Displaying items by tag: Clothing and Textile Sector

Stakeholder Engagement Workshop

Presentation: Designing climate-compatible industrial strategies for South Africa The textiles value chain - Findings and recommendations

Media article: New report offers advice on how to green the South African clothing and textile industry - Jackie May (Twyg 18 September 2022)

Media article: Less than 1% of discarded textiles are recycled back into clothing - Darren Parker (Engineering News 27 September 2022 ) 

Background

South Africa, in line with global trends, has embarked on the transition to a climate-compatible economy as part of a broader transition to sustainable development. This requires the design of climate-compatible industrial development strategies for key value chains in the country. The textiles value chain is one such value chain.

Moving towards sustainable and circular textiles would require a holistic approach and changes at each stage in the value chain, involving players of all sizes and from all market segments. New business models would have to be adopted on a widespread scale, the use of hazardous substances in textile processing would have to be eliminated, and resources would have to be used much more effectively, with a shift away from fossil fuels towards renewable sources of energy and materials. But most of all, textile utilisation would have to be optimised, including a longer service life and more post-use options, along with drastically improved recycling when materials reach their end-of-life.

This webinar follows a research study into the environmental sustainability of South Africa's textiles value chain, with a focus on the manufacturing components of the value chain. The aim of the report is to inform the sector's path towards climate compatibility. A description of and introduction to South Africa's textiles value chain is provided, with emphasis on manufacturing activities in the country. The study explores main environmental impacts associated with South Africa's textiles manufacturing sector. It provides a set of proposed interventions to set South Africa's textiles value chain on a climate-compatible and sustainable pathway. These mitigation options focus on the manufacturing component of the value chain, or interventions that will directly impact and enhance manufacturing practices in the country.

These include:
o Reducing the use of hazardous chemicals and improving water management;
o Optimising manufacturing energy efficiency and consumption;
o Fibre-to-fibre recycling;
o Reducing single-use sanitary wear;
o Adopting clothing and footwear leasing models; and
o Increasing the second-hand clothing market.

The webinar will present a proposed action plan for how these interventions can be packaged and rolled out to decarbonise the South African textiles value chain. This is set within the context of and considering the implementation of the Retail-Clothing, Textile, Footwear and Leather Value Chain Master Plan to 2030.

Agenda

14:00 - 14:10 Welcome and introduction
- Muhammed Patel, Senior Economist, TIPS

14:10 - 15:10 Key Inputs
- Unpacking the need for Climate Compatibility in the textiles value chain - Dr Nicola Jenkin, Pinpoint
- A textiles value chain decarbonisation strategy to meet net-zero 2050 commitments - Elize Hattingh, Researcher, TIPS

15:10 - 15:40 Panel Discussion
- Zubeida Zwavel, Executive Director, Centre for African Resource Efficiency and Sustainability (CARES)
- Hazel Pillay, Head of Clothing Pick n Pay.
- Sam Smout, Waste Sector Analyst and a Circular Economy Lead, GreenCape

15:40 - 15:55
Open discussion on the proposed way forward.

15:55 - 16:00 Wrap up

About the speakers

Dr Nicola Jenkin is the Director at Pinpoint Sustainability. She has over 25 years' experience working in the sustainability field with a particular focus on adding value to supply chains, sustainable food systems, and green skills to enable South Africa's economy to transition to one which is sustainable, just and resilient. Activities include professional research, advising on and developing CSR strategy, assessing resource efficiency and optimisation along supply chains, identifying added value, sectoral green skills supply and demand and socio-economic research.

Elize Hattingh is a Researcher: Sustainable Growth at TIPS. She has been actively involved in promoting the sustainable development agenda for more than 15 years. She was the Executive Coordinator for Waste to Wing, a Switch Africa Green Project and the Incubation Manager at the South African Renewable Energy Incubator. She also actively supports youth-owned entrepreneurs at Youth Bridge Trust and women-owned entrepreneurs at Future Females Business School with business development support.

About the panel

Zubeida Zwavel is the executive director of the Centre for African Resource Efficiency and Sustainability (CARES) based in South Africa. The NGO aims to support small to medium-sized enterprises (SMEs) by creating awareness and giving access to sustainability mechanisms and furthering women's roles within sustainable business. The key objective of the NGO is to apply a pragmatic approach to implementing sustainability into business processes and management systems. Zubeida has coordinated a number of Industrial Ecology projects (such as Waste Minimisation Clubs, Symbiosis, and Eco-industrial parks) in varying sectors and industrial areas with her key activities including training and conducting audits. Additional key specialist skills include life cycle management incorporating tools such as eco-innovation, eco-labelling, carbon and water footprinting.

