South African textile sector faces several challenges

15 Mar '13

2 min read

South African textile and apparel industry is facing several challenges, including macroeconomic influences of Asian imports and the domestic labor challenges, and hence the performance of the industry may reamin stable in the coming years, according to the analysis of Coface, a French company which offers credit insurance and credit management services worldwide.

Mr. Roger Peixinho, commercial analyst of Coface-South Africa, told fibre2fashion, “South African textile and clothing manufacturers are operating under extreme pressure against low-cost imports, especially from India and China.”

“Since 1994, about US$1500 million has been spent on modernizing and upgrading the South African textile and apparel industry, making it efficient, internationally competitive and ready to become a major force in the world market,” he informs.

According to him, Chinese production incentives prevent local textile and clothing manufacturers from being price competitive. “Some of the other challenges faced by the country include stringent domestic labor laws, increasing workers wage, unionized labor force, poor operational efficiencies, rising input cost including electricity, excess competition in the small and medium enterprises and cheap Asian imports flooding the local market,” he explains.

“South African textile and apparel sector also lags in technology and industrial skills,” he adds.

Talking about the revival of South African textile and garment industry, he says, “Though, the country has seen the industry grow slightly over the last ten years with intervention and assistance of the Federal Government in regard of grants, issues such as striking workers, stronger rand value, technological advancements and global competition have hampered growth within the textile and clothing sector,” he mentions.

“The performance of the industry is set to remain stable over the coming years with not much growth projected,” he concludes.

Fibre2fashion News Desk - India