- Category: Stories
- Published on Tuesday, 01 February 2011 19:37
- Written by Charles Rukuni
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After a series of glitches, Bulawayo business tycoon Delma Lupepe has finally taken over towelling giant, Merspin, at the beginning of this month and has pledged to invest $30 billion within the next four months and create 800 new jobs.
Lupepe's consortium, Maydeep Investments, won the bid to take over Merspin last year beating six other contestants but was bogged down by wrangles of one form or another leading to speculation that his bid of $600 million, which was the highest, may be scuttled.
The company was initially placed on provisional liquidation in June 2000 after failing to pay its creditors about $300 million before this was changed to judicial management to save more than 700 jobs. It was taken off judicial management on August 27, paving the way for Lupepe to take over.
Lupepe has been given until September 24 to announce his board of directors.
An elated Cecil Madondo, who was the company's judicial manager, said he was happy his job was over because he had brought the company back to profitability and saved jobs. He was certain Lupepe would push the company to even greater heights because it was a very viable enterprise.
Madondo said the company had a turnover of only $24 million a month when he took over but this had risen steadily to over $2.3 billion a month.
He said the company, which had been fleeced by its previous owners mainly through under-invoicing, was a sleeping giant with a potential of increasing sales to over $15 billion a month.
Charges of under-invoicing against the previous owners were reported to the police but the case could not hold because of lack of tangible evidence.
Flanked by his new management team of chief finance officer Pangisile Matikiti, chief marketing officer Nkosikhona Ndlovu and corporate secretary Kennedy Makahamadze, an upbeat Lupepe said: "We want to make Merspin great again. I know it was a great company, but we want to make it even greater".
He said the company was presently operating at only 35 percent capacity largely because of outdated equipment the latest of which was 15 years old while the oldest was 30 years old.
He said the company had applied for $30 billion under the Productive Sector Facility and intended to buy modern equipment. The new equipment, he said should enable the company to double its capacity and attain ISO9001 certification which would enhance its export competitiveness in the European Union.
"With the new equipment, we should be able to improve not only the quality of our product but the quantity as well," Lupepe said. "This will enable us to reduce the price of our products on the export market."
He said while the company might not be able to reduce the price of its products on the domestic market, it should at least be able to hold them at current levels.
Lupepe said the new equipment should also enable the company to double its workforce from the present 800 to about 1 600 within a year. It should also enable the company to increase its turnover to $12 billion a month with a profit of $3 billion a month moving on to a turnover of US$1 million by July next year.
Workers, who have endured nearly four years of uncertainty, will also have something to smile about. The company is reserving 20 percent of its stake for employees who will benefit through profit sharing.
Lupepe said he was also planning to takeover Glowweave, a company jointly owned by Merspin and a South African company, Glodina. The company was placed on judicial management after failing to pay its creditors $70 million.
Lupepe said he had offered to buy Glodina's 50 percent stake but was not prepared to take over its machinery because it was outdated.
Under the arrangement between Merspin and Glodina, the South African company supplied machinery as its stake.