The document proposes revitalizing MACOHA's Bangwe Factory in Malawi to increase production capacity and provide employment. Key points: - The factory currently operates at 40% capacity with outdated equipment and needs restructuring and new machinery to increase output. - A proposed restructuring involves modernizing production departments, recruiting staff, and training existing employees. - The goal is to increase the factory's production value and export sales while providing jobs for people with disabilities. Estimated costs for new equipment and renovations are provided. - Objectives include boosting annual production value from $6,000 to $98,000 and increasing employment opportunities through skills training.

1. 1.0 Overview:
Government of Malawi
Investment Proposal
for the
Revitalization of MACOHA’s Factory at Bangwe
Ministry of Gender, Children, Disability and Social Welfare,
Private Bag 330,
Capital City,
Lilongwe3
August, 2014

2. 2
Background to the Proposal/Situation Analysis
Bangwe factory is a manufacturing unit of Malawi Council for the Handicapped (MACOHA) established in
1975 to provide on job training and serve as a source of income for persons with disabilities and serve
as a model to change the attitudes among the local industries. The Factory is a sheltered employment
unit which has enjoyed government protection for many years.
The Factory was designed to operate on commercial basis in order to generate profits which could be
used for MACOHA’s other rehabilitation programs and service the community of persons with
disabilities.
Bangwe factory is located outside Limbe in Blantyre, Malawi and employs approximately 100 persons.
Hearing, visual and speech impaired, albinism and physically challenged persons constitute 80% of its
employees. The factory has four departments – weaving, tailoring, tie-dye and screen printing. It
produces hand woven table and kitchen ware, carpets and rugs, handcraft/gift items, tie-dye &
embroidered clothing, school/industrial clothing and promotional material.
The land, buildings and machinery at Bangwe factory are fully owned by MACOHA. The machinery and
equipment is basic and labour intensive and in most cases inadequately maintained. Salaries of the
employees are sub-vented by the government. All other operational costs are funded through sales
revenue.
Textile industry has high potential in Malawi for both the local and export markets and as such, the
weaving sub-sector presents enormous employment opportunities. However, the production growth
potential is hampered by out-dated and inappropriate technology, limited skilled personnel, limited
production capacity, and industry inefficiencies.
The proposed revitalisation of the Bangwe factory project will increase production by addressing
challenges in the production department. Bangwe factory currently markets its products mainly in the
domestic market. The sales turnover in all departments in 2010/11 fiscal year was K 15,536,3031
and
increased by over 100% in 2012/13 to a value of K 26,854,078 before tax. This feat was achieved due the
adoption of a more market oriented approach.
1
The Actual Sales value for 2010/2011 was K13,335,882 after tax

3. 3
Figure 1: SalesValues in Norminal and Real Terms.
The figure above demonstrates that despite the potential that the factory has, growth is being stifled by
obsolete equipment and other related bottlenecks. From 2007 the factory has not experienced growth
and the situation was worse in 2010 when sales in real terms slumped. Although there was a pick in
2012/13 this was not sustained because the factory could not meet the demand (orders) due to the
breaking down of most machines in the Tailoring Section. There were only 2 sewing machines working
and 5 were brocken down. In the Tie and Die Section 3 machines were working and 2 were brocken
down.

