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NEWS & RESEARCH FROM THE AFRICAN CONTINENT
(#6 / 2018 - 24 April 2018)
www.africantextilesandapparel.com
In 2016 South Africa's global textiles and apparel (HS50-63) exports were worth US$1.1bn
In 2016 South Africa exported US$357.6m worth of raw/semi-processed wool and mohair (HS51) - mainly to China
In 2016 South Africa's global garment (HS61-62) exports were worth US$383.4m. >70% went to Namibia, Botswana, Lesotho and eSwatini
 
NEWS
ANGOLA - COTTON PRODUCTION TO FEED TEXTILE MILLS, 18 April 2018
The Angolan government wants China and Japan to support it to re-launch cotton production in parts of the country. The effort is part of the Angolan government’s initiative to urgently diversify the economy - which is still dependent upon the export of crude oil. READ HERE >>
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Comment
Since 2010 significant development funding has gone into the resuscitation of Angloa's textiles and apparel industries. Much of the country's industry was destroyed in its civil war, and during South Africa's invasions in the 1970s and the 1980s. Much of this development assistance has come from the Japanese government. In 2010 the Japanese Marubeni conglomerate was contracted to "rehabilitate" (more likely completely overhaul) three domestic textile plants located in: Luanda (the Nova Textang II plant - US$230m to overhaul), Benguela (the Alassola plant - US$450m to overhaul), and Dondo (the Satec plant - US$420m to overhaul). All phases of the refurbishments were apparently completed in 2015 with the plants commencing operations in the same year. For some plants the lint used has been imported from from Greece and India. The fact that some lint is imported into Angola partly explains why the Angolan government is now interested in expanding cotton production.

The types of products made in these Angolan plants include: yarns, fabrics, clothing home textiles, blankets. It has been reported that some of the Angolan produced cotton yarns are being exported to Europe - mainly to Portugal. Another Lusophone African country, Mozambique, has in this decade also revitalised a cotton spinning plant (the old Riopele Textiles now called Mozambique Cotton Manufacturers) and this is now exporting cotton yarns to Europe (again to Portugal). Its interesting that other Southern and Eastern African countries (such as Tanzania, Zambia and Malawi) which have an abundance of cotton have not developed and then rolled-out focused strategies which would revitalise some of their existing spinning facilities with a view to exporting yarns to Europe.

ZIMBABWE - MERLIN LIQUIDATOR SELLS ASSETS, 19 April 2018
The liquidator of the Merlin Textile Company has filed an application so as to allow him to dispose of non-core and obsolete assets in order to raise additional working capital for repairs and ongoing maintenance work. READ HERE >>


BURKINA FASO - COTTON SECTOR SUPPORT, 19 April 2018
Burkina Faso will disburse US$27.4m (CFA14.614bn) to develop the cotton sub-sector.
The funds will be used to “restore operators’ solvency and facilitate access to inputs for the 2018-19 campaign”. The funding comes at a time after cotton production dropped to 553,000t in 2017/2018 against 683,000t harvested in the 2016/2017 season. READ HERE >>


ETHIOPIA - PVH WATER CONSERVATION PROJECT, April 2018
The PVH Corporation has announced a three-year partnership with the World Wildlife Fund (WWF) to support water stewardship efforts in key sourcing destinations. Under the new agreement PVH and the WWF will work together to help conserve freshwater resources in Ethiopia’s Lake Hawassa and India’s Cauvery River basins. PVH will lead the company’s water stewardship efforts in Hawassa, Ethiopia. A PVH joint venture is an anchor tenant in the newly constructed Hawassa Industrial Park, and the partnership with the WWF will leverage existing collaborative efforts with the Deutsche Gesellschaft für Internationale Zusammenarbeit’s (GIZ) International Water Stewardship Programme (IWaSP), to make positive impacts on water sustainability beyond the park fences. READ HERE >>
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Comment
As we all know there are clear linkages between what happens in a manufacturing facility and what happens in adjacent regional / national / cross border environments. PVH must be commended for its efforts. Going forward, as a matter of urgency, stakeholders in the Hawassa Industrial Park, should they wish to preserve their green credentials, must find an appropriate landfill solution in order to dispose of the sludge wastes that are the residues from the on-site Hawassa industrial water treatment plant.


