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Picture: 123RF/KITZCORNER
Picture: 123RF/KITZCORNER

In response to recent criticism, I would like to provide a real-world, front-seat perspective of the master plan for the retail clothing, textile, footwear and leather (CTFL) sector to showcase what can be done when normally conflicting industry stakeholders work together to try to build the economy (“Staring into the dark cave of ideology”, May 6).

The retail CTFL master plan was signed in 2019 and aims to grow local procurement by retailers to 65% and add about 77,000 new CTFL manufacturing jobs. The first couple of years of the master plan were defined by learning lessons and facing world-class challenges such as the Covid-19 pandemic, increased load-shedding, and the floods and unrest in KwaZulu-Natal.

By the end of 2023, despite extremely difficult conditions, the master plan had achieved a 51% increase in local sourcing by our largest national retailers, which placed 371-million units with the local industry, compared with 246-million in 2019.

The pace of localisation growth is greater than the pace of import growth. In fact, import volumes are dropping. Total volumes of the largest 10 categories of clothing imports declined between 2019 and 2023 compared with the preceding four years. In the case of seven of the 10 largest import categories, the decreases were a significant 10%-35%.

The import unit prices being declared at our ports of entry are also rising, a sign that the SA Revenue Service (Sars) is being rebuilt and is now more effective at cracking down on customs fraud, specifically under-invoicing. The declared import unit prices of nine of the top 10 clothing categories of imports rose by 26%-120% between 2019 and 2023 compared with the preceding four years.

This creates more breathing space in the domestic market for local manufacturers, since they compete against fairer market prices rather than illegally low ones. The outcomes are being felt on the ground too. CTFL manufacturing employment has grown by 22,000 formal jobs since 2019, according to Stats SA’s quarterly labour force survey. These are real and significant victories.

Make no mistake, collaborative value chain development through master plans is hard. There are long-standing fault lines and levels of mistrust running between different parts of the value chain. We all have long lists of grievances about how other stakeholders damaged us in the past. Yet the master plan demands that we do more than shout slogans, point fingers and adopt entrenched bargaining positions while waiting for other parties to make the first sacrifice. We have been asked to accept that while no party will get exactly what it wants all the time, our broader collective gains can be enhanced by working together.

There is a deeply sound logic underpinning master plans. Collaboration is the age-old tool humans use to survive hardship. It is the first principle of society, the strategy that has allowed a vulnerable species to overcome enormous odds and thrive. Humans build their bridges over deprivation, scarcity and suffering with mutual assistance and co-operation.

There is enormous cause to celebrate when a fractious industry is able to overcome decades of intransigent disagreement by creating an innovative, win-win localisation-linked rebate on imported textiles. It has lowered the costs of local production for 82-million garments, while supporting local textile factories.

The master plan has catalysed our government to provide hundreds of millions of rand in investment support for supply-side modernisation. The master plan recently managed to solve a tax challenge on these incentives, effectively freeing more money for investment. It has been working with Sars to fight customs fraud. This included backing Sars in its victorious and ground-breaking case against Dragon Freight, which had its goods seized on suspicion of their being valued illegally low.

The closer working relationship with Sars meant we were able to work with it in 2022 to do something previously resisted by the industry for its destructive trade and price distorting effects: to distribute Sars-seized clothing to help people left destitute by the KwaZulu-Natal floods. The master plan is pushing into other areas too, such as sustainability, textile development and modernisation, skills training, and export promotion and other spheres.

There are obviously still many challenges to be tackled. For instance, the government must still confront the matter of foreign online retail platforms that abuse loopholes in our customs regime to sidestep taxes and undercut local retailers and manufacturers. But we believe we are laying the foundations for success.

This master plan is proof of the wisdom of the reimagined industrial strategy. The government called for social partners to lend their power and decisive actions to reshape the fortunes of our country, and we have been attempting to do just that with the retail CTFL master plan.

• Baard is executive director of the SA Apparel Association and Pillay chairs the Apparel & Textile Association of SA.

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