Newsletter No 28 / 30 July 2021
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Every action counts in sustainable plastic drive
By Eunice Ubomba-Jaswa and Nonhlanhla Kalebaila
Consumers must be more aware of and producers more transparent about single-use plastics
Public awareness of the issue of single-use plastics is increasing and with it a collective shift in consciousness towards sustainable consumption. This has brought about slight changes in our individual choices and the implementation of various plastic-waste prevention actions by governments and industry.
By now, some of us remember to bring our reusable bags for grocery shopping. We have probably also made peace with paper straws and may even separate our rubbish into various categories to aid recycling. Now, in the era of Covid-19 we need to make an effort to properly dispose of masks, gloves and other protective equipment. These are all commendable actions that need to be permanently adopted by all as we wrap up this month’s Plastic Free July initiative, a global call to action that asks consumers to reduce, recycle or refuse to use single-use plastic.
Awareness campaigns such as Plastic Free July can both spur behaviour change and demand that industry accounts for the negative effects of the plastic value chain on the environment. However, to more effectively reduce plastic pollution we — consumers, industry and policymakers — need to broaden our horizons and look at the consumption patterns that fuel plastic production and the industries that thrive on generating new plastic products.
The average consumer’s idea of plastic is usually discarded packaging. Occasionally a clothing label may state “made out of 100% recycled plastic bottle”, which indicates plastic was used in the manufacturing of that clothing. Recycling plastic waste and turning it into a useful material is important because it prevents leakage into the environment, boosts innovation and can help create livelihoods. However, the process of recycling plastic into clothing still needs to be optimised as it can affect the environment too.
Furthermore, seldom mentioned and largely hidden from public view is the amount of virgin, or new, plastic that goes into making cheap synthetic material that is heavily used in the production of “fast fashion”. In fact, two thirds of all clothing contains petroleum-based synthetic fibres such as polyester, acrylic, elastane and nylon which are all essentially plastic. The volume of plastic and potentially harmful additives used in the clothing and textile industry is immense and adds to the industry’s already considerable environmental toll.
The volume of water used in the production of garments is also staggering. According to the UN Environmental Programme, 2,700 litres is required to produce one T-shirt — enough drinking water for one person for more than two years. The subsequent pollution as a result of textile dyes and synthetic chemicals has been researched, documented and explicitly shown to be one of the causes of ecosystem deterioration and disease in communities living and working in areas with high industrial activity.
While recycled polyester keeps plastic from reaching the ocean, it still releases microscopic plastic fibres when in use or being washed. According to a 2017 report by the International Union for Conservation of Nature, microfibres from products such as synthetic clothes and car tyres could contribute as much as 30% of the plastic waste that ends up in the environment. Even after disposal in landfills, chemicals leaking from discarded clothing could eventually end up in groundwater if these disposal areas aren’t designed and managed properly.
Like most microplastics, microfibres from clothing eventually end up in our rivers, dams and ultimately the ocean. An estimated 35% of primary plastic in most of the world’s oceans originates from particles in items made with synthetic material.
Water treatment plants have been identified as a potential source for the transfer of microplastics and fibres into water environments. Recent studies show well-designed and maintained water-treatment facilities can remove almost all (as much as 94%) of the microplastics in the untreated water, but that efficiency will decline in plants not functioning properly. Moreover, the microplastics removed during are likely to be present in wastewater sludge, which may act as another medium for dissemination into the environment by using the sludge for agricultural purposes.
In a worldwide study, 83% of tap water samples analysed contained microplastics, 99.7% of which were microfibres. Similarly, earlier research funded by the Water Research Commission revealed the presence of microplastics and microfibres in drinking water, groundwater and surface water in Gauteng. Still, the study found that levels of microfibres in surface water in SA were far lower than in other industrialised countries. But with further industrialisation, rapid urbanisation and the continued use of fast fashion, the levels of microfibres in surface and groundwater in SA are set to increase.
According to the World Health Organisation, the potential hazards associated with microplastics and fibres is multifaceted and complex. Microplastics can act as physical stressors, where they may be ingested by smaller organisms, resulting in possible adverse effects. Microfibres have been reported to pose a health threat to tiny organisms in water known as phytoplankton, and could eventually pose a threat to humans as a result of plastic entering the food chain. Microplastics are also thought to act as carriers of toxic chemicals and pathogens, thus serving as vectors and hosts for the entry of a cocktail of hazardous chemicals and pathogens into our bodies. The science on the risk of microplastics to human health is evolving, so it is important to continue implementing as many measures as possible.
SA relies on surface water and groundwater sources for industry and domestic needs. It is therefore imperative that the necessary research is conducted to unequivocally determine the extent of the problem and implications of microfibres, and microplastics broadly, on ecosystems and human health. This research is important as it will ensure a balanced discussion on universal action plans required for dealing with microplastic pollution and informing public debate on the issues.
