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textilesTextiles, clothing and footwear

The South African textile industry is as varied and rich as an embroidered cloth. It is well developed and sophisticated, not only in the traditional activities of clothing, textiles and home textiles, but also in the modern sub-sector of technical textiles.

Textiles are South Africa's third largest employer in the manufacturing sector and the eleventh largest exporter of manufactured goods. In the last quarter of 2009, textiles and clothing contributed 4.9 percent to the total manufacturing output.

The industry is generally concentrated in the coastal areas of the country - KwaZulu Natal, the Eastern and Western Cape. The local market is characterised by a few large firms, with a number of smaller concerns. Most of its products are sold as intermediate inputs to the clothing industry (19 percent of total sales) and other sub-sectors.

The textile industry has been earmarked by Trade and Investment South Africa (Tisa) as one of eight sectors showing the greatest growth potential and marketability.

In recent years, this sector has seen tough times, coming under pressure from illegal imports, the strength of the rand, as well as the flood of mass-market clothing produced in Asia. However, because it is labour intensive -- in 2008, almost 170 000 people were employed by the sector -- the government has identified it as a high-priority sector and has put in measures to help the sector grow.

In early 2010, Trade and Industry Minister Rob Davies announced the new Industrial Policy Action Plan, pledging R1,8-billion in incentives to the sector. He said support would be sharpened around the clothing and textiles sector, while the South African Revenue Service would continue to crack down on illegal imports.

Opportunities

The government has recognised that the key opportunity is to recapture domestic market share through improving competitiveness through a range of interventions including a focus on product, process and delivery efficiencies and harnessing proximity to local retailers.

Going forward, the commercialisation of new technologies should give the textile pipeline an added advantage in the global arena. This will include the beneficiation of new fibres now being grown in South Africa. Traditionally only cotton and wool were grown for export in semi-processed form.

Since 1994, more than US$1-billion has been spent on upgrading and modernising South Africa's textile, clothing and footwear industry, making it efficient and ready to compete internationally.

The South African market demand increasingly reflects the sophistication of developed markets, and the local textile and clothing industry has grown accordingly to offer the full range of services, from natural and synthetic fibre production to non-wovens, spinning, weaving, tufting, knitting, dyeing and finishing.

Achievements

  • Local yarn manufacturer Sans Fibres supplies 80 percent of the sewing thread used in the world's apparel sewing operations.
  • Local fabric mill Gelvenor Textiles supplies more than 50 percent of the world's demand for parachute fabrics.
  • Local suit manufacturer House of Monatic has delivered its one millionth suit to the UK market.

Market access

Several factors make the prospect of investing in South Africa's textiles, clothing and footwear market attractive.

South Africa has trade agreements with the European Union and the United States. In the case of the US, textile imports have increased under the Africa Growth and Opportunity Act (Agoa), which has been in place since 2000 and offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

South Africa has preferential access to the Southern African Development Community (SADC) region, thanks to the SADC Free Trade Agreement, which has been in operation since 2008. This means producers and consumers pay no import tariffs on about 85 percent of all trade goods between the 11 countries.

The government's 2010 Industrial Policy Action Plan aims to help the country leverage more local procurement to raise domestic production by overhauling the Preferential Policy Framework Act and assigning points in the tender process to those firms that procure locally.

Export incentives

The duty credit certificate scheme, which has been the main export incentive for the sector, allows exporters to gain credits on certain imports. This list has been restricted to 10 items (fabrics and yarns and excludes finished items). This scheme is set to expire at the end of March 2010. The government plans to move away from the duty credit certificate model, to a system based on credits that can then use the IDC for accessing finance.

Availability of raw materials
Other competitive advantages for the sector lie in competitive labour costs and the ready availability of natural fibre raw materials.

Cotton

South Africa produces above world-average lint, providing the potential for the local cotton pipeline to become increasingly export-oriented. Cotton fibre and yarn can also be imported from the SADC region to supplement production for Agoa purposes.

Leather

South Africa has the raw materials needed to produce any type of footwear, from low end to high end. Bovine, ostrich, Nile crocodile, game leather, textile and PVC and PU synthetic raw materials can all be sourced locally without difficulty.

Vegetable fibres

South Africa is successfully growing and processing natural fibres such as flax and hemp, in response to increasing demand from the automotive and aeronautics industries for environmentally friendly body parts.

Wool and mohair

South Africa is the mohair capital of the world, both in terms of quality and quantity, with 95 percent of the world's mohair passing through Port Elizabeth's port.

Mohair from across the world is imported to the Eastern Cape for further beneficiation at processing plants in Uitenhage and East London. There are also two mohair yarn spinning factories in Port Elizabeth and Uitenhage. A total of 55 percent of the mohair fed into these plants originates from within the Cacadu District of the Eastern Cape, while 80 percent originates from the Eastern Cape.


SOURCES
Image: The design studio of Hip Hop, a successful South African fashion label.
Photo: Rodger Bosch, MediaClubSouthAfrica.com

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