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Namibia: Ramatex living on borrowed time

Published date:
Friday, 14 September 2007

THE lifespan of the Ramatex textile factory in Namibia is slowly coming to an end because of squeezed profits.

Recently, Ramatex shut the factory's main component, the textile department.

This week, the company's General Manager, Boon Keong Ong, said the closure was because of financial troubles.

Prime Minister Nahas Angula also confirmed this, saying they have "problems making profit".

Angula said this was the reason why they were trying to ship out some of their machinery from Namibia to sell them elsewhere "to make up" for the losses.

In July, the Government had halted plans by the company to move machinery and other equipment from its Windhoek factory, presumably to Cambodia.

The Prime Minister said Ramatex was trying to sell some of its textile machinery and therefore wanted these exported.

The Government stopped Ramatex from removing the equipment to ensure that proper procedures were in place before any such sale.

At the time of the closure of the textile factory, Ramatex management informed the Namibia Food and Allied Workers Union (Nafau) that the unit was being closed because of environmental concerns from the City of Windhoek.

During the height of its operations Ramatex had a workforce of about 7 000, but has scaled down over the years and now only has around 3 000 workers.

The long-term existence of the Malaysian company in Namibia was all but discounted this week.

During the launch of the book 'The future of the textile and clothing industry in Sub-Saharan Africa', the co-editor of the book - head of research at the Labour Resource and Research Institute (LaRRI) Herbert Jauch - suggested that the current rumblings at the company are indications that its lifespan in the country has started running out.

Ramatex had entered Namibia with the main aim of benefiting from international agreements and policies such as the Africa Growth and Opportunity Act (Agoa) and the Multi-Fibre Agreement (MFA), he said.

Agoa was passed in the USA at the start of the millennium and provided preferential treatment to products originating from developing and least-developed countries.

The MFA was an agreement intended to protect the industries of countries such as the USA and Europe against cheap products from Asia by means of a quota system.

In terms of the MFA, imports from countries that had exhausted their quotas were blocked from entering the markets of developed countries.

These countries, Jauch said, then moved into sub-Saharan Africa to capture additional quota access.

After Ramatex's establishment in Namibia, however, these policies were reviewed and some have even expired, meaning that Asian companies were again free to enter the Western markets, and African countries were simply unable to keep up with the competition.

"When the quotas disappeared (in 2004), Chinese exports immediately saw a 60 per cent increase.

This is when Ramatex downsized and about 1 500 workers were retrenched," Jauch said.

"There is just no way that Africa could compete with Asia on this level," he said.

Ramatex currently operates exclusively as a garments factory after recently closing its dyeing, knitting and spinning factories.

The book was launched by the Friedrich Ebert Foundation, and examines some of the African experiences in the garments and textiles industry.

Countries examined include Ghana, Kenya, South Africa, Zambia, Zimbabwe and Namibia.

“ Latest AGOA Trade Data currently available on

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

Other regularly updated trade statistics on 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.

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