4. 4
Problem Statement
Bangwe factory has severe liquidation challenges (cash flow shrinkage) mainly due to:
i. Inefficiencies in the production department resulting from obsolete equipment,
lower staff skills levels and scarcity of raw materials.
ii. Unjustifiable overhead costs against the current production efficiency of the
factory.
iii. Failure to compete favourably in the market with the support of a higher proportion
of approximately 80% labour force comprising persons with disabilities.
Proposed Solutions
Repairing and acquisition of new looms, employment of new staff is a key driver for increased
production and exports; together with increased productivity, niche marketing and value addition
(weaving). Increased production will act as a stimulus to close the gap between production and
demand. It will generate additional income for MACOHA to use for its rehabilitation programmes and
will complement the National Export Strategy that is currently being developed by the Malawi
Government. This will also contribute to other efforts by the Malawi Government towards achieving
objectives set out in the Malawi Growth and Development Strategy, as well as attainment of the Post
2015 Development Agenda. Among the solutions being proposed, there is therefore need to:
i. Restructure the Factory to compete favourably in the open market;
ii. Invest in new equipment to replace the obsolete ones: Modernise with automated
machines to graduate from the old hand looms. The Section should by acquire
modern spinning wheels, cloth shredders, and dust cleaners; and
iii. Inject fresh working capital for acquisition of raw materials in the export orders
unit. Imported raw materials should include dyes, hydros, caustic soda, drills, swiss
cotton, embroidery threads, sewing threads. Main suppliers from South Africa and
India.
Project Goal
The goal of this project is to contribute to economic empowerment of the disabled persons in Malawi
through the commercialization of the Production Department of Bangwe Factory. The ultimate aim of
the project is: “Increasing Productivity to Promote Exports”.

5. 5
Project Objectives
The project objective is to revitalise the Bangwe factory to increase the production capacity from 40% to
80%.
Proposed Restructuring of the Bangwe Factory
The proposed intervention is designed against the backdrop of a need for a market-oriented development
approach in order to increase production, create employment opportunities and alleviate poverty. The
project seeks to establish, strengthen and institutionalize the production, processing and export marketing
of the production Department.
There is need to restructure the factory into Production & Merchandising, and Finance &
Administration Departments. Annex I.
Annex I: Proposed Organizational Structure for Bangwe Factory
General Administration
There should be a separate panel of directors with business administration background
who will report to the main board.
Under MACOHA senior management, the Director of Commercial Services should be
recruited, who should be reporting to the panel of directors that would be monitoring the
Bangwe Factory operation.
Production and Merchandising Department
It is being proposed that the department should consist of the following officers and
positions:
OFFICERS QUANTITY
Manager-Merchandising
Production Manager
Tailoring Supervisors
(Corporate & Local orders)
1
Weaving Supervisor
(Corporate & Local orders)
1
Screen Printing Supervisor 1
Assistant Merchandiser
Procurement Officer 1
Raw Material Stores Clerk 1
Warehouse Clerk 1
Showroom Clerk 2

6. 6
Work Floor
Corporate Sector orders and Local Customer orders should be handled in separate work
floors
Work Force:
The work force should be the composition of persons with disabilities and able bodied
personnel. The factory staff should be located within 5 km perimeter distance from the
factory.
Disability Personnel Able Bodied Personnel
No severely persons with disability personnel will
be employed
The able bodied persons or persons from
families of persons with disabilities
Note: Able bodied personnel will be occupied in higher proportion on export orders as
well as corporate customer orders. And most of the supervisors and other management
staffs should be able bodied.
Production Unit
The production unit to consist of the Weaving Section, the Tie & Die Section, the Screen
Printing Section and the Tailoring Section.
The Weaving Section
Maintain production of hand woven in form of rugs, hammocks, bathmats, wall hangings,
shopping bags, coasters, hand bags, etc. In order to improve the current scenario where
this Section continue fail to meet customer demands or orders, the Section should have
two separate Units, thus Export and Corporate sectors.
Proposed Combination in the Export Sector
Qty Specification Able bodies With Disability
1 Graduate Supervisor 1 0
10 Weavers 8 2
2 Loom Dresser 1 1
2 Finishers 1 1
Total 11 4

