Newsletter No. 12 / 9 April 2021                           

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Manufacturing firm benefits from DTIC’s designation of laptop bags

By Tasneem Bulbulia

Tongaat-based manufacturing firm Protea Leather Natal has grown, diversified and become more efficient since its first application to the Department of Trade, Industry and Competition’s (DTIC’s) Production Incentive Programme (PIP) grants in 2011.

The company recently won the National Student Financial Aid Scheme (NSFAS) tender to supply laptop bags.

The company was established in 1988 by CEO Raj Singh in partnership with the Gidish family. Since then, the factory floor has been upgraded to include more than twenty machines, one digital printer and three embroidery machines. This enabled the company to diversify into other areas of manufacturing.

“Protea Leather Natal initially introduced the school range to Waltons. We have also worked extensively with Edcon CNA over the years. When both retailers started to import large quantities of school bags, we diversified into custom-designed bags for schools, with school logos and in the colours that the school requires.

“We diversified further into sport, concentrating on hockey, cricket and fishing. We have also managed to convince promotional houses to have their bags made locally for the local SAB brands,” said Protea Leather Natal director Desigan Ganesan.

Ganesan mentions that, with input from nurses and specialists, the company has also developed specialised bags for Lancet Labs and Ampath, and has also grown its market share in the food industry with the introduction of home delivery services.

Ganesan says the lockdown in 2020 forced all sectors to shut down, leaving the company with practically nothing to manufacture. This resulted in the company also having shut down completely for March, April and May 2020.

“We reopened in June and continued working with 50% of our staff, two to three days a week on a rotational basis. With food delivery services.

booming and the fishing industry open, we managed to secure enough work to keep 50% of staff working a full three days per week,” adds Ganesan.

He says the firm recently planned to go on short time once more. However, through the NSFAS tender to supply laptops bags, the company managed to keep operating.

“Thanks to the efforts of the DTIC, the laptop bags for NSFAS are being manufactured locally. Due to these efforts, we have not gone on short time but have instead hired ten more employees on a temporary contract, in addition to 61 permanent workers, to have these orders completed.

“The creation of employment has assisted ten more people that were affected by Covid. The income from this order has been a financial lifeline to the company,” he says.

Ganesan adds that the ripple effect of this order has spread through to local fabric mills,packaging suppliers, suppliers of fittings for bags and the transport sector.

He advises that government should consider higher import taxes on items that can be manufactured in the country. EN

Tito Mboweni’s incentives-lite policy on investments far too harsh a move

By Chris Hart

He may or may not be a cordon bleu chef. He is certainly one of the few SA politicians courageous enough to speak his mind. But it would be hard to accuse finance minister Tito Mboweni of oozing subtlety.

The best example of this — and the one which will do the most damage to small firms — came in his last budget, when he decided to come down hard on investment incentives.

Of course, there has been fraud, abuse, waste, inefficiency. This is SA, and these problems deeply infest our public spending. However, if the patient comes to you with a cough, even a Covid cough, you do not chop off his head and smirk at your own wondrous ability to resolve a challenging medical problem.

If your car is sent to a mechanic to trace and fix an annoying rattle, you do not expect to see it  sent to the scrap yard. No more rattle, but no more car either.

So why does the finance minister choose such an unsubtle, damaging and crude approach to incentive policy? You should cure rather than kill, repair rather than scrap, dispose of the bathwater but preserve the precious baby.

There are dozens of SA investment incentive schemes designed to encourage and reward companies that take the risk of building a new factory, of launching a new project, of adding another building block to the economy, of investing in research and development or going green.

Some of those support programmes that have escaped death row are underpinned by a strong political motive, such as the Black Industrialists Programme or the S12L energy efficiency incentive. These seem to be safe, for now. No problem there.

Then there are the sector-focused support schemes such as the auto masterplan, the one for poultry, and another for clothing, textiles and footwear.

The carmakers, chicken farmers and shoe producers are not being given the boot, even though a strong case could be made that these incentives are protectionist,  extremely expensive ways of creating and preserving jobs, and support just a few industrial sectors at the expense of all the others.

