Since 1994, the South African economy has gone through a variety of reforms which have focused on social progress. Issues such as unemployment, poverty, and inequality, however, are still translating into industries which are underperforming economically. The South African textile industry is one of them.
Since the mid-2000s when the industry reached its peak, growing has been well-below its overall potential. The economy as a whole grew at an average rate of 3.25 between 1994-2012.
Even before the social reforms, tariff protection in textiles and clothing was materially reduced. The industry achieved $1.07 billion in textile and clothing exports in 2016, but it also spent $2.92 billion on clothing imports. 46% of the value of imported textiles comes from products that were manufactured in China.
With a cotton crop estimate of 36,000 tons for the 2017-18 production season, a 145% increase from the year before, there are opportunities for the industry to grow.
Important South African Textile Industry Statistics
#1. In 2017, South Africa imported over 62,000 tons of textile fibers for the domestic industry. 36% of these fibers were cotton. Just 2% of the total fibers, of 1,100 tons, were imported from China. (Cotton SA)
#2. Over 19,000 hectares are currently under irrigation for the cotton crop in South Africa to support the textile industry. The majority of the irrigated acres are located in Limpopo and the Northern Cape. (Cotton SA)
#3. Another 17,600 hectares are currently growing cotton on dryland in South Africa. Compared to irrigated land, the seed cotton kg per hectare is 5 times less on dryland crops. (Cotton SA)
#4. 4% of the cotton crop in South Africa is hand-picked, though 100% of the cotton grown in Mpumalanga is picked by hand. Over 2,000 hectares of dryland cotton is currently cultivated in that region. (Cotton SA)
#5. In September 2018, the 2017-18 harvest was estimated to produce over 195,000 200kg lint bales of cotton to support the textile industry. (Cotton SA)
#6. About 14% of the total manufacturing produced in South Africa is created by the textile industry, which includes footwear and clothing for statistical purposes. (Business Partners Ltd)
#7. There are nearly 80,000 direct employment opportunities available through the textile industry in South Africa, with that figure growing by 50% when temporary workers are hired to process the cotton and other materials that are harvested or imported. (Business Partners Ltd)
#8. Despite the gains made by the textile industry in recent years, the total contribution to South Africa’s GDP continues to hover around 1%. (Business Partners Ltd)
#9. Domestic sales of textile products have been declining since 2005, which is why the industry has focused on the export market to earn revenues. A total revenue loss of 6% was experienced through 2010 after reaching a peak in 2005. (The Journalist)
#10. 21% of total retail industry revenues, which are $7.4 billion each year, come from the textiles segment – which includes footwear and clothing. (Flanders)
#11. 80% of the thread which is used for sewing textiles and garments around the world comes from facilities that are located in South Africa. Sans Fibres is the leader in this segment and has a headquarters located within the country. (FPMSETA)
#12. Although the textile industry employed more than 250,000 before 1994, it is believed that the creation of CTCP (Clothing and Textile Competitiveness Program) for the textile industry saved 63,000 jobs and may have added between 8,000 to 10,000 new opportunities. If that data is correct, CTCP is responsible for 90% of the current structure of the South African textile industry. (FPMSETA)
#13. In South Africa, the average household spends about 5% of their income on products which are offered by the textile industry. That equates to the spending of about $600 per year, per household, for the industry. (Flanders)
#14. The U.S. represents over 55% of the total export value that the South African textile industry achieves each year. Another 21% is contributed by the United Kingdom in the export market. (FES)
#15. The government’s training and education authority (which oversees the textile industry) reports more than 2,000 active firms producing goods. Although leather, footwear, and clothing are all included in this oversight, 80% of the registered companies solely focus on textiles and apparel. (FES)
#16. 70% of the domestic textile and clothing sales which occur in South African come from the top apparel retailers in each region. (FES)
#17. 18% of the total textile output which is achieved by the South African textile industry is dedicated to the export market. That is double the amount of clothing output that is sent for export. (FES)
#18. 70% of the employees who work in the textile industry are under the age of 25. In comparison, less than 1% of workers who are employed by the industry are over the age of 40. (FPMSETA)
#19. Although women make up a majority of the manufacturing workers in the overall clothing and textile industry, men are twice as likely to find employment in the textile sector compared to clothing, footwear, or leather apparel. (FPMSETA)
#20. 1 in 4 workers who have a job with the textile industry in South Africa speaks isiZulu as their primary language. 1 in 5 workers speaks Afrikaans as their primary language. Just 18% of the workers in the South African textile language speak English as their first language. (FPMSETA)
South African Textile Industry Trends and Analysis
As income levels continue to rise in South Africa, there is a hope within the textile industry that new domestic opportunities will be developed. By the end of 2028, the number of households with incomes that place them in the Top 1% is expecting real-wage growth of more than 60%.
To encourage domestic spending, the government has created lucrative tax structures and competitive wages. This has worked to develop a business culture which is more positive, translating into more products and services being offered through the industry.
The South African textile industry is facing some challenges. Prolonged drought is causing more farmers to convert from irrigated land to dryland growth of cotton. Cheap imports from China continue to place pressure on locally-grown pricing. Economic variability in their primary export markets, such as the United States, also threaten the slim profit margins that are being achieved.
These issues all have the potential to be resolved. It is possible for the industry to achieve its former glory without the shadow of apartheid hanging over it. With more investment, some innovation, and a little good luck with the weather, there is a strong growth potential to be found in the textile industry of South Africa.