of Sunflag textile firm who were demanding better pay.

The anti-riot Field Force Unit were called in to remove the workers who had staged a sit-in at the gates of the plant at Unga Limited on the outskirts of the municipality.

Accounts from the area then said the workers were demanding to be paid Sh.150,000 minimum wage announced by the government late last year.

When president Jakaya Kikwete visited the plant early last year, he was told Sunflag was exporting 75 per cent of its fabrics.

Another textile factory in Arusha, Kiltex was closed in October last year. Its owners claimed they they were awaiting new machinery from abroad.

However, the laid off workers said, the factory management did not want to pay the new minimum wage. Many of them are yet to be paid their terminal benefits.One of the two textile mills belonging to a leading industrial firm in Arusha, Sunflag Ltd, has been closed down for good, The Citizen has established.

The factory premises at the Unga Limited industrial area in Arusha has been rented out, with some buildings already converted into storage warehouses.

Founded in Kenya in 1930s, Sunflag started operations in Tanzania in 1970 at Unga Limited on the southern fringes of Arusha.

Production of textiles has now shifted to another factory operated by the firm which was opened a few years ago at Njiro south east of the municipality.

Officials of the mill interviewed said the factory has been closed down because of the slow down in business and declining prospects for its products in export markets.

Until its closure at the end of last year, the factory had about 2,000 employees who were promised to be relocated to another plant at Njiro.

However, most of them later opted to quit the company following a tug-of-war with their employer who declined to meet their payment demands, including the minimum wage for private firms set by the government.

Declining export orders were, however, the major factor which had led to the closure of the factory and shifting of production activities to the new mill, the firm's officials interviewed said.

For instance, garment orders expected from South Africa last month could not be met, according to reliable sources. The last consignments were exported there last year and no new orders have been made.

Prospects of exports of fabrics abroad have also faded in recent years despite Sunflag being one of the few textile makers that has been benefitting from the United States' African Growth and Opportunity Act (AGOA).

Sunflag general manager Ajay Shah said the firm had planned to employ at least 1,000 workers due to anticipated exports under AGOA.

However, the dismantling of the Multi-Fibre Agreement's world quota regime for textile and apparel trade in January 2005 reversed some of the gains made in the African textile industry due to increased competition from China and other countries outside Africa.

He could not give figures of the firm's new production unit at Njiro nor the number of people employed there.

Different types of garments, bed covers and sheets, khangas, suiting material, curtains and bednets are made at the new mill in Njiro.

The closure of Sunflag's oldest mill, which at time was one of the biggest industrial employers in Arusha, means its textile rival, A to Z is now the leading fabric manufacture in Arusha.

Like Sunflag, A to Z also has an old factory in Unga Limited industrial area.

But recently it officially opened its multi-million dollar wing at Kisongo in Arusha which manufactures treated bednets, among other fabrics.

A to Z new textile mill, which was visited by US President George W. Bush during his state visit to Tanzania last February, is a joint venture with Japan's chemical giant Sumitomo.

It was earmarked to make bednets treated with chemicals in a bid to fight malaria in Africa.

Bednets manufactured there are exported to various sub-Saharan African countries where malaria is the leading killer disease.

Last January police in Arusha were forced to use tear gas and batons to disperse workers of Sunflag textile firm who were demanding better pay.

The anti-riot Field Force Unit were called in to remove the workers who had staged a sit-in at the gates of the plant at Unga Limited on the outskirts of the municipality.

Accounts from the area then said the workers were demanding to be paid Sh.150,000 minimum wage announced by the government late last year.

When president Jakaya Kikwete visited the plant early last year, he was told Sunflag was exporting 75 per cent of its fabrics.

Another textile factory in Arusha, Kiltex was closed in October last year. Its owners claimed they they were awaiting new machinery from abroad.

However, the laid off workers said, the factory management did not want to pay the new minimum wage. Many of them are yet to be paid their terminal benefits.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Tanzania’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.