Hazel Pillay is the head of Pick n Pay Clothing. She holds an MBA from the Graduate School of Business, University of Cape Town. Hazel specialises in developing clear retail propositions that are unique in order to create value for both internal and external stakeholders. She has also developed strategies to grow local, including procurement as well as created Futurewear with Gavin Rajah, which is an incubator for young South African designers. Hazel has covered numerous roles in retail as well as worked abroad in Poland and with the international retailer Cotton On. Her primary purpose is to create value, through retail, that will impact the lives of employees and customers positively as well as create economic growth opportunities through job creation.

Sam Smout is GreenCape's Waste Sector Analyst and a Circular Economy Lead. He works to bridge the gap between the two driving forces of the economy: the mandate of policymakers and bureaucrats (government), as well as the markets of the private sector (business). His role is to gather, analyse, distill, and disseminate information related to the opportunities for and the barriers to investment in economically viable green technologies, systems and processes that keep products, components, and materials at their highest use and/or value for as long as possible,

About the facilitator

Muhammed Patel joined TIPS in 2017. He holds a Masters in Economics from the University of KwaZulu-Natal, where his thesis focused on the relationship between income and health in South Africa. Muhammed’s background spans work in industrial development, and competition and regulatory economics. While completing his Master’s degree, Muhammed worked as a junior researcher at the School of Development Studies conducting research on the manufacturing sector of eThekwini. He also lectured undergraduate economics students over this time. In 2015, Muhammed joined competition and regulatory consultancy Genesis Analytics, where he spent two years working on competition and regulation cases. Notably, his work focused on the telecommunications and energy sectors.

This report delves into the environmental sustainability of South Africa’s textile value chain, with a focus on the manufacturing components of the value chain. The aim is to inform the sector’s path towards climate compatibility. It provides a description of, and introduction to, South Africa’s textiles value chain, with an emphasis on manufacturing activities in the country as well as a brief introduction to the main environmental impacts associated with South Africa’s textiles manufacturing sector.

The report then provides a set of proposed interventions to set South Africa’s textiles value chain on a climate-compatible and sustainable pathway. These mitigation options focus on the manufacturing component of the value chain, or interventions that will directly impact and enhance manufacturing practices in the country. These include: reducing the use of hazardous chemicals and improving water management; optimising manufacturing energy efficiency and consumption; fibre-to-fibre recycling; reducing single-use sanitary wear; adopting clothing and footwear leasing models; and increasing the second-hand clothing market.

This is followed by a proposed action plan for how these interventions can be packaged and rolled out to decarbonise the South African textiles value chain. This is set within the context of and considering the implementation of the South African Retail-Clothing, Textile, Footwear and Leather Value Chain Master Plan to 2030

Report Updated October 2022

Download a copy or read online

This paper looks at the potential increase in regional gains, particularly in Lesotho and South Africa, through the wool value chain, with the aim of increasing regional productivity and the distribution of wealth through wool production. It also looks into the constraints that domestic, regional and international demand pose for the wool industry in both countries. However, it finds that the value chain seems to be collapsing between the two countries and that the wool industry in both countries is facing a downward trajectory. Last, it makes recommendations on possible priorities for the sector, given the existing and emerging challenges within the wool industry.

Session 6B: Taxation and Trade Quotas

South African manufacturing has experienced a slow overall decline despite adopting a range of recommended economic policies from protectionism and active state support in the period preceding political change (1994) followed by aggressive liberalisation and more free access to markets thereafter. Alongside interfering industrial policies, the decline has also been blamed on poor skills, out of date technology and constrained input access, increasing global competition, high labour costs and a range of microeconomic factors unique to the sector. Evidence for this is mixed. Extensive government support and protectionism on the one hand and aggressive economic liberalisation with a focus on supply side policies on the other have failed to stop this decline. Multiple academic and government commissioned studies have typically focused on single sectors or isolated causes rooted in the neo-liberal tradition. Remedies such as those listed above have followed in the same vein with a focus on correcting market imperfections within the micro-economy. These have failed to bring about noted change precisely because they ignore the dominant elements of the South African political economy. Policy and economic outcome has manifested a remarkable continuity despite political and economic transformation. This continuity refers to the interaction between individual sectors of the economy and of their differing degrees of influence over policy choices. Industrial policy studies have sought to categorise policy choices under narrow government- or market-led frameworks resulting in unrepresentative conclusions reflecting prevailing economic fashions more than the South African context.

