The Foschini Group (TFG) is planning a major push into local manufacturing to counter supply chain issues.<\/p>\n “Most furniture in South Africa is currently imported; we are looking at various options to manufacture more here, particularly at the moment when shipping costs are up 400%. So it’s even more of a reason if you needed one,” TFG chief executive Anthony Thunstr\u00f6m told Reuters<\/a><\/strong>.<\/p>\n The group, which owns the @Home homeware brand, wants these products to be manufactured on a quick turnaround basis to improve lead times and be competitive against global chains such as Zara and H&M.<\/p>\n TFG said it now plans to spend a further R575 million over the next three to five years to build local manufacturing capability.<\/p>\n The group,\u00a0which sources 72% of its clothes locally, said it wants to locally manufacture 30 million pieces a year within four years, up from 11.5 million currently, and is adding furniture and jewellery to its growing local list.<\/p>\n Retailability and Edgars<\/strong><\/p>\n Concerns around international supply chains were echoed by Norman Drieselmann, chief executive of South Africa’s Retailability, which owns retailer Edgars.<\/p>\n Drieselmann said that China’s power cuts have added a two-week delay to clothing on top of four weeks due to Covid, ahead of the critical festive season.<\/p>\n The CEO said the group is now planning to add to its local vendor base by placing more orders from local manufacturers instead of abroad. It is also shifting sourcing from China to other existing offshore suppliers.<\/p>\n The company has started to engage more actively with India as an alternative, particularly from a fabric sourcing perspective, he said.<\/p>\n Woolworths<\/strong><\/p>\n Woolworths told Reuters it expects the power cuts will impact its orders for March next year.<\/p>\n The retailer, which sources about 30% of its fashion, beauty and home products from China, said it is making arrangements to buy more locally.<\/p>\n Pepkor\u00a0<\/strong><\/p>\n Pepkor – which owns Pep, Ackermans, HiFiCorp and other popular brands – was less forthcoming on its local production plans, but said it would be a key focus for the group going forward.<\/p>\n This will include working with existing and strategic suppliers to manufacture easy-to-make clothing like T-shirts and shorts, and providing financial capital to buy machinery, it said.<\/p>\n “We’ve now identified some vendors that we want to work with, now the next thing is to develop the further capacity for them,” said Pepkor chief executive Leon Lourens.<\/p>\n International issue\u00a0<\/strong><\/p>\n These issues are not unique to South African retailers, with the hit from China’s energy crunch starting to have an impact globally, on all industries in all geographies – from Toyota to Australian sheep farmers and makers of cardboard boxes.<\/p>\n The extreme electricity shortage caused by soaring coal prices in the world’s largest exporter is set to hurt China’s domestic growth, and the knock-on impact to supply chains could crimp a global economy struggling to emerge from the pandemic, Bloomberg<\/a> <\/strong>reported.<\/p>\n The timing couldn’t be worse, with the shipping industry already facing congested supply lines that are delaying deliveries of clothes and toys for the year-end holidays.<\/p>\n The soaring price of ocean freight has put pressure<\/a> <\/strong>on most shippers of cargo, but especially on cash-strapped smaller players.<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2018\/03\/Foschini.jpg\")
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