This week’s sudden closure of Thetsane-based Philips Lighting Factory could not have come at a worse time for Lesotho’s ailing formal employment sector.
The factory, which was opened amid great expectations in 2009, ceased operations on Thursday this week, leaving 320 breadwinners stranded and with little prospects of finding new employment.
With the country’s largest private-sector employer, the textile sector, continually scaling down operations and shedding jobs in the process, the opening of alternative industries had brought so much hope to a country whose unemployment rate was increasingly becoming cause for concern.
But the closure, which workers say caught them by surprise, has not only affected the individual employees and their immediate families, but also Lesotho’s position as a prime investment destination.
Philips was producing energy-efficient, compact fluorescent lamps for both export and the domestic market, but according to a senior company official, lack of demand for the product had proved to be its downfall.
However, reports also suggest that the company’s predicament was compounded by imports which are being sold at a much cheaper price both here in Lesotho and neighbouring South Africa.
It is the latter development which should worry the government as stricter controls could have saved Philips and other sectors, such as public transport, which also depended on the company’s employees.
After Philips had brought much-needed employment to Lesotho, government should have looked at ways of protecting the business which was also contributing to the country’s economic growth.
Among measures the authorities should have taken was restricting or even banning the importation of cheap competing products, while also engaging management on how the company’s overheads could have been eased.
According to some of the workers, as reported in our story, management had continually complained about the ever-increasing cost of raw material the company was importing from China.
And because of the crucial role the company was playing in the country’s economy, government should have explored ways of helping the firm operate profitably, instead of taking a back seat while the problem escalated.
The company has also indicated the alternative would have been to upgrade its facilities in order to produce the now-preferred advanced lighting technology, which it however, said was too costly to undertake on its own.
We believe government, through the relevant investment arms, should have taken advantage of the company’s blueprint regarding this upgrade, and come in as a partner.
This would not only saved jobs, but also created more employment opportunities while ensuring the quest to widen the industrial base, remained alive.
With the public sector not creating many new jobs in recent years, if at all — and the future of the textile industry hanging in the balance — allowing a company such as Philips to collapse was folly on the part of government.