TANZANIA - A-TO-Z TEXTILE MILLS, MARCH 2018

A-to-Z Textile Mills is a remarkable example of how African manufacturing can flourish. A locally owned, diversified, vertically integrated firm with over 7,000 employees, it produces and supplies a large volume and range of goods (knitted garments; impregnated mosquito nets) to domestic and regional markets. The firm also takes substantial social and environmental responsibility. A-to-Z has its own recycling plant, housing, childcare and provides daily meals to its predominantly female workforce. It demonstrates how large manufacturing firms can also make a significant development impact. READ HERE >>


AFRICA – TRANS PACIFIC PARTNERSHIP, 12 April 2018
In early April 2018 the President of the United States (PUSA) hinted that the Trans Pacific Partnership (TPP) free trade deal would, with some amendments, be something he may be prepared to sign-up to. READ HERE >>
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Comment
Of course anything is possible when it comes to the thinking (or otherwise) of the current PUSA.

If the US were to sign-up to the TPP it may present significant difficulties for sub-Saharan African (SSA) clothing manufacturers that export to the US – especially if there are no changes to the existing textile and apparel provisions of the trade deal that the US walked away from in 2017. Countries such Lesotho, Swaziland, Tanzania, Madagascar and Ethiopia could lose major elements of their garment industries.

From a textile and clothing point of view Vietnam would be a huge winner; Vietnam is a clothing manufacturing miracle. In 1997 its garment exports to the US were US$25.7m and in 2017 they were US$11.4bn. Vietnam manufacturing units are known for their productivity; and the fact that they already have established significant textile manufacturing capacity would mean that they would be able to meet with the textile and apparel rules of origin contained in the TPP agreement – now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11 - for the eleven countries signed it). It is known that many foreign investors in SSA AGOA eligible countries have already explored options of establishing garment manufacturing plants in Vietnam.


ETHIOPIA - HIGH STAFF TURNOVER IN INDUSTRIAL PARKS, 15 APRIL 2018
"Lower Salaries Put Industrialists in Muddle" - For a country [Ethiopia] accommodating more than a hundred million peoples, providing job opportunity for the youth is not easy. ... She works for eight hours a day at JJ Textile Factory, earning a 750Br [US$27] gross salary and 300Br [US$11] additional lunch allowance. ... During the first half of the current fiscal year, Hawassa Industrial Park (HIP), lost close to 4,470 workers [and] over 7,840 workers left their jobs at Bole Lemi Industrial Park. READ HERE >>
(not a very well written piece - obviously not written by an English speaker - but it contains some valuable insights.)
 
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FEATURE
SOUTH AFRICA
CLOTHING SECTOR WAGE NEGOTIATIONS IN SOUTH AFRICA

Substantive wage negotiations for South Africa’s clothing industry (including the millinery and knit-to-shape sub-sectors) have commenced. The first round of negotiations took place in Cape Town on 18-19 April 2018. The new agreement will become effective with effect from 1 September 2018 – the agreement will cover minimum wages and working conditions for a period of 2 years until 31 August 2020.

The next rounds of negotiations, which fall under the auspices of the National Bargaining Council for the Clothing Manufacturing Industry MORE HERE >>, are scheduled to take place on 16-17 May 2018; and, then the final round on 13-14 June 2018.

The trade union party to the negotiations is the Southern African Clothing & Textile Workers’ Union (SACTWU); the employer parties are the Eastern Province Clothing Manufacturers’ Association (EPCMA), the Transvaal Clothing Manufacturers’ Association (TCMA), the South African Apparel Association (SAAA), the Apparel & Textile Association of South Africa (ATASA), and the South African Clothing Manufacturers' Association (SACMA).

In summary SACTWU’s demands are:
  • for the first and also for the second year of the agreement a minimum increase of R150 or 15% whichever is the greater
  • a narrowing of the gap between metropolitan and non-metropolitan wages from 75% to 80% (Editor Note: South Africa has a dual system of minimum wages. Non-metropolitan areas' minimum wages are generally pegged at 75% of the wages of the main metropolitan areas)
  • a reduction in the amount of working hours worked by employees engaged in non-metropolitan areas from 45 hours per week to 43 hours per week with no loss of pay
  • a minimum annual bonus of two weeks wages
  • a one day increase in the amount of annual family responsibility leave; a minimum of 10 days paid paternity leave; and all union shop stewards should be granted an additional three days paid time off to enable them to attend trade union matters
  • a reduction in the number of working months it takes for a sewing machinist to be deemed to be qualified.
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South Africa is not the only country in Southern Africa where minimum clothing sector wages are being adjusted. Wages have recently been adjusted in eSwatini (formerly Swaziland); while the Lesotho government is deliberating a new set of minimum wages for the Lesotho textile, apparel and footwear industry.

Below is listing of the minimum wages that should be paid to qualified sewing machinists in various Southern African countries. To allow for easier comparison wages to be paid have been converted to a cost per hour basis.

Botswana – there are no statutory minimum wages prescribed for clothing workers, there only exists a single category minimum wage for workers engaged in “manufacturing”; with effect from 1 November 2017 the minimum hourly wage is Pula:5.79 (US$0.60).

