U.S. Underwear Manufacturer Sells Its South Africa Operation
JOHANNESBURG, South Africa (AP) _ International Playtex Inc., an American underwear maker, has joined the ranks of foreign firms pulling out of South Africa, a local company executive said Wednesday.
The U.S. company sold 100 percent of its assets to the local managers and arranged for continued manufacture and sale of its products, said Bill Quinn, who was managing director of Playtex Africa Ltd. and has the same post in the new company.
At corporate headquarters in Stamford, Conn., Playtex Vice Chairman Hercules Sotos said the Nov. 14 sale was part of the company’s overall restructuring plan.
″We need the proceeds,″ Sotos said, noting that Playtex also has sold divisions in Belgium, Switzerland and the Netherlands. He declined to disclose the sale price but said the deal had been under negotiation for six months.
Scores of U.S. and other foreign firms have announced their withdrawal from South Africa in recent months, citing impatience with the government’s slow- paced reforms, pressure from anti-apartheid movements at home and apprehensions about South Africa’s ailing economy.
Barclays Bank of Britain announced this week it sold its 40.4 percent share of its South African affiliate - the country’s largest commercial bank.
Quinn said the new company, PTX Distributors Ltd., will pay a royalty to the U.S. firm but retain access to new Playtex products and designs. He said the 400 to 450 employees at the plant in Durban, 90 percent of them Indian, will retain their jobs.
″It is very much a case of business as usual,″ he said. ″We have written to our local suppliers and customers throughout South Africa with the assurance that as far as our manufacturing operation and quality of product is concerned, nothing will change.
″From a wholly owned subsidiary of International Playtex we have become a totally South African-owned manufacturing business,″ Quinn said.
He declined to disclose the sale price or the value of the assets.
The international community has been moving slowly toward imposing sanctions against South Africa to protest apartheid, under which the country’s 24 million blacks have no vote in national affairs and the 5 million whites control the economy and government.
The number of U.S. companies with assets in South Africa has dropped from 325 to 265 in the past two years.
Seven major corporations have announced disinvestment plans in the past two months: General Motors Corp., International Business Machines Corp., Coca- Cola, Honeywell Inc., Eastman Kodak, Sara Lee Corp. and Warner Communications Inc.
Earlier this year Proctor & Gamble Co., General Electric and Marriott Corp. announced divestment plans.