'SA garment sector may see steady growth in 2012'

18 Jan '12

2 min read

After witnessing a period of consolidation and stabilization for the last 18 months, South Africa's garment industry may grow at a steady pace this year, according to Johann Baard, Executive Director of Apparel Manufacturers of South Africa.

Since very few South African garment manufacturers export to the US and European markets, the country's apparel exports are not likely to be affected by the ongoing financial crisis in those countries, Mr. Baard said.

In the past, South Africa's garment sector had faced competition from low-priced Chinese imports, but the sector performed well last year after the Government introduced several measures to boost employment and growth.

In October 2011, an agreement was reached between the garment industry employers and the Southern African Clothing and Textile Workers Union (SACTWU). The deal offered 30 percent lower wages to new workers, which was an innovative attempt to boost employment.

Few months back, the South African Government announced a new procurement policy which asks all Government departments to buy several clothing and other items from local suppliers.

Mr. Baard said that he was optimistic for the current year, but pointed out that there are certain steps that still need to be taken. For instance, he said, there is an urgent need to reduce duty on all imported fabrics.

He explained that nearly 80 percent of all fabrics used by local companies are imported, as they are not produced in the country. These fabrics currently attract a duty of 22 percent, which places a huge burden on producers increasing their cost of production and affecting their cost competitiveness.

He urged the Government to take more steps to deal with the issue of illegal clothing imports that had led to a loss of nearly 50,000 jobs during the last ten years.

Fibre2fashion News Desk - India