A Chinese firm running Zambia's largest textile company has temporarily shut it down and placed about 700 workers on forced unpaid leave following massive losses, management said.
Che Ming, a managing director, said the Zambia China Mulungushi Textiles, which has been having problems paying wages to its workers, had been closed to allow the company to source a capital injection.
"Management regrets to inform you that we have suspended operations in the company for a total workforce of about 700, leaving only a skeleton staff of 300 to man vital installations at the plant," Ming said in a memo to staff earlier this week.
The firm is a joint venture between the Zambian government and Qingdao Textile Corporation of China, which holds 66 percent of its shares and runs management.
Ming said the workers would be on unpaid leave until March 31 to allow the firm to look for funding following losses.
He said the company also owed suppliers more than $600000.
State radio reported that workers on Tuesday staged a protest against the Chinese management demanding to be paid salary arrears for more than a year before going on their forced break.
Situated in the tiny town of Kabwe, Lusaka, the company was built by the Zambian government using an interest-free loan from China and began operation in 1983 under the defence ministry management.
After the firm shut down due to operational problems in 1997, the Zambian government offered shares to its new Chinese owners, who recapitalised the company and resumed production. - Sapa-AFP