Understanding the specific dynamics of manufacturing requires delving into what drives the South African economy and how specific sectors fit together with the underlying combination of economic and political priorities and changing external market conditions. This research aims to show how industrial policy reflects these economic and political priorities with particular focus on the dominant role of the mineral and energy complex (MEC) as a key driver of industrial and macroeconomic policy and economic performance. Core to this analysis is understanding the debate on post-war industrial policy and the false polarisation between the roles attributed to the state (import substitution / protectionism) versus the market (trade and financial liberalisation / supply-side measures) in directing policy. State driven policy is typically associated with the apartheid period and the market driven model with the new ANC government post 1994 whereas a closer look shows liberalisation began before the end of apartheid and elements of strong state involvement remain thereafter.

What emerges is a pattern where mismanaged import substitution, promotion of state owned enterprises, failed decentralisation and unsuccessful support to small and medium sized enterprises during the period preceding political change reflect the underlying presence of minerals energy complex. Though aggressive liberalisation and supply-side policies take over in the 1990's, this role associated with the minerals energy complex remains an and substantial (though evolving) influence over the economy. The poor manufacturing performance and alleged policy ineffectiveness reflects a broader failure to achieve structural transformation through diversification away from natural resources and a break in the dominant class structure with a mature capitalist class in control of the profits extracted mainly from minerals and energy related sectors. How is this industrial policy and economic structure reflected in the case of Textiles and Clothing?

The Textiles and Clothing (T&C) sector (as an example of manufacturing unrelated to the MEC) is used to assess the impact of this unique economic structure and dynamics within a changing global environment. The aim is to show that macroeconomic and industrial policy choices exacerbated the decline initiated by global and domestic economic changes. This is puzzling given that the T&C industry continued to receive preferential treatment through industrial policy support and exemptions or special arrangements to soften the impact of other policies (notably trade liberalisation). In addition, the low skill and labour intensive nature of T&C fits with the government's claims to prioritise employment and would reinforce the need to ensure the survival of this industry.

To summarise, explanations for the failure to arrest this decline typically fall into one of the following categories:

• State intervention and market (failure) have resulted in poor policy and poor implementation.
• Poor output and productivity growth of the South African economy as a whole are explained by the popular competitiveness analysis rooted in microeconomic analysis. Multiple explanatory variables such as poor skills, obsolete technology, structural and management shortcomings, organisational limitations etc. have been researched through case studies and statistical analyses. Recent supply-side policy measures are directly linked with this type of analysis.
• Developments in the global trading environment and other external market factors such as changes to the global T&C value chain, new entrants to the (liberalised) markets, and a proliferation of multilateral and bilateral trade agreements have played a dominant role over and above government actions to support vulnerable sectors.

Though relevant in highlighting specific elements of the decline, these explanations suffer from a static and descriptive nature that is devoid of contextual understanding. What is missing is an exploration of the underlying political economy conditions that drive the South African economy and policy; how T&C fits into the overall political and economic priorities and in particular; and how these priorities have evolved over time. In conclusion, the paper proposes the following hypotheses:

• South African development in the 1970-2005 period does not fit under existing industrial policy theorising and definitions polarising the state and the market
• The prospects for the development of the T&C sector were heavily constrained by the dominance of the MEC within the South African economy. Any development opportunities emerging within the T&C were limited or obstructed by the priorities set in the broader economic and political context.

This document has two objectives. First, it endeavours to capture the domestic clothing sectors major market and production trends, as well as broader dynamics. Second, these foundational elements operate as a mechanism to identify current clothing sector constraints and opportunities and hence the need for, and the importance of, policy related interventions. Given its objectives, the document comprises six sections. Section 1 provides an overview of the sectors major trends as gleaned from TIPS data, whilst Section 2 reviews the sectors structure in respect of various criteria. Section 3 explores market trends and competitiveness related issues, with Section 4 then exploring the international and government policy framework in which the industry operates. Section 5 attempts to synthesise the constraints and challenges confronting the sector, with Section 6 then considering the policy implications and opportunities arising from the analysis. These last two sections represent the core of the document insofar as they build on the findings generated out of the 2004 TIPS study (out of which this document is largely derived), and present the major strategic recommendation to have emerged out of the recently completed CSP research undertaken by B&M Analysts on behalf of the dti.

The last few years have witnessed two major shifts in global trading and industrialisation patterns. The first is the rise of China (with the South East Asian region in tow) as the dominant force reshaping the relations between developing and developed countries as well as the competitive dynamics within the developing world. One can no longer speak of a developing world as if it was not highly differentiated and contradictory. The second, of major significance only in respect of Africa, is most exemplified in the rapid rise of a clothing industry sector in selected countries (amongst which Madagascar has been prominent) in Sub-Saharan Africa, primarily through the impact of the African Growth and Opportunities Act. Whilst perhaps of insignificance on a global scale, the possibilities it has opened up for wage employment and rising income for significant numbers of workers on the continent is not to be dismissed. However, the end of the Multi-Fibre Agreement and the massive impact of China on the global dispersion of clothing production, threatens to substantially disrupt these processes. It is to this end that we undertook a study of the dynamics operative in the Madagascar clothing industry.

