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Chinese textile enterprises face trouble in South Africa
06
Nov '12
Textile mills owned by Chinese entrepreneurs located in the old industrial region of Newcastle city in South Africa’s Kwazulu-Natal province are currently struggling for survival.
 
The industrial region has over 120 enterprises, with more than 50 percent of them being textile mills.
 
At present, unemployment rate in Newcastle city has risen to 60 percent. The total number of people employed in the textile industries has declined to around 7,000, from the peak 13,000.
 
During its peak period, the textile industry accounted for about one-third of the total industrial jobs in Newcastle.
 
The textile industry also paid around R4 million in taxes, which was one-tenth of the all local taxes collected.
 
Chinese textile entrepreneurs have invested over R1 billion in the Newcastle region and are currently a source of livelihood to about 25,000-50,000 local citizens.
 
The area inhabits about 2,000 Chinese people, which include shopkeepers and traders, besides textile factory owners.
 
At present, however, the Chinese textile mills in the Newcastle area are struggling for survival owing to a number of reasons. First, there has been an overall slump in South African textile industry, which can be gauged from the fact that the number of persons employed by the textile and clothing industry in South Africa has dropped to 55,000 last year from over 200,000 a few years ago.
 
Secondly, there is a rise in labour costs, which is leading to a dip in corporate profits and is also a cause for frequent employer-worker disputes.
 
Moreover, the plight of Chinese textile entrepreneurs has further worsened due to flooding of low-priced imported textiles into the country, which is offering cut-throat competition to South African domestic textile industry.
 
As a result, the Chinese textile enterprises in the Newcastle area are required to either make suitable changes by upgrading machinery and adopting new techniques, or shift to other countries or wait for extinction. 
 

Fibre2fashion News Desk - India


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