Revival ‘not built on cheap labour’
● SA will not base the revival of its clothing, textiles and footwear industry on the cheap labour principles that much of the world’s bustling textiles industry thrive on.
“We are not going to be able to develop an industry that pays the lowest wages in the world,” trade and industry minister Ebrahim Patel said this week.
A master plan for the industry is expected to be released next month.
Patel said on Friday SA needed to “compensate for the fact that we have in some areas higher costs with greater levels of flexibility and competitiveness”. He said this meant investing in the right factory layout, work practices and skills development.
Logistics management, which focuses on speed of processing garments and distributing these to warehouses and stores countrywide, is key. “Logistics becomes a competitive advantage for South African industry.”
Growth in the textile value chain was in two areas. There were significant levels of illegal imports coming into the country. Although SA had a nominal tariff rate that applied to imports, “the effective rate that is ultimately levelled on fabric is significantly lower because of under-invoicing and misclassification of goods by importers, and this has eroded domestic market share”, he said.
This made it difficult for ethical manufacturers or retailers to operate and compete effectively, Patel said.
“A big part of what the master plan will focus on is the practical steps to turn this around, to reclaim integrity and effectiveness in our trade regime so that we are able to apply the rates and provide domestic inBy dustry with a degree of support.” This would shift the industry from one in “serious and terminal decline” 10 to 15 years ago to high growth. Over the past nine years, the sector had been stable but had not grown.
The Apparel & Textile Association of SA did not respond to requests for comment.
Earlier this week, Patel also met with the poultry, automotive, steel and sugar industries, which are also developing master plans in collaboration with the government.
For “the first time we see evidence of cooperation across the value chain, rather than a blame mentality where each points a finger to the other. That is critical,” Patel said.
A large part of the talks with industries was to refine the expectation of what the state can do and what industry requires from the government, but also to put a “significant emphasis” on what industry and labour must contribute to a competitiveness plan.
Izaak Breitenbach, GM of the Broiler Organisation division of the South African Poultry Association, said a master plan for the poultry sector focused on, among other things, developing local consumption and targeting markets in the rest of Africa, as well as targeting reciprocal trade with the EU and access to the United Arab Emirates.
The poultry sector, which has cut thousands of jobs due to cheap chicken imports, has applied for a tariff increase on certain imports. This is despite Patel’s reluctance for tariff hikes.
The sugar industry is also under pressure due to cheap imports and has been hurt by the sugar tax, which has curbed demand from beverage manufacturers.
South African Sugar Association executive director Trix Trikam said after a meeting with Patel and agriculture minister Thoko Didiza: “We expect to have good direction for the future from these interactions.”
Logistics becomes a competitive advantage Ebrahim Patel Minister of trade and industry