Non-compliant clothing factories say cluster grant is a waste
Factories that do not comply with the minimum wage for workers in the clothing and textile industry have criticised the government’s R200 million grant towards the formation of a national cluster, saying it is further wasteful expenditure.
This follows the announcement last week by the Department of Trade and Industry that it would fund the formation of the Southern African Sustainable Textile and Apparel Cluster. The body will help to build and improve the industry’s value chain, and drive competitiveness in the domestic clothing and textile sector.
The cluster’s manager, Heinrich Schultz, said that at the end of the initial five-year plan, the industry should have created between 7 000 and 8 000 jobs, as well as seen the active participation of about 600 newly formed small, medium-sized and micro enterprises.
The plan should create additional product sales of about R7 billion, he added.
Companies represented by the United Clothing and Textile Association (Ucta), which employ about 20 000 people, will not benefit from the fund as they do not comply with wages set by the national bargaining council for the clothing manufacturing industry.
Ucta chairman Ahmed Paruk said firms that did not comply would never benefit from government funding, but that was not Ucta’s main concern.
“Our main worry is that even if we were to receive the government’s funding, we would never be able to afford to pay the required wages,” he said.
Ucta believed that workers should be paid according to their productivity, a suggestion the Southern African Clothing and Textile Workers Union (Sactwu) would never accept.
“Unless this can be done standard wages remain expensive for our members and they will not survive even with the government’s help,” he said.
Ucta’s deputy chairman, Alex Liu, said grants would not make the industry self-sustaining. The Trade and Industry Department had spent about R1 billion in funding programmes, but those funds had only reached a small part of the industry.
“One must ask what is the purpose or the benefit of these funds because they are not creating self-sustainability in the industry. If we continue to depend on government funding we might as well close shop because it means we will never be able to gain the momentum on our own as an industry.”
The executive director of Apparel Manufacturers of SA (Amsa), Johann Baard, said the formation of the national cluster was a further significant step in the quest to make the domestic apparel sector internationally competitive.
He added that this would place the sector on a more sustainable growth trajectory. The key challenge remained cheap imports from south-east Asia, both illegal and legal, and growing informalisation of the industry, seen in the growing footprint of non-compliant factories.
Baard said Amsa, the biggest employer body in the sector, was in intensive consultations with the state and the trade union to find a solution to the duty relief on imported fabrics.
“Fabric is our single biggest manufacturing input cost and it is critical that this be placed on a cost competitive basis, failing which we will continue to suffer significant cost disadvantages with the consequent prejudice to job security and job creation.”
He said the key area of fragmentation lay in sub-sectors of the apparel value chain between textile mills, clothing makers and clothing retailers.
“It is in this value chain context that the newly established cluster could deliver some historic outcomes in respect of a common vision and operational projects with win-win outcomes for everyone in the apparel value chain.”