What has been stated in the latest budget is that while these favoured schemes will continue, others will be scrapped when they reach their expiry dates — and the overall spending cake will be shrunk.

Mboweni the master chef is opting for incentives lite. In some cases, the baby will now be sucked kicking and screaming down the plughole along with the bathwater.

Most of the backlash coming from the investment community against the new butcher’s budget is focused on a venture capital incentive called Section 12J (S12J).

This is used to support start-ups, recapitalisations and rescues of SMEs. Firms are able to stay in business, boost or retain employment, grow, be given a future. For a few more months, that is, as it is soon due to end.

If reform is needed then let us rather reform, not wreck. Already, projects involving alcohol and tobacco do not qualify for S12J support. Add others to this list, if appropriate. But spare the deserving infants, the ones that have the potential to grow up to be fine companies.

Surely it is unfair and illogical for the Treasury to opine about how an incentive scheme has not fully fulfilled their vision when that vision has not been fully articulated? It would have been more helpful if the actual vision was expressed at the launch rather than reflected on in hindsight.

SMEs are notoriously starved of capital and yet they are the engine of effective job creation. Section 12J has allowed entrepreneurs to raise capital where there aren’t the normal barriers to access — such as the need for collateral, a credit record and track record. This makes S12J a unique asset class that transcends race and class for budding entrepreneurs.

S12J has potentially been most effective in mobilising private sector capital to fund broad-based BEE entrepreneurs and has been well established as an alternative asset class and an alternate channel to place an investment.

The hatchet option is of no help to anyone. There are zero credible economic textbooks that recommend scorched earth. There is not much time for it to happen, but our finance minister needs to listen to the growing chorus of investment professionals who are telling him that he has been too harsh, too hasty. To think again. This is one post-budget tip for Tito that Tito would be ill-advised to ignore.  Business Day 

• Hart is executive chair of Impact Investment Management.

SA’s Lukhanyo Mdingi nabs spot on 2021 LVMH Prize shortlist

Cape Town-based Lukhanyo Mdingi is among the 20 fashion designers from around the globe selected as semi-finalists for the 2021 LVMH Prize for Young Fashion Designers. The global competition is now in its eighth year, having been launched by luxury fashion conglomerate LVMH in 2013 to support and honour young design talent.

South Africa has been well-represented in the competition previously, with local designer Thebe Magugu winning the 2019 LVMH Prize – the first African to do so. This year, local womenswear and menswear designer Mdingi is in the running for the top spot, alongside fellow African designer Adeju Thompson, who’s behind the Nigerian fashion brand Lagos Space Programme.

SA’s Mdingi scooped the Innovative Design and Materials Award at the local Twyg Sustainable Fashion Awards in 2019, recognising the designer’s innovative use of sustainable textiles and clever garment construction.

Prizes and judging process

The winner of the LVMH Prize for Young Fashion Designers receives a €300,000 endowment and benefits from a one-year bespoke mentorship programme provided by a dedicated LVMH team. The Karl Lagerfeld/Special Jury Prize rewards a young designer with €150,000 and a mentorship programme.

In addition, the Prize distinguishes three young fashion-school graduates who have completed their studies in 2020 or 2021 by allocating them, as well as their school, a €10,000 grant. The prize-winning graduates will join the creative studio of an LVMH Group House for one year.

This year’s edition attracted over 1,900 candidates worldwide, with 20 young brands and their designers selected for the semi-final.

These semi-finalists come from South Africa, China, France, Italy, Japan, Lebanon, Nigeria, South Korea, the United Kingdom, the United States, and, for the first time, from Albania and Colombia.

This year, as a result of the restrictions imposed by the pandemic, the LVMH Prize has set up a digital platform.

From 6 April to 11 April 2021, the 20 semi-finalists competing this year for the final of the LVMH Prize will be showcased on the dedicated website lvmhprize.com, featuring their collections, their creative world and their personalities.

The 2021 edition will also allow the public to discover the semi-finalists and to vote for their favourite candidate.