Between January 2002 and July 2005, the South African exchange rate has appreciated by more than 30 per cent. At the same time, there has been widespread news coverage of the decline in several manufacturing sectors, notably clothing and textiles. Over the same period, commodity prices have risen substantially. The gold price rose from an average of $310 per ounce in 2002 to an average of $436 in 2005. The platinum price rose from an average of $541 per ounce to $887 over the same period.

This has led some commentators to speculate that high commodity prices have led to the appreciation of the rand, and the subsequent lacklustre growth in output and decline in employment in the manufacturing sector, along the lines of a classic case of the 'Dutch disease', where an economy is harmed by commodity abundance. These commentators are concerned that once our manufacturing sectors are lost, we may not be able to rebuild them, and we will lose the dynamic benefits of having a manufacturing sector, which include skills accumulation and economies of agglomeration.

In this paper, we begin with a definition of what is meant by a commodity and what is meant by a manufactured good, and we describe the commodity price time series we use. We then provide an overview of the literature on the 'Dutch disease' effect, followed by an analysis of the impact of the commodity price boom on South Africa. Finally we present our conclusions, and some potential policy interventions emanating from the literature on Dutch Disease.

This report is the culmination of a study of the textile and garment industries in the member states of the Southern Africa Development Community (SADC). Based on fieldwork mostly done between October 2000 and April 2001, the project produced country reports for each of the 11 countries that are signatories to SADC Trade Protocol. The present report offers an overall view of the industries’ opportunities and constraints and proposing institutional, regulatory and policy changes to allow these industries to thrive and become robust by seizing the unique, but temporary, advantages offered in the current international juncture.

The 'new economy' remains an ambiguous concept which means different things to different people (see, for example, Cohen et al. 2000; OECD, 2000a, b; Shapiro and Varian, 1999). We argue that the notion of a 'new economy' is closely tied to the economic transformations which are powered by the development and diffusion of information and communication technologies (ICTs), the rise of knowledge-based productivity and competitiveness, and the increasing dominance of global value chains incorporating global networks of capital, production and trade. The major factors spearheading the new information economy are modern microelectronics-based information technology, deregulation, privatisation, and liberalisation of trade and investment (Dicken, 1998; Gereffi, 2001). The notion of the new economy is thus firmly anchored in the new ideological environment that resulted from the collapse of statism, the crisis of welfarism and the contradictions of the developmental state (Held et al., 1999). The new economy originated mainly in the United States, but is spreading rapidly into Europe, Japan, Asia Pacific and in selected developing countries (Schiller, 1999).

The key point that needs to be emphasised is that organisational learning, knowledge management, digital networking and information processing are critical elements for firms operating in the new economy (Tuomi, 1999). According to Castells (2000: 77), the productivity and competitiveness of firms 'fundamentally depend on their capacity to generate, process, and apply efficiently knowledge-based information'. Ecommerce and the global networked business model are the archetypical expressions of the new economy (Castells, 2000; Hartman, Sifonis and Kador, 2000). It is important to remember, however, that the growth and development of the new economy has been highly uneven both within and between countries. The networking logic is based on asymmetrical interdependency, and is exclusionary locking out those individuals, groups, regions, sectors and countries lacking the required knowledge intensive skills and capacities. Moreover, the new economy is not about soft landings and smooth growth, rather it is about a structural shift in the global economy heralding transformation, risk and disruption for developing economies.

In South Africa, the critical importance of e-commerce and online electronic linkages in shaping the performance of domestic enterprises in the global, networked economy has recently come under the policymaking spotlight (Department of Communication, 2000; Department of Trade and Industry, 2001; Kaplan, 2000). This is not surprising since, in the new economy, ICTs play an increasingly important role in innovation, profit margins, output performance, value-added, employment creation and investment (Baily and Lawrence, 2001; ILO, 2001; OECD, 2000a, b). The South African development challenge is indeed a formidable one: high structural unemployment (39.5%); a sluggish economic growth rate (an average of only 2.1% annually between 1996-99; well below the population growth rate); large scale brain drain with the flight of knowledge intensive skills for Australasia, North America and Europe; high levels of poverty in the black population (53% of individuals fall below the poverty line of R301.70 per adult equivalent);2 and high inequality (a Gini coefficient of 0.593) (Harsch, 2001; www.statssa.gov.za; Woolard and Leibbrandt, 1999; World Bank, 2000).3 The challenge is one of how to promote and sustain development in such an environment. The DTI (2001), for example, argues that South Africa needs to follow an ICT-enabled, knowledge-based industrial development trajectory in order to achieve steady high rates of economic growth and structural change in the domestic economic system.