Govt plans to invigorate textile sector

This was announced by Trade and Industry Minister Mandisi Mphahlwa at the Economic Investment and Employment cluster briefings held in Cape Town on Wednesday, 29 August.

The broad key action programmes of the CSP are: recapturing domestic market share, facilitating export growth and capital and technology upgrade in line with the industrial policy upgrading programme.

Other dimensions include innovation design and value addition, creating a world class labour force, Black Economic Empowerment, and the formation of an implementation unit.

These key action plans comprise various projects which will be implemented in different phases.

“Regarding the China quotas, early indications reflect that total clothing imports from January to May 2007 have declined by approximately 15% in volume and value terms compared to the same period the previous year,” said Mpahlwa.

He explained that government would be undertaking a more detailed review to comprehensively analyse the impact of the quotas and ensure that all necessary steps are made to generate competitive local supply.

“Going forward, the work to limit illegal and under-invoiced imports is crucial within the sector. Cooperation with SARS [South African Revenue Services] on illegal and under-invoiced imports is being undertaken,” the minister said.

“Agreement has been reached with SACU [Southern African Customs Union] on a process to develop a SACU-wide strategy for textiles and clothing, including a new incentive.”

In October last year, Iqbal Sharma of the dti said that the aggregate published profits of the country's top five retailers soared from R1.7 billion in 2002 to R6.6 billion in 2006.

This vast increase in profits was partly attributable to increased sourcing of cheap clothing from China during this period.

This had resulted in the losses of about 67,000 jobs in South Africa's clothing manufacturing sector between January 2003 and July 2006, according to Ebrahim Patel of the South African Clothing and Textile Workers Union.

The quota measures negotiated between the government and China, signed into force on 28 August 2006, allow for import restrictions until 31 December 2008.

South Africa is now looking at ways of raising the number of value-added products that can be sold to China, rather than simply exports of commodities.

Article published courtesy of BuaNews