20 brands selected for semi-final

• AGR, a British womenswear brand based in the United Kingdom, designed by Alicia Robinson, 30

• Bianca Saunders, a British menswear brand based in the United Kingdom, designed by Bianca Saunders, 28

• Charles de Vilmorin, a French genderless brand based in France, designed by Charles de Vilmorin, 25

• Christopher John Rogers, an American womenswear brand based in the United States, designed by Christopher John Rogers, 28

• Conner Ives, an American womenswear brand based in the United Kingdom, designed by Conner Ives, 25

• Federico Cina, an Italian genderless brand based in Italy, designed by Frederico Cina, 27

• KidSuper, an American menswear brand based in the United States, designed by Colm Dillane, 30

• Kika Vargas, a Columbian womenswear brand based in Columbia, designed by Kika Vargas, 38

• Lagos Space Programme, a Nigerian genderless brand based in Nigeria, designed by Adeju Thompson, 30

• Lukhanyo Mdingi, a South African womenswear and menswear brand based in South Africa, designed by Lukhanyo Mdingi, 29

• Midorikawa Official, a Japanese genderless brand based in Japan, designed by Tadu Midorikawa, 39

• Nensi Dojaka, an Albanian womenswear brand based in the United Kingdom, designed by Nensi Dojaka, 28

• Post Archive Faction, a Korean menswear brand based in South Korea, designed by Dongjoon Lim, 29

• Renaissance Renaissance, a Lebanese womenswear brand based in Lebanon and France, designed by Cynthia Mehrej, 32

• Rier, an Italian genderless brand based in France, designed by Andreas Steiner, 36

• Rui, a Chinese genderless brand based in China, designed by Rui Zhou, 27

• Saul Nash, a British menswear brand based in the United Kingdom, designed by Saul Nash, 31

• Shuting Qiu, a Chinese womenswear brand based in China, designed by Shuting Qiu, 27

• Taakk, a Japanese menswear brand based in Japan, designed by Takuya Morikawa, 39

• Wed, a British womenswear brand based in the United Kingdom, designed by Amy Trinh and Evan Phillips, both 30AGR, a British womenswear brand based in the United Kingdom, designed by Alicia Robinson, 30

Responsible approach to creative vision

Delphine Arnault from LVMH commented, “I am very grateful to all the candidates from more than 110 countries for taking part in this year’s competition and I would like to congratulate the semi-finalists. This semi-final will be entirely digital, and we wanted to open it to the greatest number of people: for the first time, the LVMH Prize will give the public the opportunity to discover the twenty semi-finalists on the lvmhprize.com website and to vote for the candidate of their choice.

“All the semi-finalists have incorporated a responsible stance in their creative vision: use of innovative or traditional materials, upcycling, recycled fibres, artisanal and local approaches. These initiatives echo the shift in the fashion and luxury industries. Among the semi-finalists, seven do womenswear, five menswear, and two do both womenswear and menswear. Six of them design genderless collections.

“This edition also saw the return of knitwear, body-conscious garments and the celebration of colour among certain designers. I am also delighted to welcome Naomi Osaka, a committed and outstanding tennis champion, the ambassador of this edition who will accompany us to the final.

“Finally, five inspiring personalities have joined our prestigious Committee of Experts this year: Bella Hadid, model; Samira Nasr, editor-in-chief of Harper’s Bazaar US; Léa Seydoux, actress; Aleksandra Woroniecka, fashion director of Vogue Paris; Margaret Zhang, editor-in-chief of Vogue China. All this promises a very rich and exciting 2021 edition.”

The date of the final and announcement is still to be confirmed.  Bizcommunity

Mr Price – change in JSE equity sponsor

Mr Price Group advised that Investec Bank Ltd. has been appointed as the Company’s JSE Equity Sponsor and Corporate Broker with effect from 1 April 2021.

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Did you know……..

“Worker rights of fast fashion employees are strongly violated” (Euronews, 2019)

Once you know that over half of fast fashion employees don’t even get a living wage, the overall mistreatment of these workers doesn’t sound like breaking news. However, the working conditions are still worth mentioning—and prioritising. Fast fashion factories are often dangerous for workers. The most well known proof of this is the collapse of the Dhaka garment factory in 2013 that took the lives of 1,134 people and left around 2,500 injured.