US embassy cable - 05LILONGWE596

UNCLAS LILONGWE 000596 
 
SIPDIS 
 
STATE FOR AF/S 
STATE FOR AF/EPS MARY FLEMING 
DEPT PLEASE PASS TO USTR 
DOC FOR 4510/ITA/MAC/ANESA/OA 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, EFIN, MI, AGOA, Economic 
SUBJECT: MALAWI LOSES MORE GARMENT JOBS 
 
1. CHIRIMBA GARMENTS COMPANY IN BLANTYRE ANNOUNCED ON JULY 
11TH IT IS LAYING OFF OF 860 WORKERS DUE TO A CONTINUED 
DECLINE IN ORDERS UNDER THE AGOA INITIATIVE.   THE TOTAL 
NUMBER OF WORKERS LAID OFF AT CHIRIMBA SINCE THE BEGINNING 
OF THE YEAR IS 1,500.  MANAGEMENT SAYS THAT NUMBER WILL 
CONTINUE TO GROW AS THE COMPANY SEES NO INCREASE OF ORDERS 
ON THE HORIZON. 
 
2. CHIRIMBA, A TAIWANESE-OWNED COMPANY, WILL CONTINUE TO 
EXPORT TO THE SOUTH AFRICAN MARKET.  IT STILL EMPLOYS AROUND 
2,000 WORKERS.  DURING THE PEAK IN AGOA ORDERS CHIRIMBA 
PRODUCTS WERE EQUALLY EXPORTED TO THE U.S. AND SOUTH AFRICAN 
MARKETS.  CHIRIMBA'S CURRENT PRODUCTION FOR AGOA IS EXPECTED 
TO EXPIRE IN AUGUST 2005, UNLESS NEW ORDERS COME IN. 
 
3. COMMENT: THIS CONTINUES THE TREND OF AGOA-FOCUSED TEXTILE 
COMPANIES SCALING DOWN OR CLOSING UP OPERATIONS AFTER THE 
JANUARY 1ST EXPIRATION OF THE QUOTA SYSTEM.  AGOA CREATED 
JOBS, ONCE AT OVER 7,000, POST NOW ESTIMATES TO BE AROUND 
3,000.  THESE ARE STILL HEAVILY FOCUSED IN TEXTILES, WHILE 
THERE HAS BEEN LITTLE DEVELOPMENT OF OTHER SECTORS. END 
COMMENT. 
 
GILMOUR