TRALAC - Trade Law Centre

Botswana: Local AGOA textile exports drop 11%

Friday, 15 January 2016 Published: | Mbongeni Mguni

Source: Mmegi Online (Botswana)

The figures indicate that local textile exports to the U.S have again turned south, after a recovery in 2014, when they jumped 61 percent to $9.5 million (P110 million) at current rates.

Sam Lin, director at Carapparel Botswana – the country’s last remaining AGOA textile export – told BusinessWeek that many factors, including tight competition from China, conspired to depress sales last year.

“The market was lower than average and demand was reduced,” he said.

“We also struggled with power cuts, labour challenges and stiff competition for the U.S market from China.

“Generally speaking, the textile industry globally was weak in 2015.”

He said while the firm had installed a back-up generator, this was insufficient for optimal production and Carapparel frequently found itself having to suspend production.

Lin forecast an equally grim 2016, saying already the company was struggling with recruiting labour for its factories, after the mass resignation of many workers before Christmas.

According to Lin, in December, the firm had 600 workers, but these numbers had dropped to 380 when the year kicked off on Monday.

“People just resigned before Christmas while others who did not resign, did not return this week. “I have no idea why this happened,” he said.

Mohammad Shahid Ghafoor, president of the Botswana Textile and Clothing Association (BTCA) told BusinessWeek that the festive season exodus was as a result of workers seeking to encash their severance benefits.

Ghafoor, who is also the managing director of Western Apparels, said the benefits were payable after 12 months, as opposed to five years under previous laws.

Western Apparels holds tenders for police and military uniforms.

“Last year, we recruited many people in January/February and trained them, but many left in December,” he said.

“They cited many reasons, but we know they wanted to encash their 12 month severance benefits. “Retaining staff is becoming an issue. Many of the workers are women and they are finding other sectors such as security companies, cleaning firms and malls, to work in.

“We have been losing. The biggest problem is securing trained people, because there’s no training institution in Botswana to teach them.”

Ghafoor said the depressed AGOA exports were also a result of high production costs, including shipment of raw materials and the export via Durban.

“The costs include the utilities and together with the problem of productivity, these factors are affecting the industry,” he said.

The BTCA president said the industry was adopting a positive outlook for 2016, and discussions with the trade and industry ministry were ongoing for possible mitigatory measures.

“They know our problems and they understand. We are positive,” he said.

The association represents about 40 textile firms in the country.

 

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