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CICAM shuts Garoua plant over XAF1.3 bln debt

CICAM shuts Garoua plant over XAF1.3 bln debt
  • Comments   -   Monday, 18 January 2021 18:27

(Business in Cameroon) - Financially fragilized, for years now, by the fierce competition from fabrics imported from China and West Africa, Cotonnière Industrielle du Cameroun-Cicam (which is the only cotton processor in Central Africa) recently took another blow. Indeed, on October 18, 2020, this public company closed its Garoua-based plant, laying off 352 employees.

Credible sources reveal that this plant closure was due to Sodecoton’s (another state-owned company) decision to stop supplying raw materials to CICAM. According to sources close to the case, the memorandum of understanding binding the two parties states that Sodecoton can decide to stop supplying Cicam when the latter’s debt toward it exceeds XAF200 million. Currently, Cicam’s debt towards Sodecoton is estimated at XAF1.3 billion, thus the suspension.  

Before making that decision, Sodecoton made numerous concessions. "Before the coronavirus pandemic, Cicam’s debt was already XAF600 million. But, it argued that the pandemic offered it the opportunity to manufacture and sell face masks and pay its debt. Unfortunately, that debt kept growing and is now XAF1.3 billion," an authorized source explains.  

A well-informed source believes that Sodecoton made that decision mainly because despite the debt Cicam owes, it decided to import XAF600 million worth of Ecrus (unbleached fabric) while the Garoua plant, at full throttle, can produce 600,000 tons of such fabric monthly, for an estimated cotton consumption of XAF120 million. According to the source, this shows that Cicam’s top management is not considerate of the situation of the Garoua plant.  

With the closure of the Garoua plant, the Cicam could (as was already the case in 2020) experience some disruptions in the production of the March 8, 2021, commemorative wax print (for the International Women's Day) that provides it with a significant portion of its yearly turnover. This hypothesis is all the more plausible since even the imports of the unbleached fabrics can be disrupted by international logistics problems caused by the fear of a 2nd wave of the coronavirus pandemic.  

Brice R. Mbodiam

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