Factory closures signal an unhappy future for textile exports

JOY ORLEK THERE’S NO doubt that the end of the quota system for China will impact significantly on AGOA volumes moving out of South and southern Africa. According to Robyn van Rooyen, who looks after retail exports at UPS Supply Chain Solutions, exports from sub Saharan African increased 55% following the implementation of Agoa, but already a number of factory closures are a sign of what’s to come. And an additional impediment for South African exporters is the stronger currency. “The positive effects of AGOA have obviously diminished with the strengthening of the rand,” says Cargocare Freight Services operations manager Sue Wood. “In a recent media report, Tralco was named as one of the companies appealing to government to increase dumping duties for clothing from China,” she told FTW. Director of UPS Supply Chain Solutions, Thore Saether, is however hopeful that the China threat will spur local industry to greater efficiency. “As UPS our retail clothing volumes have actually increased, but that’s because our clients have grown. “We are pushing aggressively in other areas, like aircraft components, to counter what seems like an inevitable decline,” he said. Cargocare exports manager Jeron Govender also cites the exchange rate as a major contributor to the volume decline, but his feedback is positive. “For us Agoa ex Lesotho and Swaziland hasn’t changed much – we’re still experiencing a boom.”