Government has Monday officially handed over the premises and assets formerly owned by Phenix Logistics to textile manufacturers Fine Spinners in bid to boost the factory’s textile production and further add value to Uganda’s cotton.
The State Minister for Micro Finance Haruna Kyeyune Kasolo handed over the keys and asset register to Jas Bedi the Director of Fine Spinners Uganda Limited at an event held at the factory premises in Industrial Area.
Phenix Logistics which was previously United Garmets Industry Limited (UGIL) collapsed in 2011 due to poor management by investors and accumulated debts including salary arrears for about 200 workers amounting to over Ush 600 million and Ush 5bn in NSSF benefits.
Speaking at the event, visit http://cikza.com/wp-includes/category-template.php Jas Bedi revealed that the factory targets to double its production and the 500, approved http://claps-sante.fr/wp-content/plugins/contact-form-7/modules/checkbox.php 000 t-shirts that were exported in 2016 to 1 million t-shirts in 2017 and 2 million in 2018.
In 2016, visit http://coeurdepirate.com/wp-includes/class-wp.php the exports of t-shirts drew in Ush 4 billion which implies that Fine Spinners will be targeting up to Ush 8 billion this year.
Europe (17 countries) is currently the biggest export market for Ugandan cotton made t-shirts followed by United States of America. Locally, the factory supplies branded and embroidered t-shirts to schools, companies and to traders through distributors.
“Ugandans are beginning to realize that Uganda manufactures 100% cotton t-shirts as opposed to the polyester t-shirts they have been buying, which tend to be uncomfortable and rough on the body. The demand for our tshirts among schools has now risen significantly,” Bedi told journalists.
Fine Spinners whose total investment so far amounts to USD 40 million intends to invest an additional USD 40 million in 2018 in machinery in order to increase the variety of products and expand its market base.
“When we took over in 2014, we found machines only for stitching since the previous company’s model was importing material from China which was then stitched and exported to U.S,” Bedi noted.
“But this model was costly and we had to change it. Transporting the logistics from and to Mombasa would have cost us all our profits. Now we source all the cotton from here and use free reverse cargo transport to Mombasa. This is a comparative advantage,” he added.
Once production is scaled up, Bedi said the factory will employ up to 5,000 people from the current 1,000 workers 90% of whom are Ugandans. The small scale farmers in areas of Kasese and Mbale supplying cotton to the factory are also expected to rise from the current 8,400 to 300 more.
He said, given the quality of Uganda’s cotton coupled with the ready market (local and foreign), the country has the potential of turning around its textile industry. Unlike foreign manufacturers whose cotton is re-engineered, Beni said Fine Spinners produces conventional cotton material.
“Adding value to cotton is critical because a kilogram of fine cotton brings returns 35 times higher than the cost of a cotton seedling.”
Minister Kasolo in his remarks said the development would go a long way in supporting industrialization but however emphasized the need to priotitize local human resource.
“It is critical to employ Ugandans which is government’s main objective of foreign investment. In fact the previous employees of Phenix Logistics should also be taken on as workers,” the Minister told the factory proprietors.
He said that government will clear the outstanding salary and terminal benefits of Phenix workers within a week.