South Africa

More than 20 000 jobs have been created in the past five years since the clothing, textile, footwear and leather (CTFL) industry’s masterplan was launched.

This was reported to the Minister of Trade, Industry and Competition Ebrahim Patel by stakeholders at a meeting in Cape Town on Thursday.

Major retailers have sourced 371 million more units of clothing items from local manufacturers over the same period, a 51% increase on the baseline of units bought locally. The volume of clothing imported from China has dropped in major clothing categories, and the value of the clothing imported increased, showing success in the fight against under-invoicing.

According to a statement by the department, these figures were released at a meeting at the Prestige Clothing factory, owned and operated by South African retailer, TFG, as part of a report back to CEOs of large retailers and manufacturers, as well as leaders from labour and government.

“Over this period, we've been able to take an industry which had been decimated by imports and low investment, and stabilise it through the collaboration and partnership which the masterplan has provided,” Trade, Industry, and Competition Minister Ebrahim Patel said at a media briefing after the meeting.  

“These efforts have built a platform which has led, in just a short time, to increased local procurement; increased manufacturing employment; and better administration of imports at the country’s ports of entry,” Patel said.

The masterplan was developed with the consensus of stakeholders in the sector and included undertakings in place by retailers to increase their procurement of locally manufactured CTFL products.

In return, manufacturers in the sector committed to increasing investment in productive capacity and technology, while building manufacturing ecosystems to advance transformation and inclusion, and advance worker empowerment.

Workers in the sector committed to efforts to strengthen the industry and promote the Buy South African campaign in communities.

Government meanwhile committed to an upgrade of customs enforcement to stem illegal imports, a competitiveness enhancement incentive program and implementation of appropriate CTFL tariffs and rebates.

“The decrease in imported volumes, accompanied by increasing declared values is great news for the industry and jobs. It means that we are making progress to levels where imported clothing and footwear are being declared at their fair prices.

“The industry has faced systematic import fraud through under-invoicing of garments and their illegal import. This has the effect of unfairly pricing imports below their market value and depriving the fiscus of revenue for healthcare, education and crime-prevention.

“The support of the South African Revenue Service has been important and valuable,” the Minister said.

The department has provided R2.5 billion to the industry through the Clothing, Textiles, Footwear, and Leather Growth Program (CTFLGP) to improve its competitiveness and productivity.

In addition, R4.4 billion in loan capital has been provided by the Industrial Development Corporation to help increase productivity and meet increasing local demand.

“The last five years of collaboration and partnership have been immensely successful. The industry was on its knees, with many suggesting it was in terminal decline. However, since the masterplan was implemented, we’ve seen an increase in investment, and today the industry is revitalised, employing more people than it did when we started this journey,” said the CEO of TFG, Anthony Thunstrom, at the same media briefing.

“Investment and training have meant that we can manufacture as efficiently in South Africa as anywhere else in the world. We generate our best profitability on South African-made products. Local manufacturing has had a real positive impact on the performance of our business,” he said.

Herman Pillay, CEO of the TCI Apparel Group, said: “We’ve seen a huge improvement in manufacturing since 2019. We’ve seen the establishment of new companies, many of them black-owned. We’ve had good support from the retailers, but at the same time, we see increasing opportunities as we improve these channels of collaboration.

“The collaboration we’ve seen under the Masterplan in the CTFL sector is a real case study of what can be achieved when stakeholders come together.”

Speaking on behalf of workers, Susan Khumalo, President of the Southern African Clothing and Textiles Workers Union (SACTWU), said: “The masterplan came at an important time, after years of significant challenges for the industry. With the inception of masterplan, we have seen positive change in the industry. It’s only been five years, and we hope with the way forward to can see more growth and more jobs for workers.”

“One of the things we should not neglect is the power of social dialogue. The masterplan has provided a platform where problems can be collectively solved through the energy and creativity of all stakeholders, ultimately to grow employment and manufacturing output,” said Etienne Vlok, union researcher.

Ashley Benjamin, General Secretary of the National Union of Leather and Allied Workers (NULAW), said: “We are seeing a number of success stories in the footwear manufacturing industry. A number of companies are now producing high-end leather footwear for the export market, including the United States.”

Minister Patel emphasised that the industry in 1994 is vastly different from that of today.

“The CTFL industry was very inwardly focused and relied heavily on high tariffs and very low wages. Immediately following the introduction of democracy in South Africa, we were faced with two compounding challenges, namely the reduction of tariffs agreed to by the previous regime before the end of apartheid, and the impact of China entering the global market. Many countries around the world lost their clothing industries.

“In the past 15 years, while there were significant job losses, South Africa managed to hang on to part of its industry.

“By 2009, the industry made its first attempt at a restructuring, with new trade measures and a competitiveness programme that followed, and with a better collaborative response, which was finally formalised with the signing of the masterplan in 2019.

“Looking forward, we have identified a number of things we can do to take advantage of the emerging opportunities which the masterplan brings. We need to consolidate and deepen the partnership, and improve the collaboration across the value chain from textiles to garment manufacture to retailers and workers.

First, we need to strengthen footwear production in South Africa. Second, we want to identify additional products for localization in clothing. Third, there needs to be greater visibility of South African-made products in retail stores and to address the challenge of certain non-South African online platforms that uses tariff loopholes.

“Finally, there is an opportunity to tell the transformation storyline better. We have a large number of black industrialists operating in the space,” he said.

Michael Lawrence, Executive Director of the National Clothing Retail Federation (NCRF) said: “The masterplan is also being used as a platform for sustainability and the greening of the industry. The masterplan is not just solving the problems of yesterday, but addressing the problems of tomorrow as well.”

The CTFL sector now employs more than 500 000 South Africans, including 250 000 manufacturing jobs and more than 280 000 retail jobs. – SAnews.gov.za

 

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