By Habel Chidawali
Dodoma — The government on Thursday failed to say exactly when the General Tyre factory that was closed in 2009 will resume operations. The minister for Trade, Industries and Investments Charles Mwijage told the Parliament that the government still acknowledges the importance of the factory, which is located in Arusha, but he could not say when it would resume production.
The Member of Parliament for Arusha Urban Godbless Lema (Chadema) had asked a question wanting to know when the government would fulfil its promise of re-opening the factory. Mr Lema whose question was asked on his behalf by Cecilia Paresso (Chadema-Special seats) also wanted to know the fate of hundreds of workers who have not been paid salary arrears.
The factory was closed in after serious operational problems caused by loss-making and a mounting debts. By the time it was shut down in 2009, the government, which is the main shareholder (74 per cent), was feuding with the minor shareholder, Continental AG, which has had 26 per cent ownership. In August 2015 the government acquired 100 per cent shares in the factory after buying back the shares in an undisclosed amount.
The closure of the factory left about 400 workers stranded and a $20 million (Sh42 billion) debt.
Responding to Mr Lema’s question the minister said all workers who have not been paid salaries should forward their claims to the Treasury.
The General Tyre was established in 1969 as a joint venture capacity with an annual production capacity of 320000 tyres. It started operation in 1971. It changed ownership several times before the German-based Continental AG company came in.
The National Development Corporation, which holds the General Tyre shares on behalf of the government, is said to be looking for a potential strategic investor or consortium of investors to partner and revive and resume tyres manufacturing operations at the factory.
“The partnership would also include including carry out plant expansion. The partner will be required to come up with the Tyre Brand that has an international,” a document prepared by NDC says.