Non-profit to help push clothing sector to target of 170% increase in jobs
Nicola Mawson
The non-profit Localisation Support Fund (LSF) aims to fast-track growing jobs in the local retail-clothing, textile, footwear, and leather (R-CTFL) manufacturing sector by 172% through helping companies in the industry leverage relationships, improve growth, and become more efficient through technology.
Speaking at an event held at clothing manufacturer Karma Factory in Johannesburg yesterday, the executive head of the LSF, Thami Moatshe, said “South Africa used to have manufacturing, and we lost it. And that led to the sector being deindustrialised.”
Between 2000 and 2008, anywhere between 10 000 to 15 000 jobs were being lost a year, with many factory closures. Moatshe told Business Report that the industry currently provided employment for 121 000 people.
She said the LSF also aimed to help fast-track a Department of Trade, Industry, and Competition (dtic) Masterplan, which seeks to bolster the sector. The R-CTFL value chain generates an estimated 1.7% of gross domestic product (GDP) and accounts for about 14% of all manufacturing jobs.
The department also aims to grow local retail procurement from 45% to 65% or a value of R66 billion. Since the Masterplan’s launch in 2019, 21 000 drops had been created.
The LSF, Moatshe explained, “works with manufacturers to ensure they can be competitive; that they can compete here and also globally.”
Moatshe said there had been various incentives over the years to help the clothing manufacturing sector, including setting tariffs on imports as well as providing funding. Currently, the industry is working against the Masterplan, which is the third phase of supporting the sector.
The Masterplan, finalised in 2019, is aimed at encouraging structural change in the value chain to grow the domestic market, increasing purchases from domestic suppliers, access and grow export markets, and enhance value chain competitiveness. Alongside this, the South African Revenue Service (Sars) will assist with countering the illicit trade.
Sars is implementing a value-added tax (VAT) charge on clothing importers such as those from China, Shein, and Temu from September as an interim measure while it works on the additional implementation of tariffs. The VAT charge will be on top of the current 20% flat rate customs duty.
Moatshe said in addition to increasing revenue and jobs, the sector aimed to increase sales through partnerships with retailers as well as improve competitiveness using technology to increase efficiency.
“This is one of the sectors that had high employment, and you want that employment to come back,” said Moatshe. She also pointed to the fact that Karma, which makes corporate apparel, has benefited from its assistance. “Through this project and other interventions, a factory that was loss-making is now profit-making.”
LSF chairman, Harald Harvey, said the association wanted to be part of creating jobs by helping remove bottlenecks, increase efficiency, and help manufacturers reorganise their operating models.
“We’ve been very below the radar, plugging away, working away at where our theory of change is.”
Harvey added that the sector was disproving naysayers who don’t believe in the sector’s ability. “We can manufacture in South Africa, we can build our supply chain, we can create jobs… The LSF wants to be catalytic,” Harvey said.
Supply chain executive at Karma, Andy Thorvaldsen, said the company had improved efficiency by 10% with the LSF’s help, catalysing what has been an “exciting” growth opportunity.
“We all want to see more product made in South African factories by the hands of South African people. We can change the unemployment picture and impact millions of lives,” he said.
BUSINESS REPORT