7. 7
Proposed Combination for the Corporate Sector
Qty Specification Able bodies With Disability
1 Graduate Supervisor 1 0
5 Weavers 1 4
1 Loom Dresser 1 0
1 Finishers 0 1
Total 3 5
Proposed Combination for the Tie and Dye Section
Qty Specification Able bodies With Disability With or Without
Disability
1 Dye Master 1 0 0
1 Dye House Assistant 1 0 0
1 Tie-Dye Fabric Designer 0 0 1
Total 2 0 1
Proposed Combination for the Spinning Section
Qty Specification Able bodies With Disability With or Without
Disability
3 Spinners 0 0 3
1 Cone Winder 0 0 1
1 Skein Winder 0 0 1
Total 0 0 5
Proposed Combination for the Screen Printing Section
Qty Specification Able bodies With
Disability
With or
Without
Disability
1 Artist 0 0 1
2 Printers 1 1 0
2 Curers 1 1 0
Total 2 2 1

8. 8
Tailoring unit:
Proposed Corporate Section
Qty Specification Able bodies With
Disability
1 Graduate Supervisor 1 0
10 Multi-skilled Tailors 6 4
2 Sewing Line Helpers 1 1
2 Finishers for Ironing 1 1
Total 9 6
Proposed Local Customer Orders section
Qty Specification Able bodies With
Disability
With or
Without
Disability
1 Graduate Supervisor 1 0 0
05 Multi-Skilled Tailors 2 3 0
1 Sewing Line Helpers 0 0 1
1 Finishers for Ironing 1 0 0
Total 4 3 1
Proposed Cutting section:
Qty Specification Able bodies With
Disability
With or
Without
Disability
1 Fabric Cutter 1 0 0
1 Assistant of Fabric Cutting 0 0 1
Total 1 0 1

9. 9
Finance and Administration Department
Proposed Finance Unit
Qty Specification Able bodies With
Disability
With or
Without
Disability
1 Graduate Accountant 0 0 1
1 Assistant Management
Accountant
0 0 1
1 Senior Accounts Assistant 0 0 1
1 Accounts Assistant 0 0 1
Total 0 0 4
Proposed Administrative Unit
Qty Specification Able bodies With
Disability
With or
Without
Disability
1 Assistant Human Resource
Officer
0 0 1
1 Administrative assistant 0 0 1
1 Secretary 0 0 1
1 Switchboard
Operator/Receptionist
0 0 1
2 Motor Vehicle Driver 2 0 0
1 Messenger 1 0 0
12 Security Guards 12 0 0
Total 15 0 4

10. 10
Estimated Inventory and other requirements for Bangwe Factory
Activity
Total
(MWK)
Total
(USD)
Factory’s General Purpose
Overhead Water Tank plus Water Pump 3,000,000 8,825
Electric Generator 2,000,000 5,885
Remodeling an existing structure to be used as an
additional dye house
600,000 882
Remodeling and existing structure to be used as an
additional warehouse
700,000 882
Weaving Section
Servicing 16 existing looms @ K 20,000 3,200,000 9,412
Rehabilitation of 4 existing looms @ K 20,000 80,000 235
Making 64 new looms @ K 400,000 6,400,000 18,824
Repairing 01 existing dye pot 700,000 2,060
Procuring 01 new dye pot 2,600,000 7,648
Spinning Wheels – 10 Manual Machines 800,000 2,335
Spinning Wheels – 04 Automated Machines 2,000,000 5,885
Cloth Shredder – 02 2,520,000 7,412
Dust Cleaner – 01 large
- 06 small
5,000,000
9,000,000
14,706
26,500
Electronic Weighing Scale - 01 Dye House 120,000 353
Industrial Thermometer – 01 Dye House 100,000 300
pH Indicator – 01 Dye House 150,000 445
Tailoring & Embroidery Section
Heavy Duty Over-Locking Machine – 01 Tailoring 5,000,000 14,710
Heavy Duty Straight Sewing Machines – 08 Tailoring 12,000,000 35,300
Button Trach Machines – 01 Tailoring 2,700,000 7,950
Button Hole Machine – 02 Tailoring 3,600,000 10,590
Hemming Machine – 02 Tailoring 3,600,000 10,590
Heavy Duty Irons – 03 Tailoring 3,000,000 8,825
Straight Heavy Duty Machines – 08 Tie/Dye 12,000,000 35,300
Embroidery Machines – 05 Tie/Dye 7,500,000 22,060
Heavy Duty Irons – 03 Tie/Dye 3,000,000 8,825

