The local clothing industry had shrunk by 20 percent in the past three years and job losses had been estimated at 29 500 between 2007 and 2010, the Southern African Clothing and Textile Workers’ Union (Sactwu) said yesterday. On average, five factories closed every month before the government’s intervention to stabilise the industry in 2009.
Even though the situation has stabilised, with the actual shrinkage in the past two years being only 8 percent, clothing manufacturers paint a picture that the stability observed since 2009 will not last long if “the opposition” is not looked at.
Although employers and unionised labour sat at opposite ends of the table during the negotiations and the agreement signing yesterday, they both said cheap imports from China were the opposition.
Ralph Roytowski, the president of the Apparel Manufacturers of SA, said although the weaker rand should be boosting the local clothing industry by discouraging imports, illegal imports from China and under-invoicing were not helping local manufacturers to compete.
Rand weakness has pushed up their input costs as over 80 percent of the industry’s raw material is imported.
“We are going to take some sort of a hit in the next four to six months… The cost of all raw materials will affect the cost of items we produce in our factories,” he said.
Last week the SA Revenue Service (Sars) named clothing, textile, leather and footwear as strategic economic sectors and announced that it was in the process of reviewing and modernising existing customs and tax regulations to protect the local industry’s competitiveness. It would seize illegally imported goods and implement maximum penalties.
The local manufacturers and Sactwu have pinned their hopes on the Sars initiative, as employers fear they will be in a worse position when input costs start affecting the price of the manufactured goods, while imports remain cheap.
The DA’s premier candidate in Gauteng, Mmusi Maimane, and its transport spokesman, Ian Ollis, visited small business owners in Vusimusi, Thembisa, yesterday to discuss the impact that e-tolling would have on their businesses and lives.
The owner of the Big Eleven, a grocery trading store, and the owner of a small butchery in the area get their deliveries via the R21, where e-tolls are supposed to be implemented.
“They will be forced to increase the price of their goods due to the higher cost of deliveries, or lose money and possibly even their businesses,” Maimane said. This would affect the community around them, which was already battling with high levels of unemployment and poverty.
“The inevitable price increases will make it harder for families to buy the food needed to get by every month.”
Maimane said the SA National Roads Agency Limited (Sanral) proceeded with the e-tolling project aware of its negative impact. “I can reveal today that Sanral knew from as early as 2009 that they were facing widespread opposition against e-tolling on Gauteng freeways. This is according to documents received recently by the DA following a Promotion of Access to Information Act (PAIA) application by… Ian Ollis.”
According to the documents, a question was posed to gauge public acceptance of e-tolling as part of Sanral’s initial market research. The question asked: “The envisaged tolls… will be automated. There will be no toll stations. Payment will be collected automatically. If there were two extra lanes on the freeways you normally travel on, saving you time, would you be prepared to pay a toll?”
The first figures showed that 39 percent were against. This jumped to 48 percent in a subsequent amended document.
Maimane said Sanral had known all along that the people of Gauteng opposed e-tolling. If he became premier, he would “do everything possible to get rid of e-tolling”. Now there is a thought!
What can $130 billion (about R1.3 trillion) do in South African terms? This is the amount Verizon is expected to pay the UK’s Vodafone for its stake in their joint venture, the largest cellular carrier in the US.
It can pay for the entire South African government’s budgeted expenditure of R1.1 trillion over the 2013/14 fiscal year and still leave change. In fact, if that money was loaned to its subsidiary Vodacom, the latter could buy out rival and African telecoms giant MTN, almost three times over based on the latter’s latest market capitalisation of R341.24bn.
What Vodafone will do with its $130bn windfall has stirred much speculation. But the firm and its local unit Vodacom were loathe to comment yesterday.
A possibility is that Vodafone, which has been rebranding handsets and devices produced by its suppliers, which include ZTE and Huawei, to its own branding for commercial purposes, could upgrade its investment in research and development to manufacture its own range of equipment, according to technology guru Arthur Goldstuck.
“This deal alone is worth more than the market capitalisation of some of its suppliers,” Goldstuck added.
Chinese device manufacturer ZTE’s market capitalisation as captured by Bloomberg yesterday was $69.3bn.
The alternative was for Vodafone to grow in Africa, where MTN operates in 22 markets across Africa and the Middle East compared with Vodacom’s five markets.
Katja Ruud, the research director for mobility at Gartner, pointed out that Vodafone’s two recent acquisitions of a cable company in Germany and another in the UK underlined a suspicion that the firm is increasingly diverting its strategy towards triple-play – the provision of internet, television and telephone over a single broadband connection. Whether this will filter to Vodacom remains to be seen.
But all this talk of money has also made Vodafone, a global giant, the sitting duck for a possible takeover from another leading US telecommunications firm, AT&T – if rumours are to be believed.
Edited by Peter DeIonno. With contributions from Londiwe Buthelezi, Donwald Pressly and Asha Speckman.