Sheraton launches employee share scheme and new production facilities
Sheraton launches employee share scheme and new production facilities
Sheraton Textiles yesterday commissioned a multimillion-rand production facility in Diep River, Cape Town, while a worker’s trust was launched to acquire 15% of the company.
The equity value of Esops (employee share ownership plans) in South Africa is estimated at R70.3 billion, and they cover more than 118 companies, the Industrial Development Corporation (IDC) said yesterday. The IDC-owned Sheraton is one of South Africa’s biggest bedding and home textile companies.
Speaking at the event, Minister of Trade, Industry and Competition (dtic) Ebrahim Patel said the development was in line with the government’s localisation and industrialisation initiatives aimed at strengthening the competitiveness of the Clothing, Textiles, Footwear and Leather Industries (CTFL).
“It’s imperative for local companies to invest in state-of-the-art plant and production facilities and machinery so locally produced groups can compete against imports. This way, we help preserve local jobs and, in the process, enhance the country’s industrial capacity,” Patel said.
The development financier, the IDC, had provided R140 million towards Sheraton’s acquisition of the new plant.
The worker’s trust will benefit nearly 400 workers of the company. As part of the terms of the trust, the IDC will provide funding for the trust to acquire a 15% stake in Sheraton to the benefit of employees.
Since 2019, the number of Esops has grown to 125 with 98 having already been established – 27 in process of attaining registration – and in the process benefiting 551 000 workers, the IDC said.
“Esops are key to transform the economy, address inequality and unemployment. Since 2019, South African workers spread across key sectors of the economy have become owners of businesses, some which are key to industrialising our economy. Among these is Sheraton Textiles,” said Patel.
He said the newly launched trust would also have a representative on the Sheraton Textiles Holdings Board, giving workers a voice in the strategic and policy direction of the company.
IDC interim CEO David Jarvis committed the IDC to financing more Esops, noting that the development funder had contributed significantly to transforming the local economy and in the process empowering workers in their respective workplaces.
“However small their stake in the company, workers are motivated to increase productivity levels in that business. In this case, Sheraton Textiles employees now have equity in a 104-year-old business that has special historical ties to SA’s textile industry,” said Jarvis.
Sheraton CEO Saleem Mowzer thanked the IDC for its contribution to Sheraton’s growth trajectory.
“The local textiles industry is facing several headwinds most which relate to cheap imports from the east. The fact that we have been able to maintain our growth momentum in the face of such adversity is largely due to support from partners like the IDC and the dtic. This moment we have just witnessed is significant to the workers of this company in that they can rightfully begin to claim ownership of this business,” said Mowzer.
BUSINESS REPORT