Battle to mend a frayed sector run ragged by imports
SA is fighting to revive its frayed clothing industry, once a crucial provider of jobs in a country suffering from high unemployment, as a flood of cheap imports forces local factories to lay off workers.
Once the economic lifeblood of many small regional towns, the abundance of cheaper products from China has led to the loss of nearly two-thirds of the sector’s jobs over the past two decades.
“After being employed for 22 years, we were informed that the factory would close down in eight weeks,” says Vimla Padayachee, 46, who lost her job three years ago.
The clothing factory in Verulam, north of Durban, shut down after years of battling low demand for its products.
“A person of my age is not likely to get another job again, and so are my colleagues,” Padayachee says.
The former seamstress is one of thousands of clothing sector workers who have been made redundant, in a country where official unemployment is nearly 30%. The dire situation forced the government to intervene, while business has called for a radical policy overhaul to stem the crisis.
At a bustling factory in Maitland, Cape Town, workers are bowed in front of rows of whirring sewing machines, stitching at a brisk pace to fulfil daily orders from a local chain store.
It is one of the producers benefiting from government grants and loans designed to help companies recapitalise their operations.
“We’ve had a very rocky ride, and we have lost ground to the rest of the world,” says Christopher Kinross, who runs a clothing company that bears his name and employs 253 people. “The industry is stagnant at the moment.”
Kinross, who has been in the industry for more than 50 years, says the government’s scheme has brought “some stability”. But he stresses that more has to be done to promote competition and create jobs.
“There is no doubt that there is a will to help the industry ... but the problems go beyond the influx of imports,” he says.
One of the main challenges facing the industry is a tax on importing raw materials essential for manufacturers.
“We pay 22% duty on imported fabrics ... if they remove that duty, our businesses could grow in a spectacular fashion,” Kinross says.
“The industry has an amazing potential to create jobs, but that is not happening.”
Years of talks to remove the duty have been unsuccessful and there are no quotas on clothing imports.
SA’s textiles and clothing sector contributes 3.3% to the nation’s overall economic output — and is heavily reliant on domestic consumption.
Foreign investment in apparel has repeatedly bypassed SA and instead gone to Lesotho, Swaziland and Madagascar, among other African nations.
“We pay wage levels that are relatively high for clothing manufacturing countries,” says Kinross. As much as 45% of sector income is spent on labour costs, he adds.
Only textile businesses that agree to pay a minimum wage set by the government qualify for official assistance.
The support for the industry has been running for six years, involving 505 beneficiaries and distribution of R5.3bn.
“Whatever is needed to be done to protect the industry, it must be done,” says Trade and Industry Minister Rob Davies.
“But it should be in the interest of industry development and to improve the local supplier base.”
The arrival of international “fast fashion” brands such as H&M and Zara opened another front in the battle being fought by South African clothing manufacturers. Fast fashion retailers, which largely source their products from outside SA, have aggressively expanded in the country in recent years — denting sales of locally made garments.
In November, the Southern
WE’VE HAD A VERY ROCKY RIDE AND WE HAVE LOST GROUND. THE INDUSTRY IS STAGNANT AT THE MOMENT
African Clothing and Textile Workers Union staged protests outside malls across the country to put pressure on retailers to buy locally.
“These foreign retailers cause fewer orders in South African factories which contributes to local [redundancies] and factory closures,” the union said.
Despite the challenges facing the sector, the green shoots of recovery are starting to be seen.
“In almost 15 years, we have probably lost somewhere between around 160,000 to 170,000 jobs, but from around 2011 [job losses] began to taper off — and within the last 18 months, we have seen it pick up,” says Simon Appel, an industry researcher.
“A decline in retail sales is causing a devastation in the local industry,” he says, adding that boosting exports would be vital to turning around the situation. “Our industry is struggling to break back into the export market.”