Newsletter No.34 23 September 2016
Gelvenor mulls commercial use of K27 textile technology
Gelvenor Textiles, a South African fabric engineering company, wants to develop applications for commercial use of its K27 textile technology. For this purpose, it has joined hands with The Innovation Hub’s OpenIX to invite business ideas from various enterprises. The firm will collaborate with the winners to develop and market their products.
The plain weave K27 fabric is woven using high tenacity nylon yarn and coated with a silicone elastomer for a high strength to weight ratio. Some of the unique properties of the fabric include self-repair characteristics, puncture and tear resistance, shape memory as well as chemical, water and UV resistance.
The company has already identified some possible applications of the fabric which include creating protective wear for marine and military personnel, camping equipment and self-healing linings for water containers and gas tanks. The K27 fabric can also be used for making patient transfer slides, parachutes, wing suits, hot air balloon envelopes, PPE for factory and healthcare workers and more.
But, to find more possible application of the fabric, the companies are inviting proposals from small, medium and micro-sized enterprises (SMMEs) and research groups. Participants based in or willing to set up operations in the South African province of Gauteng will be preferred, however, innovative proposals from other locations will also be considered, Innovation Hub said on its website. Solution providers based in Gauteng will be eligible for proof of concept funding from The Innovation Hub to support the development of their product and business model.
The Innovation Hub said that the proposed solutions will be judged on their value propositions and scientific merits. The participating SMMEs should also present data to support their claims and should be willing to work as a team with the challenge owner’s staff. (KD)
Edcon’s banks and bondholders take control of the struggling retailer
Edcon has proposed a R14.4bn overhaul of its capital structure, to cede control of the clothing and footwear retailer’s holding company to two other companies majority held by its creditors.
If the deal passes regulatory muster, two newly established companies, HoldCo 1 and HoldCo 2, are expected to take control of Edcon’s operating subsidiaries from Bain Capital, as the debt-laden retailer seeks to relieve its debt burden.
HoldCo 1 will issue about R2.2bn in new dollar-denominated notes to refinance and pay off existing debt. Some of the cash will also be used to inject liquidity into the group.
HoldCo 2 will issue two different notes — denominated in euros and dollars — worth a collective R12.2bn to refinance existing debt.
Edcon’s empowerment trust and managers will receive economic rights to distributions from HoldCo 2.
“This important milestone in the history of the Edcon Group follows the recent payment deferral implemented in May 2016 and the securing of R1.5bn of bridge financing,” Edcon group CEO Bernie Brookes said in a statement.
The group successfully deferred payment to December 2016, making R1.6bn in cash available to it. The bridge financing was made available in two equal tranches.
Brookes said the deferral, bridge finance, and the proposed restructure “all indicate the significant support we are receiving from our creditor base to ensure that we have a strong, robust and re-energised Edcon going forward”.
Taken private in a highly leveraged R25bn buyout by Bain in 2007, Edcon has struggled to grow at a fast enough rate to pay down debt.
“We have been living beyond our means, expenditure was more than our income,” Brookes told a news conference.
New owners of the company, which also sells household goods and footwear, are Standard Bank, Barclays Africa Group, FirstRand, Standard Chartered and Investec. Others are Franklin Templeton and Harvard Pension Fund.
The retailer has been grappling with an over-leveraged capital structure for several years, after troubles in its credit business in 2014 coincided with an economic slowdown and weak consumer spending in SA.
Brookes said Edcon reached “a catastrophic situation in March” and had to choose between business rescue or not paying debt holders.
African firms to set up $12.44 million garment factory in Rwanda
A new RWF 10 billion ($12.44 million) garment and footwear factory will come up in Kigali, capital of East African nation of Rwanda, as two African companies have signed an agreement for the purpose. Albert Supply Ltd and Prime Economic Zone Ltd have entered into a renewable 5-year land lease agreement with Rwanda’s ministry of trade and industry (Minicom).
As per the deal, the two companies will obtain 2.5 hectares of land to set up the factory, for which operation is expected to begin by July 2017, Rwandan media reports said.
The deal was signed between textile investors and the ministry after the former complained about the costs of land in the area being too high. The land being provided to the companies is part of 5 hectares of land secured by the ministry in the Kigali Special Economic Zone.
Albert Supply will manufacture garments from cotton leather and other raw materials, whereas Prime Economic Zone will produce belts, bags and shoes from leather.
Albert Supply is a competent investor which can bring about a change to influence others, said Francois Kanimba, Minicom minister of Rwanda.
The government of Rwanda is promoting domestic production and consumption through the ‘made-in-Rwanda’ campaign. Additionally, more than 400 tailors under the Kigali Garment Centre (KGC) are raising RWF 3 billion ($3.73 million) for a clothing factory. (KD)
Did you know….
Apparel manufacturing industry in the US has declined by more than 80% over the past two decades.
Germany has the highest hourly compensation costs within the apparel manufacturing industry.
While the Philippines, with compensation costs at 88 cents per hour, had the lowest among those countries studied.
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