WATER, ELECTRICITY TARIFFS HIKE CITED AS ... BIG TEXTILE FIRM SHUTS DOWN, 342 LOSE JOBS

MATSAPHA - The hike in electricity and water tariffs in recent years has seen TQM Textiles Swaziland shutting down its operations and retrenching its 342 employees.

The tariffs increment is among other reasons, causing the manufacturing and processing company, which is regarded as the engine of the textile and apparel sector in the Kingdom of Eswatini, to shut down its operations. TQM Textiles Swaziland supplies the industry with the main raw material (fabric) and is one of the six sub-factories under Tex Ray Group Eswatini. According to a notice, which was issued by Tex Ray Group Eswatini Managing Director (MD) Mars Tseng to the 342 workers, they will all be retrenched on December 13, 2024.

Terminate

Through the notice, which is titled; Notice to terminate contract of employment on reasons of redundancies in terms of Section 40 of the Employment Act of 1980 as amended, the MD said the employees’ notice began on November 14, 2024, and shall lapse on December 13, 2024. However, when this publication enquired about what necessitated the closure of the company, TQM Textiles Swaziland Administrator Wanlong Chow said the situation in the textile and apparel sector in Eswatini is not looking good due to various factors; the continued hike of water and electricity tariffs and the South African Rebate Policy, which decreased orders from the neighbouring country. He said South Africa is the main market for the Eswatini textile and apparel industry, among others.

It is worth noting that in the next three years, water bills will increase by over 12 per cent. This comes at a time when the world economy, including that of Eswatini, is constrained. In 2021, the Eswatini Water Services Corporation (EWSC) was granted a 13.7 per cent tariff hike. Again, the Eswatini Electricity Company (EEC) has requested an average tariff increase of 25.51 and 27.06 per cent for 2025/26 and 2026/27, respectively. This hike proposed by the utility, if approved, will result in the value of electricity units depreciating significantly in 2026. The proposed increment is against the backdrop of an 8.02 per cent tariff hike, which was implemented on April 1, 2024.Chow said these factors also affected their production as a company, such that during the course of the year, they applied for short-time about three times, as the orders they were getting were decreasing.

Meanwhile, through the notice, the MD informed the workers that they will work until their last day, which is December 13, 2024, and the company will pay them their statutory off-duty days, totalling to six days, falling within the notice period for seeking employment elsewhere.  Again, the MD said during the course of the notice period, the workers are allowed to visit the Human Resources Office in case of queries or any advice thereof. Thereafter, he said the retrenchments are necessitated by the fact that the company is at its lowest in terms of productivity.

Production

He said this is because of the huge loss of orders and decline in sales due to global production and supply chain system, which has been disrupted by the consequences of COVID-19 and the Russia/Ukraine war. “The company has made the decision to terminate services of all TQM Textiles Swaziland employees after exploring all options to avert the unfortunate situation,” the MD said in the notice.  He added that prior to the retrenchments, the company engaged with the workers council to negotiate. This, he said, was where they agreed that the establishment shall pay all terminal benefits. He said the terminal benefits will be calculated in terms of sections 33 and 34 of the Employment Act of 1980, as amended. He said the calculated terminal benefits will be given to the workers prior to the payment, which will be made on/or before December 13, 2024.

Moreover, he said as a company, they were grateful and appreciated the workers’ inputs and contributions they made towards the attainment of the company’s goals and objectives. Thereafter, the MD wished them great success in all their future endeavours. Early in the year, this publication reported that Drake Clothing was one of the companies which ceased operations due to a lack of orders. The company had employed about 350 workers. Also, Golden Jubilee Textiles, which had employed about 650 workers, also ceased operations for the same reason.However, this company promised to reopen before the end of the year, as it was working on securing orders from overseas countries. In 2023, Kasumi Apparels Textiles also closed for the same reason and about 1 782 workers lost their jobs. However, later on, the company managed to get back to business and rehired a majority of its workers.

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