Many of the changes required to make the textile industry more sustainable rest with big manufacturers, but consumer behaviour and choices can make a fundamental difference. Buying less clothing — even if it is made with natural fibres — choosing brands with sustainability credentials, repairing, donating or even upcycling clothes into new products, will go a long way to transform the clothing and textile industries.
For their part, the clothing and textile industries must change their production processes and become part of the circular economy, where all products are sustainably manufactured to regenerate the environment and eliminate waste and pollution. As part of their sustainable business efforts, the industry must fund continuing research & development into sustainable large-scale production methods and alternative fibres such as bamboo, hemp and banana in place of synthetic fibres. Greater transparency in the clothing and textile industry is also required. For example, clothing labels should explicitly state how much plastic and water is used in a product, giving the consumer the choice to purchase an item containing less plastic or an alternative item.
As we continue to better understand risks of microfibres and microplastics in general to the ecosystem and human health we urge manufacturers and consumers to get involved in Plastic Free July. As its theme states, “My Plastic Action Counts”. We can all be part of the solution by preventing the mismanagement of plastic, including how we make, purchase, use and dispose of our clothing. BL
• Dr Ubomba-Jaswa and Dr Kalebaila are research managers at the Water Research Commission.
Sweet-Orr – Beyond South Africa
While some people view challenges as deterrents, others latch on and turn them into opportunities. Sweet-Orr, a leading protective workwear company, is a case in point. During the Great Depression, this New York-founded company decided to branch out into South Africa.
It was a bold decision: expanding into South Africa, a mere two years after the disastrous Wall Street Crash of 1929. The US was, after all, in the throes of the worst recession to date.
However, the South African gold industry was booming, driven by a rapidly rising gold price. The result was a sky-rocketing demand for quality protective work clothing, a demand that South Africa could not meet locally.
Ninety years have passed since Sweet-Orr took that courageous step, and 150 years since its founding in 1871. During that time, the business, now 100% South Africa-based and owned, has grown from strength to strength.
Variety is the spice of life
Over the next nine decades, Sweet-Orr – founded in Wappingers Falls, New York, by Irish immigrant James Orr and his nephews Clayton and Clinton Sweet – steadily expanded beyond mining. Other sectors, such as the petrochemical, engineering, automotive and hospitality industries as well as the medical fields and the military, also needed quality apparel.
“From its earliest days, the company knew that diversification was key to its long-term survival. Getting too comfortable and relying on just a few off-takers has never been sustainable, not in the 1930s and definitely not now,” says executive director Denver Berman-Jacob.
More, improved products
This diversification strategy has also translated into an ever-expanding product range, thanks to strategic partnerships with leading personal protective equipment specialists.
Currently, Sweet-Orr’s head-to-toe offering encompasses anything from head, eye, ear, and hand to foot protection. There is also an extensive range of essential workwear, utility workwear, denim and specialised workwear, including flame retardant, acid-repellent, arc flash and flame-acid workwear for high-risk environments.
While continuously expanding its client base and product range, the company has moved from being a traditional single-channel sales business towards a multi-channel sales business with a robust e-commerce presence.
“Our products are now for sale on our website and via outlets such as Takealot. We have opened our first showroom in Boksburg, too. This has made it easier for potential clients to access our workwear,” says Berman-Jacob.
Beyond South Africa
In the meantime, Sweet-Orr has extended its reach beyond South Africa, and is currently distributing into the SADC region and the United Arab Emirates. “We are also in conversation with various distributors in other parts of Sub-Saharan Africa. This region is full of opportunities!”
There are plans to go back to Sweet-Orr’s roots. “As South Africa’s oldest manufacturer of protective work clothes, the thought of once again serving the very country where we once originated is incredibly exciting. Making the circle full would be a tremendous feat.”
SA Fashion Designers contribute a billion rand towards SA’s GDP – clothes can be an extension of how we feel
By Zolani Qetsele
Clothes do more than simply cover up or accentuate our bodies, they are an extension of how we feel and interact with the world, says Mark Frame, CEO of Frame Leisure Trading and pioneer of The Cross Trainer’s highly acclaimed athleisure brand, XT. Frame’s sentiments come as the XT range celebrates reaching another milestone, growing its footprint from 30 outlets to now being available in all 60 stores of The Cross Trainer nationwide, despite the current difficult trading conditions. “Successfully launching a new product can be tough, risky and requires meticulous execution across the board, especially when a brand such as XT, has been years in the making. Even during Covid and reduced mall traffic, we remained confident that we had a stellar brand on our hands when we launched earlier this year. When we saw how fast the affordable XT range left the shop floor, we knew that we had created something truly incredible and had to expand it to the whole country.
