'Crisis aggravating already perilous state' – Chief, Textile body

09 Jul '09

3 min read

The textile and clothing sector has received a battering since the last few months due to the impact of the recessionary trends prevailing in global markets. Companies are either cutting down production or are shutting down units, which is leading to an increase in unemployment levels.

As it is, South Africa had been going through an acute phase of contraction even before the crisis unfolded. Lots of companies have folded up in the last few years more so due to the unprecedented increase in imports of textiles and clothing particularly from China in the last few years.

Fibre2fashion in a bid to learn the ground realities of the textile and apparel sector in South Africa spoke to Mr Brian Brink, Executive Director of the Textile Federation of South Africa, which is an umbrella association for other textile trade bodies and also an apex association for the textile industries in South Africa.

We began the interview by asking Mr Brink to reveal the current ground realities of the sector and the extent of penetration of Chinese textiles, to which he said, “The South African textile and apparel industries have been under increasing pressure from low priced imports into the South African market particularly from China over the past few years”.

“China has grown its share of the South African apparel imports from near zero at the turn of the millennium to almost 90% in 2009. A similar growth has been recorded by China in the area of domestic textiles such as blankets, bed linen and curtains. This growth is due to the extremely competitive prices at which China is able to export”, he added by saying.

“The average price of blankets imported into South Africa in 2008 from China was US $2/kg and that for bed linen $1.60/kg. Certain consignments have even lower prices. There have been reports of denim trousers landing in South Africa at $0.25 per pair, blankets at $0.90 per blanket and bed sets (duvet cover, sheet and pillow case) at $0.02-0.03 per set, due to which the South African textile industry is not able to compete with these prices”, he concluded by saying.

Next we asked him as to how he foresees the rest of the year, to which he replied by saying, “The index of production for the textile industry declined from 92 in Q1 of 2008 to 90 in Q4 of 2008 and slipped to 85 in Q1 of 2009. In other words there has been a 7% decline in activity in the textile industry over the last year. Prospects for the rest of 2009 are not encouraging. We would predict a slight recovery by end 2009 given the large stock overhang that exists at present”.

Next we asked him to discuss the steps the industry has taken to reduce the impact of the crisis, to which he said, “The crisis for the South African textile industry started well before the current global crisis and the current global crisis is only aggravating a perilous situation, due to which there have been some extremely significant closures of textile mills with the attendant human tragedy of job losses”.

“The South African Government announced last month a set of interventions encompassing financing at preferential lending rates, upgrading of the skills development programme, a review of the textiles tariff, details of which are still sketchy and the establishment of an illegal imports task team. The industry itself is rationalizing and making the necessary adjustments to see it through the current downturn”, he added by saying.

Fibre2fashion News Desk - India