Following the persistent delay in the take off of the N100 billion stimulus package for the textile industry, a major textile firm in the country – United Nigeria Textile Plc (UNTL) has hinted of the posibility of shutting down its operations, going by difficulties faced in its operations in the country as evident by its dismal financial performances over the years.

The company in its audited result for the year ended December 31, 2008, presented to the Nigerian Stock Exchange (NSE), last week, declared a loss after tax and exceptional income of N730.6 million compared with a loss of N1.73 billion in its 2007 financial year. Its turnover dipped by 34.12 per cent, from N18.55 billion in 2007 to N12.22 billion in the year under review.

In the report, the company, through its auditors informed the NSE that its going concern is under threat. According to the report by the NSE, “The Auditors without qualifying their opinion noted that the going concern of the company is under threat.”

Also, in its unaudited results for the first quarter ended, March 31, 2009, the company announced a turnover of N2.33 billion compared to N3.1 billion recorded in the comparable period of 2008, it posted a loss after tax of N514.9 million compared with a loss after tax of N213.55 million recorded in 2008.

If the company, which is the only textile company remaining on the NSE, goes ahead to shut down its activities, the Textile sub-sector of the NSE would likely be scrapped in addition to other economic problems that its closure might pose.

In recent times, of the six textile firms quoted on the first-tier securities segment of the NSE, four have been delisted – Enpee Plc, Asaba Textile Mills Plc, Aba Textile Mills Plc and Dangote-owned Nigerian Textile Mills Plc, while Afprint, applied for reclassification to the Agricultural/Agro-Allied sub-sector of the NSE, following its full diversion to agricultural production and stoppage of textile manufacturing activities.

Udeofson Garment Factory Plc is in the second tier segment of the NSE, and has been redundant, as it has not recorded a single transaction since April 14, 2000.

According to market analysts, the woes of the Nigerian textile industry, is as a result of the lack of commitment on the part of the Federal Government to address the numerous problems facing the sector, such as influx of cheap imports, absence of power supply, high operating costs and other unfriendly business climate.

The Federal Government, during the administration of Chief Olusegun Obasanjo, in an apparent effort to rescue the country’s ailing textile industry announced a N70 billion stimulus package to be disbursed to textile firms in the country, while Umaru Musa Yar’Adua-led government proposed a N100 billion stimulus package.

However, many months after, nothing has been heard of the fund, while a number of textile firms have closed down with many others contemplating towing similar line.According to experts, of the 175 textile firms operating in the country in the 1980s, over 150 have shut down, leaving only about 25 still in operations.