TRALAC - Trade Law Centre

Botswana Garment Factory: Goods Made in China?

Wednesday, 09 November 2005

Source: Mmegi/The Reporter (Gaborone)

The on-going rift between employees of Caratex - a garment manufacturing company - and its management took a dramatic twist on Monday when the employees reported the management to the Department of Customs for importing overseas garments labelled "Made in Botswana".

After the tip off on Monday, police and customs officials moved in swiftly and shut down the Caratex II factory - a subsidiary of Caratex.

After the closure, the over 80 employees of the company were sent home immediately.

An official at the Department of Customs confirmed the lock out of the Caratex II factory, saying they were tipped off by employees that it was importing garments tagged, "Made in Botswana."

"We are at the preliminary stage of our investigations. It is too early to divulge any information," another source at the customs department told Mmegi.

Employees at the factory revealed that after receipt, the goods, are then repackaged and exported to the US under the US preferential trade deal, the Africa Growth and Opportunity Act (AGOA).

"Production is low at Caratex, but output is amazing. While most Batswana are unemployed, Caratex continues importing goods from Russia and China," a disgruntled employee from the finishing and packing department at Caratex II said on Monday.

"If you go to the factory right now, you will be amazed to see stacks of imported clothes labelled made in Botswana. These clothes are imports, their package is written in Chinese. They have not been made here. Our duty is merely to re-package them, and label the packaging as also "Made in Botswana".

Caratex exports knit-to-shape sweaters at zero tariffs to the US and enjoys duty savings.

Scores of Caratex II employees claim that they are forbidden to raise complaints in the work premises. "If you make any enquiries, you are blackmailed and then fired," said a furious employee. "Our line supervisor is a Malawian, who does not even have a passport. When police visit the company premises, he escapes through the backdoor," said another employee who has worked for Caratex for more than five years. He was speaking on condition of anonymity.

"We are threatened on a daily basis. I have been working here for nine years yet I am still paid P3.10 per hour just like a newly employed worker," said another disgruntled employee.

For his part, Caratex managing director and majority shareholder, Craig Chow told Mmegi that it is impossible that his company could flout AGOA agreements. "I hate rumours," Chow said. "We have met customs' requirements." He however asserted that Caratex has Chinese, not Russian production in the factory. "Our Chinese produce is sold to South Africa. Botswana cannot meet the market demand therefore we have to produce in China so that we sell to South Africa," he revealed. "We only send them a copy from Botswana, Chinese then mass produce the required product. We have to use the original label." While dismissing the allegations Chow maintained that it could have been a mistake if Chinese products were delivered to Botswana labelled: "Made in Botswana." Chow said Caratex has a good relationship with customs officials. "They often come to our offices to assess our work," he said.

Caratex II packing supervisor, Peedzani Mokgethi refuted allegations that the factory was under lock up. "I don't respond to rumours. I don't deal with that because I am not a supervisor, but an administrator," she said. Efforts to reach Caratex executive director, Tally Tshekiso proved futile as he was said to be out of the office.

For years, Caratex and its five subsidiaries have been expanding production to take advantage of the elimination of import duties under the US initiative - AGOA. This has seen the company increase its employees from 500 in 2001 to 1,300 in 2003. Currently Caratex's six factories have more than 5,000 employees. Caratex earned over P36 million in 2002 in total apparel export, export revenue increased in 2003 to P169 million and to P283 million in 2004.

According to the Southern Africa Global Competitiveness Hub, US apparel buyers place orders in Africa because "the quality is good and the price is competitive." This made Caratex an AGOA success story that resulted in the establishment of Vision and Caratex II.

Vision, which produces business attire was established in 2002 and employed over 600 people. Caratex II, which produces demin jeans and specialises in finishing and packaging opened shortly after Vision.



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Other regularly updated trade statistics on AGOA.info include:

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  • Apparel Trade under AGOA’s Wearing Apparel Provisions

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