Lesotho – for a “trained machine operator with more than 12 months experience with the same employer”; with effect from 1 April 2017 the minimum hourly wage is Maloti:7.47 (US$0.62).

eSwatini – with effect from 1 March 2017 the minimum hourly wage is Lilangeni:8.60 (US$0.71). It is rumoured that the wages were increased by about 8% backdated to 1 March 2018 (Editor Note: the new gazette formalising the increases still has to be publis. The new hourly minimum wage will be approximately Lilangeni:9.29 (US$0.77).

South Africa – a multitude of different minimum wages exist for select geographic areas of the country. For ease of comparison the minimum hourly wage for a qualified sewing machinist in the “Metropolitan” area of Cape Town is Rand:27.94 (US$2.31); for workers in the “non-Metropolitan” area of Newcastle the minimum hourly wage is Rand:18.63 (US$1.54).
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Comment
In some countries in sub-Saharan Africa the issue of minimum wages is the subject of intense debate.

In South Africa draft legislation, relating to the introduction of a single national minimum wage for the country (that would also cover textile and apparel workers), is currently at an advanced stage of development. Its passage through its parliament is proving to be difficult.

In Ethiopia the International Labour Organisation (ILO) has undertaken a national minimum wage study (research commissioned in October 2017), as part of its “Improving Industrial Relations for Decent Work and Sustainable Development in the Textile and Garment Industry” project. The broader three year project (2016-2019) is funded by Sweden, through Swedish International Development Cooperation Agency (SIDA) and the giant H&M retail chain (which currently sources garments made in Ethiopia); and is implemented by the ILO in collaboration with Ethiopian Ministry of Labour & Social Affairs, the Ethiopian Ministry of Industry, the Confederation of Ethiopian Trade Unions, and the Ethiopian Employers Federation.

Ethiopia has no system of minimum wages – although the Ethiopian Investment Commission (EIC) was (a couple of years ago … and perhaps it still is) informally punting that the country’s minimum wage is about US$26 a month. The fact that the country does not have a statutory minimum wage has not stopped retailers / brands – including H&M – from claiming that there is one and that they are paying well above it! Ethiopia's low wages have been primarily responsible for attracting a large number of investors to set-up textile and garment manufacturing operations in Ethiopia; and for brands/retailers to start to invest heavily in sourcing operations in the country.

It other global developments the national minimum wages debate is heating-up. A recent (April 2018) working draft of the World Bank’s “Global Development Report” is, apparently, proposing lower minimum wages and greater hiring and firing powers for employers as part of a wide-ranging deregulation of labour markets deemed necessary to prepare countries for the changing nature of work. READ HERE >>

Years ago the World Bank used to use a “difficulty of firing” workers as one of the indexes that measured the difficulty of doing business in any country. It dropped the index after considerable pressure - although it (some may say mischievously) still hid a range of labour market issues as an annex to its methodology. READ MORE >> It is currently rumoured that certain of the World Bank’s principle financial contributors may be requesting that the Bank reduce its staff salary bill by 20%. READ HERE >>. It will be interesting to see how World Bank staffers deal with the issue of their own salaries (many of whom earn un-taxed salaries) being reduced; or if some of their contracts are prematurely terminated - no doubt staff association membership will rise; and lawyers will also be consulted!
 
FACT OF THE WEEK
SUB SAHARAN AFRICA'S APPAREL (HS61-62) EXPORTS TO THE US
JAN-FEB 2018 COMPARED WITH JAN-FEB 2017
Source: Dataweb; US International Trade Commission (USITC).
  • Kenya's largest export items to the United States (US) are mainly mens/womens/boys/girls woven denim jeans falling under HS6203 and H6204. Thus far in 2018 (January and February) it had exported almost US$30m worth of these products to the US.
  • Lesotho's biggest export items to the US are womens' (stretch) pants categorised under HS6104. In the first two months of 2018 it exported garments worth about US$12m (up 63.7% over the same period in 2017). Lesotho's production of these items is going to be significantly ramped-up in 2018 due to two new manufacturing plants coming on stream (both owned by the Nien Hsing Textile's group).
  • South Africa's largest US export item are high value socks - items mainly used by professional/serious athletes (HS6115.96). In 2017 South Africa exported US$5.3m worth of socks to the US. In January and February 2018 South Africa had already exported US$773k worth of socks to the US - up 33.6% over the same period in 2017. Most of these socks are made at the Cape Town based Falke facility (LEARN MORE >>).
  • The collapse in Botswana's US apparel exports can be attributed to the fact that one of its major exporters - Carapparel - moved the remainder of its Gaborone manufacturing operations to Lesotho in the second half of 2017.
 