We first made it available online and then expanded into other outlets,” explains Frame. Beyond the brand’s affordability, Frame attributes XT’s surging success to its glocalisation approach and the prioritisation of sustainability through using environmentally friendly materials. Furthermore, the XT range collaborates with locally established design studios; Koop Studio and The Faktory for Designers which provide a mentoring and upskilling service to young designers. Along with homegrown artists, the XT range sets a new standard of fashion and empowers the very communities apparel aficionados come from.
According to research led by the Department of Trade, Industry and Competition (DTIC) and the South African Cotton Cluster, designers who form part of the clothing and textile sector in South Africa, contributed approximately R1-billion to South Africa’s Gross Domestic Product (GDP) during 2019. For Frame, the fashion retail industry’s estimated contribution to the country’s GDP is a clear indication of what is possible when South Africa prioritises local manufacturing. “The country has shown it has an appetite for quality, locally produced goods and this extends beyond the textile and fashion spheres.
South African products are world-class but local retailers and manufacturers often have to battle a slew of challenges to get their products to market and as a result, most designers, manufacturers, and retailers choose to sell their goods online,” says Frame. He says, while this approach is a method of overcoming one barrier, unfortunately, it also isolates a huge chunk of the market as not every customer has access to connectivity or bank cards to conduct digital payments. According to a Deloitte study, South Africa has as many as 20% or 12 million unbanked citizens. “This was one of our motivating factors to grow the number of stores so that people can find the XT range. As an apparel retailer, we understand that our connection with fashion goes beyond the pragmatics of just wearing clothes. The way we dress also reflects the changing spirit of our modern society and the pursuit of authenticity. It is therefore vital to offer people the means to set themselves apart and to give them something they can intrinsically identify with,” concludes Frame.
Pepkor – voluntary trading update
Group revenue for the nine months ended 30 June 2021 (“nine-month period”) increased by 13.9% to R53.9 billion. This includes revenue growth of 8.1% reported for the six months ended 31 March 2021 and revenue growth of 27.9% for the three months ended 30 June 2021 (“third quarter”). Trading during the third quarter was volatile with moderate trading in April 2021, strong trading in May 2021 followed by subdued trading in June 2021.
Performance during the third quarter compares to the corresponding third quarter ended 30 June 2020 which was affected by varying degrees of store closures due to COVID-19 lockdowns. The group was also not able to trade on its full product range in certain retail brands until June 2020. In addition, very strong trading was reported once stores reopened due to pent-up consumer demand.
Clothing and general merchandise
Segmental revenue for the nine-month period increased by 14.0% and by 28.7% for the third quarter.
Pep and Ackermans continued to grow market share on a 12-month rolling period according to the latest Retailers’ Liaison Committee (RLC) data, albeit at a slower rate which was expected following the high base and significant market share gains achieved since May 2020. Retail space expanded by 3.2% year-on-year with 56 new store openings during the third quarter.
Like-for-like sales growth for the third quarter based on the corresponding third quarter ended 30 June 2019 was 10.3%.
Pep Africa performed well in constant currency terms as sales increased by 14.0% and like-for- like sales increased by 16.5% for the nine-month period. Sales in South African Rand (“ZAR”) terms declined by 9.9% for the nine-month period due to the weakening local currencies and the strength of the Rand.
The Speciality business continued to benefit from strong consumer demand for casualwear and branded footwear in the value market segment.
Like-for-like sales growth for the third quarter based on the corresponding third quarter ended 30 June 2019 was 12.2%.
Collections on the Tenacity credit book, which facilitates credit sales in Ackermans and Speciality, were satisfactory and remained at similar levels to those before the onset of COVID-19.
Furniture, appliances and electronics
Segmental revenue for the nine-month period increased by 22.1% and by 50.5% for the third quarter.
Trading in the JD Group continued to benefit from strong consumer demand for household goods and consumer electronics. Sales were driven by strong growth in cash and lay-by sales while continued prudent credit granting resulted in a lower total credit sales mix of 9.7% for the nine- month period versus 14.0% in the comparable nine-month period ended 30 June 2020.
Collections on the Connect credit book, which facilitates credit sales in JD Group, were satisfactory and remained at similar levels to those before the onset of COVID-19.
Like-for-like sales growth for the third quarter based on the corresponding third quarter ended 30 June 2019 was 22.4%.
The Fintech segment reported revenue growth of 4.3% for the nine-month period and 7.0% for the third quarter.
Revenue growth momentum in Flash continued at double digits, while reduced credit granting and lower interest rates resulted in a decline in revenue generated by the Capfin business. Collections in Capfin were satisfactory and remained at pre-COVID-19 levels.
