Rwanda: Burera Garment Factory Stops Operations, 1,000 Remain Jobless

About 1,000 people who have been working at Burera Garment Factory are now jobless as the plant remains idle following the dissolution of partnership between Burera district and Noguchi Holdings Company.

The garment factory and adjacent Integrated Craft Production Centres (ICPC) locally known as ‘Agakiriro’, located on 2.5 hectare in Rugarama Sector in Burera, was established through a joint venture between the two parties as shareholders

The hundreds of jobless people, mostly youth, may have to wait a bit longer to regain employment, until the district sells its shares as part of the ongoing effort to privatize the plant.

“There is an issue of lack of working capital and therefore Burera district seeks to sell its shares worth 55 percent so that the factory fully goes in private hands,” Joseph Munyaneza, Burera district vice mayor in charge of economic development, told The New Times.

Valued at about Rwf1 billion, the facility had the capacity of making over 480,000 pieces of cloth per month and creating about 1,000 jobs in garment production.

However, its operations hit a snag in 2018, after the parties disagreed on a working strategy.

The disagreement also left in limbo the process to acquire a loan from a local bank to get the money that was to serve as operational capital.

The two parties reached the decision to resume separate operations, meaning that Noguchi Holdings had to fully operate the factory while the district had to operate the Agakiriro.

Financial constraints

However, Munyaneza told The New Times that the company could not buy the district’s shares to fully operate the factory alone citing financial constraints.

This has led the factory to stop operations again in 2020.

“The factory is not operating. It lacked financial capacity to run and therefore stopped operations. It is set to resume operations once totally privatized. Whoever will buy the district’s shares will then have a joint venture with Noguchi Holdings,” he said.

The New Times has learnt the privatization process is set to be launched on May 22 this year.

The privatization process, he said, is led by the Rwanda Development Board.

Gislain-Marcel Ibariza, the chair of board of shareholders of the company told this paper that when they started, the company designed a project and applied for loan in a local bank to get enough capital but the district council refused to approve.