Local textile company opens new factory and launches worker shareholding programme

Cape Town-based bedding and linen manufacturer Sheraton Textiles (Sheraton) on Monday officially inaugurated its new factory and launched its Workers Trust employee share ownership programme (ESOP). The company is currently 100%-owned by national development finance institution the Industrial Development Corporation (IDC), which invested R140-million in the establishment of the new, state-of-the-art, factory, which greatly increases the company’s efficiency and competitiveness.

The ESOP will see the company’s workers be given 15% of its equity. South African ESOPs are open to all workers, regardless of colour. The workers’ shares will be held by the Workers Trust, headed by four trustees elected by the workers, with a fifth trustee appointed by the company. There will also be an independent, nonexecutive, trustee who would be the chairperson. The four trustees have been elected, and the fifth appointed, already. The process of selecting the chairperson is under way and will be concluded in the next few weeks. The chairperson will be selected by the workers.

The IDC really believed in the future of Sheraton, assured IDC interim CEO David Jarvis in his address. “It really is a facility we can all be proud of.” He noted that there had been “challenges” with the old factory (for example, the production line had been divided between different floors, making it less efficient). “It’s clear that you all have pride in this [new] facility.”

“The IDC supported, obviously, this plant. Moving here was an imperative, which we supported,” he affirmed. “This is not a CSI [corporate social] investment. It’s an investment for growth.”

“We are very proud of our staff,” highlighted Sheraton CEO Saleem Mowzer. “We have an excellent team from the IDC who work with us, on a day-to-day basis.”

“Today represents an important moment for our industry,” enthused Southern African Clothing and Textile Workers’ Union president Susan Khumalo, in her address. She praised the company for meeting the challenge it faced, by investing in its new, modern factory, thereby securing a more sustainable future for its workers. And she praised it for establishing an ESOP.

“We want more industrial and economic democracy,” she asserted. More and more workers were benefiting from ESOPs, but more needed to be done. ESOPs were not only morally right, but good for business.

In his address, Trade, Industry and Competition Minister Ebrahim Patel reported that there were now 125 companies in South Africa with ESOPs. These ranged from major groups to small companies. Today, 551 000 workers had shares in the companies that employed them, and the total value of shares held by workers was R70-billion. Last year, R3-billion was paid out to workers in dividends.