Textile Industries - Hilla

# Template State Owned Enterprises- Company Overviews OCPA - Ministry of Industry & Minerals Note: All currency figures are in 000's of Iraqi Dinars unless otherwise noted. 1. General Information Company Name: State Company for Textile Industries - Hilla Sector Brief Description Manufacturer of polyester fabrics and velvet at two separate factories. Started 1970. Revenue in 2002 (Iraqi Dinars '000s) 12000000 # of Employees 2712 Annual Employee Salaries & Bonus 3500000 Headquarters Address Center of Hilla, towards south on road to Najaf. 2. Company Highlights Minimal damage to facilities. Mgmt believes it "could" become viable in free market if it was free to change product offerings. Company is forced to overpay for the cotton, and in higher quantities than needed. Quality of output is reportedly very low. Imports are of better quality and cheaper than Company's real operating expenses. Received $2.3M in MOU subsidies in 2002. Without these, Company is unprofitable even if it sells at market prices. Although Company may not be viable in long term without massive restructuring, there is no reason not to let it operate while salaries are paid by CPA, raw materials are available and equipment is in running condition. Incremental operating costs are relatively low. Company benefits 3.3B ID from CPA policy of cancellation of inter-governmental debts. Allocated $1M USD for 2H 2003 operating budget and provided with 2 mw off of grid. 3. Facilities Name Province City Grid Damage % Power Needs Main Factory Babel Hilla 3-5 mw Value of All Plant & Equipment Before War, and Initial Purchase Dates and Prices for Major Items Originally paid $38M USD for P&E between 20 and 33 years ago. Mgmt believes its worth 20% that today. 4. Products Product Name Unit Measurement Design Capacity Available Capacity 2002 Production 2002 Revenue Yarn kg 300000 300000 436,000 (?) 0 Rayon Fabrics and Their Mixtures meter 21000000 21000000 20782000 10000000 Jacquard and Velvet Fabrics meter 875000 875000 1,260,000 (?) 2000000 Description of Importance of Products to Other Iraqi Industries None. Separate Note: 2002 production claims are higher than capacity. Needs clarification. Possibly, the machines are being over used. 5. Customers Customer Name 2002 Revenue Subsidized (Y/N) Products Sold to Customer and Unit Pricing #1 State company of central markets. No Fabrics at 470 ID / meter, velvel at 1,700 ID / meter. #2 Private sector No 6. Suppliers Supplier Name 2002 Purchases Subsidized (Y/N) Products Purchased and Unit Pricing State Company of Cotton Industries 1300 Ton 1.7Million for $ 1,308 USD/Ton while international price is $700 to $800 for the same quality cotton (short fiber) Imports under MOUs Contracts $2.3M USD Yes For raw materials Current Payment Terms From Suppliers Cash upon delivery or standard MOU agreement. 7. Imports & Exports 2002 Import Markets for Raw Materials Man-made fabrics imported from China and France. Potential Import Markets in Free Market Europe, Asia and USA 2002 Export Markets for Finished Products None Potential Export Markets in Free Market None 8. Competition Description of Competitive Situation Competes against other textile SOEs, who combined have 55% of market. Also, heavy competition from imports, who have 20% of market. Market Share Description 25% of the market. 9. Summary of War Damage & Looting of Property & Equipment Description of Damage 400 sq meter storage facility completely destroyed. Current Operating Status Re-started at 15K meters/day in early June 2003. 6 Immediate Property & Equipment Needs To Restart Operations None. Total Cost to Return to Pre-War Condition Excluding storage facility, nothing.