South Africa: Textile Company Stays Afloat due to AGOA
Southern Textiles, a Durban-based company that manufactures for the clothing, shoe, luggage and upholstery industries, has lost about 40 percent of its revenue to Chinese imports, but has still managed to remain successful because of its flexibility.
"The clothing industry has been the worst hit but luggage has been doing fine and upholstery has done very well," Robert Patchappen, the director, said yesterday.
The trimming manufacturing company, which operates on a 24-hour basis and has a staff of 120, has been struggling against Chinese imports for the past two to three years.
"However, we have managed to keep our head above water because of a 10-year contract through the African Growth and Opportunity Act [Agoa]," said Patchappen.
Agoa, which was passed in 2000, admits quota- and duty-free goods into the US from eligible African countries, including South Africa.
Quality is key to Southern Textiles' success and the company was awarded the New Millennium International Award for quality in Madrid.
"This is the first time a local company has been awarded this trophy," Patchappen said.
Southern Textiles had enjoyed a good festive season and orders were still buoyant. "We could have got better prices but we had to drop them because of unfair competition from imports," he said.
In one case, he said, an importer had come to him to put a trim on a lady's skirt, which had cost just R3 to import.
"No one in this country can make a skirt for that price. The Chinese are able to produce goods for next to nothing because of government subsidies they get for providing work for local people. The only thing we have in South Africa is the Proudly SA campaign, which tries to promote local products to preserve local jobs."
 |
Latest AGOA Trade Data currently available on AGOA.info
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 AGOA.info include: (click each link to view)
While there had been a huge shift from manufacturing to importing, Patchappen said there was a certain public sector that did not want to buy Chinese goods.