Nortex invests P3m to boost capacity
Chakalisa Dube | Friday July 17, 2015 12:50
This was said by the managing director, Mukesh Josh in an interview this week.
“We currently produce six tonnes of towels a day and our plan is to increase production to 6.5 tonnes in the current financial year, which began this month. We will not necessarily be growing the company, but we are maintaining growth,” said Josh, adding that the P3 million will be from the company.
He indicated that the machinery would be in the dyeing house and make-up department.
He further noted that as part of sustaining growth, the company employed 70 workers in the middle of last year bringing the total workforce to 480. The 70 workers are mostly machine operators.
In addition, Josh told BusinessWeek that the company has been doing well after experiencing a slump due to unfavourable economic conditions experienced between 2010 and 2012.
The company in 2012 shelved its expansion plans, which were anticipated to cost P30 million.
Josh insisted the company still does not have plans to expand extensively, but favours sustaining its current size and business model.
“Extensive growth is not viable at the moment,” he said.
Although he was reluctant to disclose figures, he said the business performed very well in the financial year that ended in June.
“Profit margins grew by five percent in the just-ended financial year as compared to the previous year (which ended on June 30, 2013),” he explained.
He attributed the profit to improved business fortunes of the clothing retail stores in South Africa that buy 90 percent of the company products. Ten percent of the company sales go to Zimbabwe and Nambia chain stores. However, Josh noted that the Zimbabwean market is not reliable.
“Sometimes our customers in Zimbabwe do not pay us on time. We sometimes stop supplying them and resume once they have settled their debts,” he explained.
Josh singled out the new government regulations aimed at protecting the environment as one major challenge the company currently faces; and that the regulations are impacting negatively on the company’s operations.
“The regulations strictly do not allow discharge of polluted water into the environment. We however, do not have adequately skilled people to operate the waste-water treatment plant in order to comply with the regulations and as such it affects our operations more often.
“We do bring in experts to train our people to operate the plant, but they are struggling to catch up,” he said.