1 of 2016

 Newsletter No. 1   29 January 2016

This is your first newsletter, remember this is your newsletter so please share your newsworthy information with us.
I look forward to getting your news so that it can be shared with all our readers.

I thought we should start our newsletter with a positive story for 2016 and with permission from Business Day an interesting read……..

Clothing and textile industry shakes off cobwebs

The Southern African Clothing and Textile Workers’ Union (Sactwu) says the clothing, textile, footwear and leather manufacturing industry is entering a period of greater stability and higher levels of growth.

The clothing, textile, footwear and leather manufacturing sector is a key employment driver especially in the Western Cape and KwaZulu-Natal, where most factories are located.

The Statistics SA Quarterly Employment Survey released in December shows that in the year to September employment in the sector increased 1.8%. This came after high levels of job losses had decimated the sector for more than two decades when at least 50,000 jobs were lost.

The government’s Industrial Policy Action Plan has identified the sector as “high priority” because of its labourintensive character.

In many developing countries, the sector has provided the early impetus for industrialisation, economic growth and job creation.

But in the last decade the sector has been hit hard by imports from China and other Asian countries.

Sactwu general secretary Andre Kriel said that employment over the past year had been driven by growth in the clothing sector (676 new jobs), textile sector (1,197 new jobs) and the leather sector (268 new jobs). Kriel said these figures compared favourably to the declining fortunes of the manufacturing sector as a whole, in which employment decreased 0.3% over the same period.

“This reinforces Sactwu’s opinion that the (clothing, textile, footwear and leather) manufacturing industry is entering a new period of greater stability, and hopefully higher levels of growth,” Kriel said.

Much of this positive turn in employment was attributed to strong support for the industry from the government since 2009, coupled with the union’s Save Jobs campaign.

“Significantly, this is the second consecutive quarter that employment in our industry has grown, following the 3% increase recorded in the previous quarter,”said Kriel.

Johann Baard, executive director of the Cape Clothing Association, representing clothing and textile and manufacturers, echoed Kriel’s sentiments. He said the sector had stabilised because government support measures had led to greater competitiveness and improved productivity due mainly to the installation of new plant, equipment and machinery.

The exchange rate had served as a growing disincentive for retailers to source off shore, Baard said.

They continued to experience cost pressure in the mass-produced commodity clothing sector, “which is where the real potential for massive job creation lies. Here we still experience huge influx of cheap imports from locations such as China, Vietnam, Madagascar, Lesotho and Swaziland,” Baard said.

The survival of compliant factories who pay the bargaining council wage rates was increasingly being threatened by an ever-growing number of noncompliant factories in the nonmetro rural locations of SA, “many of whom pay less than half the legal minimum wages”, said Mr Baard.

Figures show about 27,000 workers are employed in these noncompliant factories. “This is a major challenge to the future of the bargaining council and is something the parties to the council will need to address in order to secure the sustainability of compliant factories, particularly in the metro areas of Johannesburg, Cape Town and Durban.”

www.sourceafrica.co.za

Drought and its affect on cotton prices.

I was recently “trawling” through social media when I came across an article of a small Free state town known as Senekel. I recall stopping there last year in need of fuel and after fuelling up, decided to explore the little town for all of ten minutes. I remember thinking to myself how this pot-hole infested town, must have once been the ideal place to grow up in with its retro like buildings and beautifully manicured gardens. I empathized for this community as I read how the drought had recently enslaved the little town and its farming community. How their livestock had literally began to die of thirst. Living in a coastal city can make one immune to the plights of those in farming areas, as their woes really impact on ours. Or do they?

Since last year, Southern Africa has been ravaged by its worst drought in ages. With the textile industry relying on cotton and wool farming for raw material, I was wondering, what affect the drought has had on the industry in terms of pricing? We spoke to Hennie Bruwer (CEO of Cotton South Africa) and Kelvin Everts (Sales and Marketing Director of Da Gama Textiles.

 

Both confirmed that the local drought has to date had NO impact on cotton prices. This is primarily because local spinners have the option to purchase from throughout the SADAC region such as Tanzania, Malawi, Zambia and Zimbabwe.

 

The raw material of cotton is covered by an international dollar price, which is dictated by supply and demand. Manufacturers have options when phenomena such as droughts occur. They can even import from outside SADAC region should the drought worsen. The weakening rand would tend to have a far more impact on the price of things than the drought.

 

So where does this leave the farmers? The closer you are to the field or the raw material, the smaller the margins and the greater the impact from environmental conditions says Kelvin. The only counter measure for the dry land cotton farmer is to try and establish another (e.g. sunflower or beans), towards the second half of the summer growing season. There is currently no insurance product for dry land farmers to insure their input cost in case of drought say Mr. Bruwer.

 

Not a nice outlook for farmers.

Jeremy Marten

Fake branding on the increase says investigator

International brands invest in our country by issuing local licenses, which in return create employment in South Africa’s textile trade. Yet, in some dingy warehouse, a band of unscrupulous Elves work through the night. Whilst munching on rice cakes, they systematically unpick, document and replicate a genuine garment. Fortunately, those of us in the industry know far too well that Elves cannot sew properly as their little legs cannot reach the pedals. Their actions therefore produce a far inferior product, void of the quality. So why do people buy them?

These fakes usually appeal to two types of consumers:
Those who want to look hip but cannot afford the luxury of buying the original product and then those who are duped into believing that the bogus product is original.  Either way, the trade in fakes prejudice the lawful license holders and the consumer.

Ruan Meintjes, who is the director of Counterfeit Label Solutions (CLS), says counterfeiting comes and goes in waves. Ruan, who cut his teeth in the South African Police, runs a consulting detective agency that amongst other things, specializes in counter acting these criminals and their phony products. His major client holds the license for Quicksilver, Roxy, DC Shoes, Jeep, Lee Wrangler, Volcom, Fox Racing, O’Neil and The North Face.

“Although forgeries in general are on the up and up, the brand most likely to be forged will depend largely on how the original brand is making it on international markets at that time.”

Ruan has successfully prosecuted over 40 cases from start to finish through the Commercial Crimes Court. “Most counterfeits originate in the East and are a product of organized crime syndicates,” says Ruan, “more often than not, the products arrive in South Africa by ship and get past port authorities either by corruption or just by pure luck”.

“How do the authorities dispose of these items once the criminal trial is over?”  we asked.
“Recovered fakes were previously incinerated however that is no longer allowed, so now we cut the items up.”

When asked what was the largest recovery he made that needed to be cut?
“Two x 40 foot shipping containers” he replied.

I think witnessing that, would have brought a tear to many a teenager!

Jeremy Marten

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Did you know……

It is within the last 200 years that children have had their own distinct clothes. They used to just wear a smaller size of adult clothing.

Clothes that are dry cleaned last longer

The Fashion Indsutry is the 2nd largest user of water in the world.

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Carla Finlay

carla@newsbriefs.co.za

0724055930