TRALAC - Trade Law Centre

South Africa: Clothing Industry Sounds the Alarm over Critical Mass

Monday, 06 March 2006

Source: Business Report (South Africa)

The clothing industry is perilously close to minimum critical mass and if the dramatic surge in undervalued imports is left unchecked, could decline to the point where the sector is no longer of any interest to global sourcing companies.

This is the view of Jack Kipling, the chairman of the Export Council for the Clothing Industry, who said the sector could also decline to the point where it was unable to support the local textile and components suppliers, such as zip and thread manufacturers.

"The only way to avoid this," he said, "is if action is taken in the form of the urgent introduction of the proposed voluntary constraints on Chinese imports announced recently."

He said that up until 2002, the clothing industry had been a net earner of foreign currency, but since then the extraordinary surge of imports had completely turned the situation on its head.

In 2004 South Africa imported 389 million units and 17.5 million kilograms of apparel. In 2005, imports continued to grow at 40 percent, and from January to September the country imported 307 million units and 14.2 million kilograms, 91 percent from China.

Kipling said that even the strongest, most efficient local manufacturers were struggling to make enough to reinvest in state-of-the-art technology.

"The clothing industry globally is a numbers game; critical mass is a prerequisite for long-term sustainable competitiveness. A strong and growing domestic market is critical to long-term sustainable export growth."

Kipling said that while no African country could be an alternative to China or India, sub-Saharan Africa collectively could be if it thought big and long term, and talked with one voice for the region.

With this aim, the African Cotton and Textiles Industries Federation (Actif) was established last year. "To the best of our knowledge, we are the first industry to talk with one voice for Africa from Cape to Cairo under a single mandate," Kipling said.

The first major success under Actif was a united approach to Washington to negotiate changes to the African Growth and Opportunity Act on behalf of the entire region.

"We were well received but the global introduction of Actif at the International Apparel Federation World Conference in Cancun in October was wiped out by Hurricane Wilma."

Kipling said the council had finally succeeded in convincing the department of trade and industry (dti) to accept the need to radically relook at the rules of origin that would allow South African clothing manufacturers access to third country fabrics, which would greatly increase the interest of EU and US buyers to source from South Africa.

In a positive development, the minister of trade and industry, Mandisi Mpahlwa, has given the export council a formal policy statement that he would instruct trade negotiators to fight for this in all future trade agreements.

The customised sector programme (CSP) for the clothing industry is also coming to a head.

"The export council will move forward taking full cognisance of all the proposals that have been made during the CSP process by all stakeholders and will seek to integrate the decisions that emanate from the CSP into the dti's national export strategy," Kipling said.

The goal for the export council during 2006 is to rebuild exports to the levels they were at in 2002 and 2003.

A major step in this direction is the interim development programme, an extension to the duty credit certificate scheme, which is now a done deal just awaiting a formal announcement and gazetting.

"However, the introduction of the export incentive scheme is a year overdue and has been very frustrating for all concerned," Kipling said.

The export council is also planning a series of fact-finding study missions to China aimed at building partnerships and joint ventures, and establishing best practice benchmarks.

The council will also do a serious stock take of all apparel manufacturers in South Africa with a view to establishing precisely what capacity and product strengths are still available to spearhead the revival of the industry.

“ Latest AGOA Trade Data currently available on

Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.

Other regularly updated trade statistics on include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.