There was a desperate need for a comprehensive strategy to rescue the clothing and textiles industry, Nick Steen, chairman of the SA Household Textile Manufacturers Association, said on Tuesday.
"The harsh reality is that a textile mill spinning, weaving and finishing standard or basic fabrics can never survive in a country that has to import 80 percent of cotton needed to meet its requirements," he said.
This follows Seardel's announcement that it would shed up to 1 400 jobs at its three divisions that convert cotton into yarn.
Steen said the textiles side was a hindrance to the sector as China, India and Pakistan were the world's top producers of raw cotton.
"With their state-of-the-art textile mills and the huge productivity advantages of large economy of scale, South Africa could never hope to compete in this sphere."
Lawrence Edwards, an economist at the University of Cape Town, said the government had to think about addressing the industry's problems urgently and carefully.
"If the textiles industry can't compete despite the high level of protection then government should acknowledge that importing material may be an alternative.
"If clothing companies can have more access to quality material at cheaper prices it might enable them to become more competitive."
Steen said state support was crucial in making the industry sustainable in local markets before moving towards exporting. "In South Africa little was done to ensure the sustainability of local manufacturers."
Under the duty credit certificate system benefits were given only to exporters and "were in most cases simply sold off to retailers, who used them to import goods". Bonolo Modise
Source : Business Report