Search

 

Cablegate: Wasit State Textile Factory Sews Itself Back to Life

VZCZCXYZ0000
RR RUEHWEB

DE RUEHGB #1142/01 1031339
ZNR UUUUU ZZH
R 121339Z APR 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 6811
RUCPDC/USDOC WASHDC

UNCLAS BAGHDAD 001142

SIPDIS

SIPDIS

NEA-I ECON PLEASE PASS TO DOD TFBSO

E.O. 12958: N/A
TAGS: ECON ENRG ETRD IZ
SUBJECT: WASIT STATE TEXTILE FACTORY SEWS ITSELF BACK TO LIFE

1. (U) This is a joint PRT Wasit/Embassy reporting cable.

SUMMARY

2. (U) During a March 11 visit to the Wasit State Company for
Textiles, Wasit PRT members observed production lines back up and
running, after having been shuttered just two months ago. A grant
from the Task Force for Business and Stability Operations (TF BSO),
a loan from the Ministry of Industry and Minerals (MIMS), and a
significant new intra-governmental contract have been instrumental
in restarting operations at the plant. This State Owned Enterprise
(SOE) continues to face significant operational challenges, such as
raw material shortages (especially cotton), inconsistent electricity
supply, out-dated capital equipment, and lack of contracts.
Although much remains to be done, the restart of the factory's
operations and its potential to generate revenue and sustain
employment is encouraging. END SUMMARY.

COMING BACK TO LIFE...
--------------------

3. (U) During a March 11 visit to the Wasit State Company for
Textiles, Wasit PRT members observed production lines back up and
running, after having been shuttered just two months ago. Some
2,000 workers are now back on the factory floor, producing T-shirts,
berets, and uniforms. A January PRT visit to the company had found
most of this SOE's 5,500 employees had stopped coming to work in
protest of non-payment of wages, forcing the factories to close.
Revenue from this SOE provides 40 percent of workers' wages and its
parent, MIMS, provides 60 percent. High production costs and lack
of raw materials, however, dried up revenue streams, and left the
SOE unable to cover its portion of the payroll.

...WITH A HELPING HAND
--------------------

5. (U) A grant from the Department of Defense's Task Force for
Business and Stability Operations (TF BSO), a loan from MIMS, and a
significant new intra-governmental contract played an instrumental
role in restarting operations at the plant. In February, a 1.35
million USD grant from TF BSO allowed the SOE to purchase the needed
raw materials of polyester and acrylic, from two Iraqi companies, Al
Rathath Company and Al Bashrah Al Iraqya Company. These companies
reportedly import these materials from Turkey, the United States,
and East Asia. The factory's director general, Hamid Al-ssfi, said
the SOE received a loan from MIMS to cover its 40 percent share wage
costs for the next three years. The SOE has reportedly secured a
1.5 million USD contract with the Ministry of Defense for underwear
orders. Al-ssfi also stated MIMS had awarded an 850,000 USD grant
to the factory for a cotton gin purchase. To date, the SOE has
reportedly received 600,000 USD of this amount, but has not yet
purchased the machinery.

6. (SBU) Although press reports in Wasit indicated the factory had
received 13 million USD in loans from the Government of Iran,
factory management denied having received any money. Al-ssfi
reported that the Iranians had provided 100 million USD to MIMs to
support five of its SOEs, and that 12.5 million had been allocated.
To date, he said, the factory had not received this allocation nor
knew when it would (NOTE: MIMS Deputy Minister Mohammed al-Ani
confirmed to Embassy econoffs in February of this Iranian soft loan,
the majority of which MIMs had budgeted for state owned sugar,
rubber, vegetable oil, and textile factories. Al-Ani was not
convinced these loans would actually be dispersed, however, as they
required action in the Council of Representatives. END NOTE.)

CONDITIONS REMAIN FAR FROM IDEAL
--------------------------------

6. (U) The SOE continues to face significant operational challenges,
such as raw material shortages (especially cotton), inconsistent
electricity supply, out-dated capital equipment, and lack of
contracts. Al-ssfi stated that electricity was supplied at only 25
to 35 percent of the factory's demand, blaming this deficit for
raising his cost of goods sold. His finished goods prices are
therefore too high to compete with imports, primarily from Iran and
China. Al-ssfi said his cotton inputs were primarily from Kirkuk
and Ninewa provinces, but requested US assistance in procuring
US-produced cotton.

7. (U) Employment also remains a major challenge to the SOE.
According to Hamid, his employment rolls swelled by 3,500 to 5,467,
when the GOI reassigned many workers following the 2003 regime
change. Hamid added there 2,006 of his employees are completely
idle, yet continue to receive monthly wages.

COMMENT
-------

8. (U) PRT Wasit was especially encouraged by the number of women
and disabled persons, such as amputees, working in the factory.
Employees were also candid in sharing their satisfaction of being
back at work. However, much of the equipment lay idle during our
visit, and we will need to work with management to address the
factory's power supply issues, open a new production line to utilize
its entire work force, and upgrade its capital equipment. Once
these issues are successfully resolved, PRT Wasit believes the
enterprise can eventually be a significant employment and revenue
generator. Embassy econoffs are working through FCS to identify
American suppliers of cotton that could sell to the factory. END
COMMENT.

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC