Sale of Cleanwell Dry Cleaners Press Release

Swan Dry Cleaners Limited is a company registered in Zambia and engaged in the provision of dry cleaning services in Ndola. It is jointly owned by Messrs J C Chalansi and P L Ng'andwe, who acquired the company in 1988.

Since its establishment in 1987, Cleanwell Dry Cleaners has focused on the provision of dry cleaning services to contract and retail customers. It is a division of Zamcargo Holdings Limited, a wholly owned subsidiary of Zambia Consolidated Copper Mines Limited (ZCCM), with two branches in Lusaka (Chishango Road and Soweto market premises) and one branch in Kitwe.

Unfortunately, due to liquidity and marketing deficiencies that have been prominent in the parastatal sector, Cleanwell Dry Cleaners failed to capitalise on inherent market and production advantages.

Completion of the sale was delayed by the injunction, instituted by the Cleanwell Dry Cleaners Management Buyout Team, challenging the decision to award of the unit to Swan Dry Cleaners Limited.

Following the high court ruling in the Zambia Privatisation Agency's favour and subsequent withdrawal of the case by the plaintiff, Swan Dry Cleaners Limited concluded the acquisition of 100% of the shares in Cleanwell Dry Cleaners for a total consideration of K 89 million.

The 100% share ownership includes the Kitwe premises and the continuation of the lease to the property at Chishango Road, but excludes the lease for the property near Soweto market. Swan Dry Cleaners Limited also agreed to maintain all the workers who were still at Cleanwell Dry Cleaners on May 31, 1996.

The situation as at May 31, 1996 was as follows: capacity utilisation was almost nil, with the Chishango Road plant being the only operational facility; and staff numbers had been reduced to 11 from the original 31 in 1993 to correspond with the loss of business.

Swan Dry Cleaners Limited presented a business plan that was consistent with the privatisation objectives of Cleanwell Dry Cleaners, which included:

the avoidance of liquidation, by transferring of Cleanwell Dry Cleaners to the private sector as a going concern;
the prevention of further job losses;
and the injection of new capital into Cleanwell Dry Cleaners' operations.

Prominent features of the purchaser's plans include:

the reinstallation of the additional Neil & Spencer cleaning machine at the Chishango Road operations;
the reactivation of Cleanwell Dry Cleaners' Kitwe premises;
and the expansion of operations to cover laundry, carpet cleaning and other specialised cleaning services.

The requirements of transparency necessitated the review of the sales agreement by the Attorney General in his capacity as the Government's Chief Legal Advisor. Completing the list of bidders were Cleanwell Dry Cleaners Management Buyout Team and Kabulonga Supermarket Limited.

Undoubtedly, this sale is a demonstration of the continued wide participation of Zambians in one of Africa's most extensive privatisation programmes. Indeed, the cultural changes associated with the enhanced involvement of the private sector will lay the foundations for sustainable long term economic growth.

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