News / National
Marvo resumes operations
24 Sep 2018 at 05:15hrs | Views
BULAWAYO'S stationery giant, Marvo Stationery Manufacturers (Marvo), has resumed operations on a small scale and is banking on an anticipated $1,5 million investment from a local unnamed investor to scale up production, NewsDay has established.
Marvo was placed under judicial management in September 2014 due to debt distress. The company accrued a debt of about $2,5 million owed to both creditors and its employees.
Judicial manager Chrispen Mwete of C Mwete and Company reported that several efforts to revive the company fell through as potential foreign investors pulled out, citing lack of clarity on dividend repatriation.
In 2016, a leading Botswana company, Lexus Stationery, which had promised to inject more than $150 000 to revive production, pulled out of the deal at the 11th hour.
Last week, Mwete told NewsDay that the company had started operations on a small scale.
"We have actually started operations but on a small scale and we will try to build on that. We have also got an investor who is coming in. We got orders from some big organisations," Mwete said.
"So, for now what we did was to buy the raw material that they require and start. But in the process, we bought extra so that we can approach other big organisations. It seems they will welcome the delivery. So that's how far we have gone."
He, however, could not disclose how big the orders were.
"What they said is that if we delivered, only then would they tell that we can process their orders. They would then sit down and give us proper business," he said.
Asked how much the investor was injecting into the business, Mwete said: "We told them what we want. So, I don't know what they will offer, but they know what we want."
The company needs $1,5 million to operate at full capacity.
Marvo, which was established in 1966 and employed 600 people at its peak, has struggled to compete with imported stationery largely because of its obsolete machinery.
In a report prepared in April 2015, Mwete alleged that Marvo Stationery directors swindled the company of more than $150 000, leaving it insolvent.
The report also showed that the directors had failed to account for a loan amounting to over $100 000 borrowed from the Distressed Industries and Marginalised Areas Fund.
Mwete's report revealed that of the $750 000 loan that Marvo received in 2012, $437 000 was used to settle a debt with ZB Bank, which in his view was abuse of the loan, which was meant to finance working capital. On the contrary, the company transferred risk from one bank to another.
One of the workers, Mbonisi Gumbo, alleged that some of the company directors had opened some unscrupulous shelf companies, which they used to rip off the company. He also alleged that the directors later on purported to sell the company in a bid to clear their names.
"We pray that whosoever is coming in to invest in Marvo should at least prioritise workers. Their situation is urgent," Gumbo said.
Marvo was placed under judicial management in September 2014 due to debt distress. The company accrued a debt of about $2,5 million owed to both creditors and its employees.
Judicial manager Chrispen Mwete of C Mwete and Company reported that several efforts to revive the company fell through as potential foreign investors pulled out, citing lack of clarity on dividend repatriation.
In 2016, a leading Botswana company, Lexus Stationery, which had promised to inject more than $150 000 to revive production, pulled out of the deal at the 11th hour.
Last week, Mwete told NewsDay that the company had started operations on a small scale.
"We have actually started operations but on a small scale and we will try to build on that. We have also got an investor who is coming in. We got orders from some big organisations," Mwete said.
"So, for now what we did was to buy the raw material that they require and start. But in the process, we bought extra so that we can approach other big organisations. It seems they will welcome the delivery. So that's how far we have gone."
He, however, could not disclose how big the orders were.
Asked how much the investor was injecting into the business, Mwete said: "We told them what we want. So, I don't know what they will offer, but they know what we want."
The company needs $1,5 million to operate at full capacity.
Marvo, which was established in 1966 and employed 600 people at its peak, has struggled to compete with imported stationery largely because of its obsolete machinery.
In a report prepared in April 2015, Mwete alleged that Marvo Stationery directors swindled the company of more than $150 000, leaving it insolvent.
The report also showed that the directors had failed to account for a loan amounting to over $100 000 borrowed from the Distressed Industries and Marginalised Areas Fund.
Mwete's report revealed that of the $750 000 loan that Marvo received in 2012, $437 000 was used to settle a debt with ZB Bank, which in his view was abuse of the loan, which was meant to finance working capital. On the contrary, the company transferred risk from one bank to another.
One of the workers, Mbonisi Gumbo, alleged that some of the company directors had opened some unscrupulous shelf companies, which they used to rip off the company. He also alleged that the directors later on purported to sell the company in a bid to clear their names.
"We pray that whosoever is coming in to invest in Marvo should at least prioritise workers. Their situation is urgent," Gumbo said.
Source - newsday
