DTI helps textile industry soar

The Department of Trade and Industry's incentive programme has helped hundreds of companies maintain or create much needed jobs.

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Cape Town - The Department of Trade and Industry (DTI), through its incentive initiative, has helped hundreds of companies maintain or create much needed jobs – especially in the clothing and textile industry.

The sector has lost thousands of jobs over several years mainly as a result of cheap imports flooding the market.

Bobby Fairlamb, general manager of Cape Union Mart’s K-Way factory, said the department has since 2007 offered incentives for the industry in the form of its Production Incentive Program (PIP) and Competitiveness Improvement Program (CIP).

“These programs have injected some much needed capital equipment funding into the industry and enabled K-Way to purchase some new state of the art machines and equipment,” he said.

Fairlamb said as a result of the new equipment the business had increased revenue by 102 percent, operational profit by 20 percent and its expenses as a percentage of revenue decreased from 10.1 percent to 9.7 percent. Machine downtime decreased from 2.1 percent to 1.6 percent, while absenteeism decreased from 4 percent to 3 percent.

Fairlamb said K-Way has since 2006 effectively created more than 200 jobs, including outsourcing through cut, make and trim operations which result in a growth in job creation of more than 130 percent.

Yesterday, Minister of Trade and Industry Rob Davies visited The Foshini Group’s (TFG) Prestige Clothing Factory in Maitland and local shipbuilding company Damen Shipyards Cape Town.

The purpose of the visit was to assess the impact of the financial support some of the companies the DTI has funded. Davies also wanted to assess companies to measure potential for growth and to what extent they needed funds from the department.

The visit also served as a platform for the sharing of information and ideas on the contribution of beneficiaries of incentives offered by the department’s objectives, including the creation of employment, industrialisation, economic growth and the creation of black industrialists.

Group director Martin Mendelsohn said TFG had been investing in the local supply chain through its Quick Response initiative for the last six years.

Mendelsohn said the company established a cluster with key strategic partners and local manufacturing partners, jointly funded by the TFG and the DTI, through the department’s incentive initiative.

He said one of the key partners was Prestige Clothing and together they had built a world class manufacturing facility with the help of the department’s initiative programme.

“Today we have a facility that supplies a significant portion of TFG’s apparel requirements. We are extremely appreciative of government’s investments in the apparel industry in South Africa and look forward to working with them to try and resolve the constraints within the fabric and textile industry,” he said.

He said the Maitland facility employed 560 people who were provided with “significant” training.

Camillo Torino, Prestige Clothing’s head of manufacturing, said the company was assisting 22 beneficiaries with debt relief and had managed to bring down the number of garnishee orders from 62 to 29, while the factory also had the lowest rate of absenteeism in the industry.

Andre Kriel, general secretary of the Southern African Clothing and Textile Workers Union (Sactwu), said: “The national government’s incentive support programmes have been a significant and welcome contribution towards the stabilisation of our industry.”

Sactwu’s Etienne Vlok said there was a convergence of negative factors that helped to push the local clothing and textile sectors into decline in the early to mid-2000s.

“However the primary reason was the unnecessary and unreasonable very rapid scaling down of import duties on clothing and textile products in the late 1990s and early 2000s. Presently there are a number of factors which are contributing towards the stabilisation of the clothing and textile manufacturing sectors,” he said.

Vlok said these factors made for a better environment for the sectors and government incentives were playing a crucial role.

“They are designed to assist manufactures to address some of the structural challenges around competitiveness and production. In other words they enable manufacturers to invest in modernising the machinery, production processes and other components of production.”

Vlok said the latest employment numbers confirmed the positive impact on the industry and showed a small growth in clothing, textile, footwear and leather (CTFL) jobs.

He said according to Statistics SA’s Quarterly Employment Survey, there had been a year-on-year increase of 1.5 percent in formal CTFL employment from March last year to March this year. In the quarter December last year to March this year, CTFL employment also increased by 1.5 percent.

“This is a small increase but important because during the same period, formal manufacturing jobs decreased by 1.3 percent and it is a significant turnaround from the job losses seen in the mid and late 2000s. In 2003, Statistics SA showed 14 000 formal CTFL jobs lost and in 2005, 15 600. At the 400 plus companies supported by government’s incentive, we believe employment to have stabilised even more.”

joseph.booysen@inl.co.za

Cape Argus