Like-for-like sales growth for the third quarter based on the corresponding third quarter ended 30 June 2019 was 9.2%.
The Competition Tribunal will consider the transaction to dispose of The Building Company following the Competition Commission’s recommendation on 28 May 2021 to prohibit the transaction. The timing of the Competition Tribunal hearing has not been confirmed.
Refinance of R2.5 billion term loan funding completed
On 30 June 2021 the group completed the refinancing of R2.5 billion in term loan funding (“Term Loan C”). Term Loan C carried interest at three-month JIBAR plus 225 basis points and was repayable in May 2022 (as disclosed in the group’s 2020 annual financial statements). Term Loan C was replaced by three term loans repayable from 2024 to 2026 at substantially lower rates ranging between three-month JIBAR plus 159 to 174 basis points. This further strengthens the group’s liquidity, debt repayment profile and reduces the group’s cost of funding.
As reported by the group on 16 July 2021 on SENS, the civil unrest which erupted during July 2021 in the KwaZulu-Natal and Gauteng provinces of South Africa (“the affected areas”) impacted Pepkor’s operations and the livelihoods of its people.
After a thorough assessment, a total of 529 stores across the group were impacted in the affected areas. Stores were burnt, looted or damaged to varying degrees. This represents approximately 10% of the group’s total retail store base. In addition one of the JD Group’s distribution centres in Cato Ridge, KwaZulu-Natal was looted. Trading was disrupted, with a number of stores intermittently closed in the affected areas as a precautionary measure to ensure the safety of employees and customers. In addition, the group’s supply chain and distribution operations were severely disrupted in the affected areas as the group took swift action to deploy extensive tactical measures to protect and safeguard its infrastructure.
Recovery plans have been formulated and implementation has commenced. The pace at which stores will be reopened is dependent on factors such as access to materials and equipment for store refitment purposes and the ability of property owners to restore premises which suffered extensive damage. All distribution operations have recommenced from Monday 19 July 2021 and plans were put in place to service JD Group stores in the affected areas through its other distribution centres. Merchandise teams are working with their long-standing and geographically diversified supplier bases to address any potential impact of stock shortages.
As previously reported, the group has the necessary insurance cover in place to mitigate losses incurred for damage to assets, stock losses and business interruption. The process to quantify damages and initiate claims has started. Additional costs have been incurred to secure and safeguard assets and infrastructure. While these costs may not be fully recoverable, it is not expected to have a material impact from a group perspective.
The group continues to expect a constrained retail environment going forward as a result of the longer term impact of COVID-19 on the South African economy, further exacerbated by the recent civil unrest. The group’s unparalleled position in the discount and value retail market segments continues to be increasingly relevant in addressing consumer needs.
The leadership and operational teams of Pepkor have again shown incredible agility and resilience in dealing with this latest crisis. Pepkor will remain true to its purpose to make a positive difference in the lives of our customers and the communities in which we operate by providing convenient access to everyday products and services at affordable prices.
Pro forma constant currency disclosure
The group discloses unaudited constant currency information to indicate Pep Africa’s performance in terms of sales growth, excluding the effect of foreign currency fluctuations. To present this information, the nine-month period turnover for Pep Africa reported in currencies other than ZAR are converted from local currency actuals into ZAR at the prior nine-month period’s actual average exchange rates. The table below sets out the percentage change in sales, based on the actual results for the nine-month period, in reported currency and constant currency for the basket of currencies in which Pep Africa operates.
Did you know……..
Although the idea may sound unbelievable, there is a vegan alternative to leather, which is made from pineapple leaves. London-based Ananas Anam has developed a natural and non-woven textile out of pineapple leaves, known as Piñatex which is remarkably similar to leather. The revolutionäre pineapple fabric is made from pineapple leaf fibres, a by-product from the pineapple harvest in the Philippines. During a process called decortication, the fibres are extracted from the leaves. The fibres then undergo an industrial process to become a nonwoven textile, which is the base of Piñatex. A by-product derived from the manufacturing process is biomass, which is converted into organic fertilizer or bio-gas and used by the farming communities, thereby closing the loop of the material’s production.
Piñatex is the result of years of work and the search for an alternative to leather; a new type of natural tissue, which is 100 percent vegan and sustainable. In addition, it is also a strong, yet versatile, breathable, soft and flexible, material which can be easily printed on, stitched and cut, making it suitable for a number of fashion products. It has also won a number of awards. The next big step is to popularise Piñatex further and to continue developing and stabilizing its supply chain to meet the growing demand for its pineapple leaf, in a way that does not compromise its mission and fundamental values concerning environmental, ethical, social and economic sustainability.
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