Textiles & Clothing SBU Presentation to the

Transcript:Textiles & Clothing SBU Presentation to the:
Textiles & Clothing SBU Presentation to the Parliamentary Committee 5 June 2018 Shakeel Meer Dineo Skwambane Introduction The presentation will take the Committee through overall economic trends affecting the clothing, textiles, footwear and leather (CTFL) industry Highlights of actual funding activity IDC funding case studies within the CTFL sector (textiles and clothing) Overview of non-funding activities CTCP approvals and relationship with SBU funding The SBU works closely with the Clothing and Textiles Competitiveness Programme (CTCP) which is a grant scheme through the dti and managed by the IDC. Sector Specific Challenges Concluding remarks on way forward The CTFL sector (which accounts for 3.3% of overall manufacturing output) was under immense pressure in recent years, with output volumes on a decline over the past three years. A difficult operating environment, weak demand conditions and increased imports, have adversely affected the sectors’ production activities. The textiles sector, in particular, saw its output levels falling sharply over the past decade. All other sectors also witnessed lower levels of production in recent years. CTFL sector: Output levels sharply lower Pressure on disposable income – low retail sales Illegal Imports Exchange rate volatility Eroded equity base due to losses Low appetite of commercial banks to fund industry – more especially clothing (jobs rich) because of low security IDC only funder to provide support to distressed businesses Ageing workforce (especially management) Lack of financial skills (costing) Retailer pressure on margins Fragmented industry Sector Specific Challenges In the face of weak economic conditions domestically, it is critical for the CTFL industries to focus on building lean and agile operations that are able to compete more effectively, both in local and global markets: Improve efficiencies and raise productivity, consolidate where economies of scale are possible; Focus on skills development, up-skilling and multi-skilling to retain jobs; Consider ways to contain operational costs, streamline business processes; Invest in technology, equipment, R&D, innovation; Focus on customer service as a differentiating factor from competitors; Enhance and focus marketing efforts, including export market development; Identify niche market gaps, opportunities for import replacement; Integrate effectively within value chains, contributing to their overall development and competitiveness; Ensure that individual companies and clusters of companies become significantly more efficient and collaborative; IDCs Sector strategy IDC’s strategy: Increase competitiveness through increased efficiencies; Support the lucrative fast fashion and quick response models; Value chain development; Development of niche products; Support development of natural fibres; Support distressed businesses to