{"id":452900,"date":"2020-11-29T09:25:01","date_gmt":"2020-11-29T07:25:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=452900"},"modified":"2020-11-29T09:25:01","modified_gmt":"2020-11-29T07:25:01","slug":"south-african-stores-are-turning-away-from-china-to-source-locally","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/452900\/south-african-stores-are-turning-away-from-china-to-source-locally\/","title":{"rendered":"South African stores are turning away from China to source locally"},"content":{"rendered":"

South African retailers including The Foschini Group Ltd. and Woolworths Holdings Ltd. are increasing investment in local clothing manufacturers – both to reduce a dependency on Chinese imports and secure a supply chain thrown into disarray by Covid-19 restrictions.<\/p>\n

The companies have signed\u00a0up to<\/span>\u00a0an industry plan that includes a target to source 65% of their goods from local manufacturers within the next decade.<\/p>\n

While progress toward the goal varies per chain, the spread of the coronavirus has sharpened their collective focus.<\/p>\n

The pandemic caused \u201csuch disruptions to the supply chain that everyone\u2019s sitting back and saying do we ever really want to be that reliant on China ever again?\u201d TFG Chief Executive Officer Anthony Thunstr\u00f6m said in an interview.<\/p>\n

\u201cI think the penny\u2019s dropped and retailers are looking more and more to buy locally.\u201d<\/p>\n

The initiative comes as South African President Cyril Ramaphosa looks to revive a manufacturing industry that\u2019s deteriorated since the lifting of apartheid-era sanctions two decades ago, which enabled companies to seek cheaper alternatives from overseas suppliers.<\/p>\n

Re-establishing the sector would help achieve a goal of creating jobs, easing an official unemployment rate that\u2019s at a\u00a017-year high.<\/p>\n

\u201cAs South Africa opened to trade in the late 1990s, China came in and decimated the market as cost was the only dictating factor,\u201d said Lawrence Pillay, head of sourcing at Woolworths.<\/p>\n

\u201cBut the world has changed radically and there is now so much more than just the cost. Sustainability, carbon footprints, challenges of logistics — all of these factors are going to force a rethink.\u201d<\/p>\n

\"\"<\/a><\/p>\n

Yet opening new factories during a pandemic won\u2019t be easy. The industry\u2019s decline has led to a shortage of skills, training and raw materials, meaning significant up-front investment will be required to eventually wring savings from shorter lead times and cheaper transport costs. That\u2019s at a time where consumer confidence is low, putting retailers on the back foot.<\/p>\n

\u201cThere are certain products, like heavy winter jackets, that we just don\u2019t have the materials and skills in South Africa to yet produce,\u201d Thunstr\u00f6m said.<\/p>\n

South Africa won\u2019t manage to revive the industry in full because local retailers \u201ccan\u2019t replace all the product ranges,\u201d added Lulama Qongqo, an analyst at Mergence Investment Managers in Cape Town.<\/p>\n

TFG, which sources about 22% of its apparel locally, has hired 550 more workers across two South African factories this year and sees the potential to add several thousand more, according to the CEO.<\/p>\n

While South Africa works to revive its clothes-making industry, nearby countries such as Mauritius and Madagascar are also adding to their capabilities.<\/p>\n

The steps taken by those island nations are good examples of how self-sufficiency in the industry can be achieved, according to Woolworths\u2019s Pillay.<\/p>\n

\u201cIf we want our local retailers to get 65% of their product within the borders of South Africa, then we have to look at a broad scope of product categories,\u201d he said.<\/p>\n

\u201cIn 28 years, I\u2019ve never seen better co-operation between retailers, government, labour and manufacturers. In 10 years we can re-create the industry.\u201d<\/p>\n

\n

Read: Food prices are climbing again in South Africa \u2013 here\u2019s how much an average food basket costs<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South African retailers including The Foschini Group Ltd. and Woolworths Holdings Ltd. are increasing investment in local clothing manufacturers – both to reduce a dependency on Chinese imports and secure a supply chain thrown into disarray by Covid-19 restrictions.<\/p>\n","protected":false},"author":59,"featured_media":134663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-452900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/452900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=452900"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/452900\/revisions"}],"predecessor-version":[{"id":452904,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/452900\/revisions\/452904"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/134663"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=452900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=452900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=452900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}