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CLOTHING INDUSTRY JOB LOSSES CONTINUE

AT LEAST 80 000 jobs have been lost in the local clothing and textile industry over the past six years as companies continue to downsize or close their doors.

Statistics released by the Cape Clothing Association (CCA) last week reveal that nearly 10 000 Jobs are lost in clothing and textiles each year due to a dramatic rise in imports from the Far East as well as “massive trade and industrial policy imbalances” between South Africa and China.

SBH Cotton Mills in Cape Town is leaving 350 people out of jobs as It officially closes its doors this month, while the closure of Seardel’s Frame Vertical Pipeline in July left 1400 people unemployed.

Sans Fibres in Bellvilie and Prilla in Atlantis are among the other companies that have closed shop since the beginning of the year.

Data from the CCA showed nearly SO clothing establishments have ceased to exist in the past year. According to the Southern African Clothing and Textile Workers’ Union, almost 11 000 jobs were lost in the industry between the start of the global economic crisis in October 2008 and March this year, with the multiplier effect causing a staggering 50 000 people to be affected.

Meanwhile the National Treasury is considering a proposal to incentivise local clothing and textile manufacture rs in order to correct the trade and industrial policy imbalances between South Africa and China.

Outgoing CCA chairman Graham Choice said at the group’s 84th annual general meeting last week that the government needed to become “demonstratively more serious about correcting the imbalances between South Africa and China”.

He said: “The brutal truth is that local clothing manufacturers are outsubsidised by the Chinese authorities,” referring to the 70 plus direct and indirect support measures that the Chinese clothing and textile industries receive from Beijing.

Justin Barnes was commissioned by the Department of Trade and Industry to draw up another proposal, which centred on a credit scheme that would provide credits to local clothing manufacturers as they improved production. The credits could be used to buy machinery and would be applied on a pure credit certificate basis.

According to Choice, the proposals for incentives would fall within the rules of the World Trade Organisation, which was still deadlocked over an international trading model at the current Doha round of trade negotiations.

Barnes said he agreed that the government needed to intervene if the industry was to stay competitive.

Iraj Abedian, chief economist of Pan-African Investments, said the incentive proposal was a “falrfy lofty objective” but that the nitty gritty would determine the success thereof.

Stuart Gottschalk, the deputy chairperson of Clotex, the clothing and textile services centre, said the local industry had to come up with a value proposition if it were to stay relevant: “Speed to market quick turnaround times, flexibility and manufacturing to specified customer quality is what we need,” he said.

Source: Business Report – Florence de Vries