11. 11
Heat Presser – 01 2,400,000 7,060
Refrigerator – 01 600,000 1,765
Get Spray Gun – 01 1,300,000 3,830
Vinyl Printer and Cutter – 01 9,000,000 26,500
Computer and Accessories – 01 500,000 1,470
Irons – 02 90,000 265
Printing Table – 02 200,000 590
Administration Department
Training for production workers:
Trainers Allowance – 02 trainers @ K 30,000 pm 90,000 265
Materials for Training – 100 kg 7/15 natural yarn 185,000 545
- Fabric 1000 mt @ K 500 500,000 1,471
- Stationery 50,000 148
- Dyes and chemicals 50,000 148
Allowances for Participants – 70 weavers, 04 loom
dressers, 02 dyers for 6 weeks @ K 18,000 pm
2,052,000 6,035
Equipments:
02 computers 1,000,000 2,940
Total 112,237,000 330,109

12. 12
LOGFRAME MATRIX
Project Description Objectively Verifiable
Indicators (OVIs)
Sources of
Verification
(SOV)
Assumptions and
Preconditions
1
Overall Objectives
 To increase production capacity
of weaving department of
Bangwe factory
Percentage increase in
production capacity
Factory
production
records  Political will
 There will be no
donor fatigue
2 Specific Objectives
1. To increase production output
value from MK6 million to MK
98 million per annum
Percentage increase in
production output value
Factory
production
records
Investors and government
support production activities
2. To provide employment
opportunities and support
workers with technical skills
Number of employees
trained and supported with
technical skills
Training report Availability of training
resources

13. 13
3 Intermediate Results
1. Bangwe Factory accessing
export markets
Amount of profits realized
from export markets
Records of sales
from each month
Availability of
international markets
2. Bangwe access to additional
weaving looms
Number of additional weaving
looms accessed
Records of repaired
and acquired looms
Availability of
resources and investors
3. Bangwe has access to raw
materials
Amount of raw materials
purchased
Records of raw
materials purchased
Availability of raw
materials
4. 80 workers practice good
management practices
Number of workers practicing
good management practices
Monthly assessment
reports
Management training
in place
5. Average production value
increases to MK 8 million per
month
Percentage increase in
production value
Factory production
records
Good management
practices
6. Quality of production improved Percentage of production
quality improved
Sample results from
buyers
Good management
practices
7. 80 workers trained and have
access to weaving looms
Number of workers trained
and have access to weaving
loans
Training report Availability of resource
and infrastructure
8. 80 workers have opportunity for
employment
Number of workers having
opportunity for employment
Monthly Pay slips Existence of Vacant
posts

14. 14
4 Activities
1. Production of oven gloves,
carpets
Number of oven gloves,
carpets produced
Factory production
records
Availability of
resources and raw
materials
2. Servicing & rehabilitation of
existing looms
Number of existing looms
serviced and rehabilitated
Maintenance report Availability of
resources and well
wishers
3. Procurement of computers &
training materials
Number of computers and
training materials procured
Delivery notes Availability of
resources
4. Acquire new looms and dye
pot
Number of new looms and
dye pot procured
Delivery notes Availability of
resources
5. Recruit & train new
employees
Number of employees
recruited and trained
Recruitment and training
report
Vacant posts and
training resources
available
6. Re-model new dye house and
ware house
7. Import fabric off-cuts from
South Africa
Number of new dye house
and ware house re-modeled
Amount of fabric off-cuts
imported
Re-modeled dye house
and ware house in place
Delivery notes
Availability of
resources
Availability of forex
8. Bulk Production – new
product line
New machinery in place Factory production
records
Availability of investors