Johannesburg - The clothing and textile sector was starting to see improvements from the procurement of uniforms, linen, protective wear and other products by government departments, as the local procurement accord took shape, industry players said yesterday.
The accord, signed in October 2011, is intended to commit businesses, labour, the government and communities to a partnership to increase domestic procurement and support local manufacturing capacity with the hope of creating 5 million jobs by 2020.
The government, through the Department of Economic Development, has put preferential procurement regulations into place and identified products such as bus bodies, power pylons, clothing, textiles and footwear, among other items, to be sourced locally.
At the Southern African Clothing and Textile Workers Union’s (Sactwu’s) bargaining conference declaration early this month, the union called for the government to strengthen the “buy local” and “Proudly South African” campaigns with a special focus on ensuring compliance by provincial and local governments.
This should be accompanied by the government’s directive that all clothing, textile, footwear and leather goods purchases are made locally. Sactwu’s researcher, Simon Eppel, said by and large there had been growth of localisation by the government, but there was still a long way to go.
Massive potential was also identified in the corporate sector, which could procure for the cleaning, construction, private health and hospitality sectors, among others. “We are talking in excess of 1.5 million employees who require some kind of protective wear and work wear,” Eppel said.
Sactwu does not believe that the corporate sector procures locally and has not necessarily seen any improvement. The government has over 700 public institutions and the union was only able to track down about 270 departments to see if they complied.
“We have seen some significant successes from the state enterprises, but there is still some room for improvement.”
However, the union was concerned about tenders in many departments, particularly the Department of Health. It estimates that the public health-care sector could procure textiles and clothing worth about R1.5 billion.
Municipalities were also suspected of still importing some products.
Textile companies in KwaZulu-Natal said they were experiencing significant improvements on national government procurement of uniforms, linen and other textile products.
Imraan Bux, a director at Imraan Textile Mills, which manufactures wool, textiles and fabrics, said although it had taken about a year for the accord to kick in, his company was finally receiving orders from the Department of Health and Department of Education.
Bux said the accord was only being fully implemented this year because people had already placed orders for the first half of last year.
“In the later half of 2013, we saw the programme starting to work, and we got more enquiries, but more orders came in the first quarter of this year,” he said.
His Imraan Textile Mills had received work from departments such as KwaZulu-Natal Department of Health and Department of Education, which was stocking up on uniforms for disadvantaged pupils.
Bux said the only challenge facing mills was related to capacity stemming from loss of capacity from factory closures in the past years.
“We need to recreate some of that capacity, hopefully the demand [from government departments] will recreate that capacity,” Bux added.
He said it was also unusual for textile mills to be busy in the first quarter of the year.
“Two things are keeping us busy, it is the local preferential procurement programme and also the weak rand which has pushed a lot of retailers to order locally.”
He believed that this new wave in the industry would trickle down to the entire value chain, including companies that transported these goods. In the past two years, Imraan Textile Mills increased employment by 20 percent. Another textile company, Gelvenor Textiles, said it had been receiving queries from national departments, especially those under the Treasury.
Gelvenor Textiles chief executive Dickey Coetzee said although there was still a long way to go, his company was starting to receive orders from the SAPS, Armscor and the Department of Health.
“That’s a lot of requirements that are coming through but we find that they are mainly coming from state-owned companies,” he said.
Coetzee observed that there were no orders coming from national and provincial government departments.
He believed that most of the tenders from hospitals were still being awarded to traders who used imports.
However, Coetzee said local orders of fabrics and other textile products were significantly better than they had been a year ago. “The level of interest and commitment is much higher than previously, but we still do not have full commitment,” he said. The other problem was that a lot of tenders in the past used to be specified on imported products. “So now they want to procure locally but still specify that they want an imported product.”