RESEARCH & REPORTS
Program for Expanding [Nigerian] Apparel Exports”. Ben Coes, Emmanuel Odonkor. February 2017. Arlington, United States. Prepared for the USAID funded West Africa Trade & Investment Hub by JE Austin Associates.
Synopsis: This paper is the outcome of a technical assistance intervention of the West Africa Trade & Investment Hub wherein it offered advice to select Nigerian apparel producers, and to the Nigerian authorities. The specific objectives of the exercise was to: i) provide technical assistance to select apparel producing firms in Nigeria (Crown Natures, and Sam & Sara) in order that they could participate in Sourcing@Magic Trade show; ii) to follow up on the WATIH’s apparel value chain specialist’s assessment of the textile sector in Nigeria, and, iii) to define a strategic approach to encourage the Nigeria Government to support identified apparel and textile manufacturing factories. The full report can be found HERE >>.

Program for Expanding Apparel Exports”. Joop de Voest. October 2014 to March 2015. Bethesda, United States. Prepared for the USAID funded West African Trade & Investment Hub, and African Partners Network by Abt Associates.
Synopsis: These technical trip reports provides a brief overview of value chain production units in Ghana, Côte d'Ivoire, and Benin. The reports can be found HERE >> and HERE >> / HERE >> and HERE >>.


"Cote d'Ivoire: Cotton and Products". US Department of Agriculture – Foreign Agricultural Service. April 2018. Dakar, Senegal.
Synopsis: In the cotton marketing year 2018/19 cotton fiber production in Cote d'Ivoire rose to 725,000 bales (480lb.) based on steady yield increases and the anticipation of continued government price supports for growers. In the marketing year 2018/19 exports are projected at 650,000 bales to reflect increased domestic supply and growing global demand. Local use remains limited. Indications from the current year’s crop are that the quality of Ivoirian cotton continues to improve, with an estimated two-thirds of the crop considered first-quality. This is partially due to seasonal variables, but after years of neglect during recurring political crises, a cotton sector which was once one of the region’s most productive and quality-conscious is currently experiencing renewed interest and investment. The report has a small section dealing with textile (spinning) production in Cote d’Ivoire READ HERE >>.
 
UPCOMING EVENTS
  • Africa Occupational Safety & Health (A-OSH) - Trade Show - 22-24 May 2018. Johannesburg, South Africa. For more information: www.aosh.co.za
  • Source Africa - Trade Show - 20-21 June 2018. Cape Town, South Africa. For more information: www.sourceafrica.co.za
  • 14th Symposium of the Southern & East Africa Cotton Forum - Workshop - 4-6 July 2018. Harare, Zimbabwe. For more information: SEACF
  • Apparel Sourcing New York - Trade Show - 23-25 July 2018. New York, United States. For more information: www.apparel-sourcing-usa.us
  • Sourcing at Magic - Trade Show - 12-15 August 2018. Las Vegas, United States. For more information: www.ubmfashion.com
  • International Textile Manufacturers' Federation (ITMF) - Annual Conference - 7-9 September 2018. Nairobi, Kenya. For more information: www.itmf.org
  • Origin Africa – Trade Show - 9-11 September 2018. Nairobi, Kenya. For more information: www.originafrica.org
  • Apparel Sourcing Paris - Trade Show - 17-20 September 2018. Paris, France. For more information: www.apparelsourcing.fr.messefrankfurt.com
  • Africa Sourcing & Fashion Week (ASFW) - Trade Show - 1-4 October 2018. Addis Ababa, Ethiopia. For more information: www.asfw-online.com
  • Textile Exchange Sustainability Conference - Annual Conference - 22-24 October 2018. Milan, Italy. For more Information: www.textileexchange.org
  • Destination Africa - Trade Show - 17-19 November 2018. Cairo, Egypt. For more information: www.destination-africa.org
  • ATF Expo - Trade Show - 20-23 November 2018. Cape Town, South Africa. For more information: www.atfexpo.co.za
  • 77th Plenary Meeting - International Cotton Advisory Committee (ICAC) - Annual Conference - 2-7 December 2018. Abidjan, Ivory Coast. For more information: www.icac.org
 
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about Mark Bennett - Editor
"The African Cotton, Textiles & Apparel Monitor"
I have almost 30 years' experience working in Africa's cotton, textiles and apparel value chain. Initially I was, for 15 years, a sector trade unionist in South Africa; then, from 2004 onwards, I worked as a development consultant for various Southern / Eastern African governments, and domestic private sectors. In my development activities I have been engaged by private sector foundations, and by DFID and USAID funded contractors. I find it rewarding creating development interventions that help cotton, textiles and apparel stakeholders to better processes, improve productivity, increase sales and add investment. See my full CV at Devex or LinkedIn.
 
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