MALAWI LOSES MORE GARMENT JOBS

UNCLAS LILONGWE 000596

SIPDIS

STATE FOR AF/S
STATE FOR AF/EPS MARY FLEMING
DEPT PLEASE PASS TO USTR
DOC FOR 4510/ITA/MAC/ANESA/OA

E.O. 12958: N/A
TAGS: ECON ETRD EFIN MI AGOA
SUBJECT: MALAWI LOSES MORE GARMENT JOBS


1. CHIRIMBA GARMENTS COMPANY IN BLANTYRE ANNOUNCED ON JULY
11TH IT IS LAYING OFF OF 860 WORKERS DUE TO A CONTINUED
DECLINE IN ORDERS UNDER THE AGOA INITIATIVE. THE TOTAL
NUMBER OF WORKERS LAID OFF AT CHIRIMBA SINCE THE BEGINNING
OF THE YEAR IS 1,500. MANAGEMENT SAYS THAT NUMBER WILL
CONTINUE TO GROW AS THE COMPANY SEES NO INCREASE OF ORDERS
ON THE HORIZON.


2. CHIRIMBA, A TAIWANESE-OWNED COMPANY, WILL CONTINUE TO
EXPORT TO THE SOUTH AFRICAN MARKET. IT STILL EMPLOYS AROUND
2,000 WORKERS. DURING THE PEAK IN AGOA ORDERS CHIRIMBA
PRODUCTS WERE EQUALLY EXPORTED TO THE U.S. AND SOUTH AFRICAN
MARKETS. CHIRIMBA'S CURRENT PRODUCTION FOR AGOA IS EXPECTED
TO EXPIRE IN AUGUST 2005, UNLESS NEW ORDERS COME IN.


3. COMMENT: THIS CONTINUES THE TREND OF AGOA-FOCUSED TEXTILE
COMPANIES SCALING DOWN OR CLOSING UP OPERATIONS AFTER THE
JANUARY 1ST EXPIRATION OF THE QUOTA SYSTEM. AGOA CREATED
JOBS, ONCE AT OVER 7,000, POST NOW ESTIMATES TO BE AROUND
3,000. THESE ARE STILL HEAVILY FOCUSED IN TEXTILES, WHILE
THERE HAS BEEN LITTLE DEVELOPMENT OF OTHER SECTORS. END
COMMENT.

GILMOUR