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South African cluster proposal raises hackles

South Africa is working toward a textile and apparel cluster. The cluster aims at building and improving the industry’s value chain, and driving competitiveness in the domestic clothing and textile sector. It’s expected to create 7,000 to 8,000 jobs and have the active participation of about 600 newly formed small, medium and micro enterprises.

However, only those companies which comply with wages set by the national bargaining council for the clothing manufacturing industry will be represented in the cluster.  The United Clothing and Textile Association (UCTA), which employs about 20 000 people, does not comply and so will not benefit from the cluster.

UCTA says the formation of a national cluster will lead to further wasteful expenditure. It believes that workers should be paid according to their productivity, a suggestion the Southern African Clothing and Textile Workers Union (SACTWU) would never accept. UCTA says grants would not make the industry self-sustaining and that funding programs had reached only a small part of the industry.

The key challenge for South African industry is cheap imports from Southeast Asia and the duty on imported fabrics. Since fabric is its single biggest manufacturing input cost it is critical that this be placed on a cost-competitive basis. Another problem is fragmentation in sub-sectors of the apparel value chain between textile mills, clothing makers and clothing retailers.