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Retailers will move orders offshore due to strike-Palmi, expert

Updated: 2009-9-24 Source: fiber2fashion
Last Tuesday, the South African Clothing and Textile Worker's Union (SACTWU) announced the beginning of an indefinite strike in the textile and apparel sector, to protest against not being given adequate wages, in line with hike in inflation rates.

Meanwhile, the South African textile and clothing sector too is going through one of its worst periods ever seen. Textile units are closing down with amazing regularity as they are not able to meet competition from import of Chinese textiles and clothing.

Fibre2fashion spoke to Mr Renato Palmi, researcher, author and apparel development specialist and also Director of Redress Consultancy, which provides, research, development, advocacy and Publications Company for the South African fashion, apparel and textiles industry sectors. It also conducts socio-economic research and local economic development work.

We began by asking him if the timing of the strike was correct under the current circumstances, to which he said, ¡°In my opinion, this is not the right time, but I also fully understand the concerns of the South African Clothing and Textile Worker's Union (SACTWU) about the low payment and especially the discrepancy in wages between the metro (city) and non-metro (out-lying area) however to embark on a strike now I think is going to do more harm in the long-term¡±.

He said, ¡°The long term consequence will be detrimental for the industry and I understand that the union is concerned about the low wages and that they are following the mandate of their members but any victory by the union will be short lived and overshadowed by the long term negative impact on the industry and consequently on the union's members. I think the options for the manufacturers are: (a) wait out the strike (b) retrench and restructure (c) move into the informal sector which is unregulated¡±.

He added by saying, ¡°The ongoing strike is already have an effect on small business who are having to go back to their clients to inform them that they cannot meet delivery dates and the larger retailers that dominate the industry in South Africa will simply move their orders off-shore if local suppliers cannot deliver on time."

To another question on the actual reasons for the downfall of this very promising sector in South Africa, he explained by saying, ¡°The reasons are numerous. Most of the industry blames cheap imports, however, records and research shows that cheap imports have always played a role in the South African apparel industry sector and it was assumed that implementation of the quotas on Chinese imports which has now ended would help the industry to restructure.

¡°The quota period was too short and it was implemented without any feedback from the stakeholders from certain sub-sectors of the industry and there was little policy as to how the industry could take advantage of this period, but again, the entire blame, however, cannot all be laid at the government's door as there was little initiative from within the industry to invest or restructure their production facilities.
¡°Another reason is the lack of a cohesive developmental plan for the industry. The industry is extremely fractured with different sub-sectors pushing their own agenda. The unions are extremely strong, and with the high cost of labour, the unskilled workforce and the unreliability and the high absenteeism rate amongst workers, have made the industry globally uncompetitive. Having said this, it seems that government and industry are working closer to formulate proper policy and a large amount of funds have been allocated to be injected in the industry.

¡°My concern is that certain sectors of the industry are now chasing the money and within government itself there are not enough qualified people to manage this project and they are pushing their own agenda within the provincial space, which clearly indicates favouritism. Another reason is the lack of knowledge about the importance of the industry for South Africa by the consumers and ¡®The Buy Local¡¯ initiative is a dismal failure, along with which there is also massive fraud taking place in the industry, like illegal imports and under invoicing¡±.

Next we asked him, as to what according to him, should the government and industry do, to revive the lost glory, to which he replied by saying, ¡°Even though it seems that the industry is in a state of confusion there is hope and so much potential for the industry. The key in my opinion is for the industry to work as a collective for the single goal of growing the industry to what it once was ¨C to work in collaboration with the union to find middle ground and to work with the government.

¡°We also need more qualified people within the government who are dealing with this sector and since, it is an extremely complex industry and to just have government officials responsible for the reshaping and development of new policies will not work for which a closer collaboration with the apparel sector and the fashion sector is needed.

¡°A fundamental area is the development of skills. At the moment most school leavers who wish to enter the industry are lured to the fashion side because they see it as glamorous and while we see intake in this sector we see little intake into the important sector of the industry, which is the manufacturing side of textiles and apparels¡±.

To conclude the interview, we asked him whether the demands of the unions would be met and if not what would be the next course of action, to which he optimistically replied by saying, ¡°The strike will soon be entering its second week and it seems that it is deadlocked and the main area that is preventing any further movement relates to the question of payment for absent workers and I hope for the sake of the collective that an agreement can be found soon¡±.