TRALAC - Trade Law Centre

Strong Rand Not Good for SA's Clothing Exports

Thursday, 02 October 2003

Source: News24

Cape Town - As many as 12 000 textile industry workers stand to lose their jobs by the end of the year, said Walter Simeone, president of the South African Textile Federation.

He said that if the rand continued to strengthen indefinitely, about 35 000 people could lose their jobs.

He said the strong rand was having a "devastating effect" on the industry.

Already about 8 000 workers in the textile industry have lost their jobs since January.

This is a result of a stronger rand and the loss this has meant to exporters.

Simeone said a stronger rand meant that more textile goods were being imported and less was being exported.

"Workers at textile and clothing factories are being laid off as more textile goods are being imported," he said.

The stockpiling of poor quality clothing and fabric from China and Pakistan has also contributed to low prices, which the local manufacturers cannot compete against.

Mark Bennett, head of the South African Clothing and Textile Workers Union (Sactwu) research unit, said the crisis in the industry will only be resolved if smaller dealers support local manufacturers.

Sactwu said earlier it wanted small dealers to purchase no less than 90% of its clothing from South African manufacturers - rather than import from the Far East.