the dti TO SPEND R290M FOR THE DEVELOPMENT OF SA LEATHER AND FOOTWEAR VALUE CHAIN

the dti TO SPEND R290M FOR THE DEVELOPMENT OF SA LEATHER AND FOOTWEAR VALUE CHAIN

 By BRIAN KAJENGO

The Minister of Trade and Industry, Dr Rob Davies says his department will spare no effort in supporting the Leather and Footwear industry in South Africa.

 Minister Davies says this is evident in the R290 million that the department is spending through its Competitiveness Improvement Programme in order to enhance the competitiveness of the industry by establishing five sector clusters.

These are the National Footwear and Leather Cluster (NFLC) through Vaal University of Technology (VUT), Exotic Leather Cluster through University of Pretoria (UP) and three Retail Collaborative Vertical Footwear Sub-national Clusters.

“We established a new Directorate of Leather and Footwear in 2011 to facilitate development of sectors facing stagnated growth, continued job losses and increasing trade deficit. There was complete lack of sector development infrastructure, skills, institutional investment in design innovation, and Research and Development at the time. The domestic market share and exports orientation was low. Investment and technology demonstration in industry was low and raw leather resources were under beneficiated,” says Minister Davies.

According to Minister Davies the trade and intra-industry trade was reviewed and the Leather and Footwear value chain was divided into six-subsectors due to diverse markets, raw material and manufacturing requirements.

The Footwear, Leather, Leather Goods, General Goods, Handbags and Luggage sectors are domestic market oriented while the Crocodile leather, Ostrich leather, and Taxidermy industry sub-sectors are dominantlyexport oriented offering potential for enhancing export revenue generation through international luxury goods markets.

“As part of the dti’s efforts to support the industry, eleven footwear small businesses established in Great Brak River and Oudtshoorn in the Western Cape under Watson-Southern Cape Sub-national Footwear Cluster were visited by Minister Davies the last year. In addition, Leather and Footwear sub-sectors were designated in January 2012 for Public Procurement with 100% local manufacturing and contents,” adds Minister Davies who recently endorsed Leather Beneficiation Policy proposal for implementation through National Treasury.

Leather and Footwear sub-sectors recently registered desirable growth. In 2013 South African footwear manufacturing grew by 16.2%, footwear exports grew by 18.3%, footwear imports constrained to a marginal 0.1% growth and exotic leather tanning capacity improvement grew exports of finished and semi-finished crocodile skins by 97%.

According to the National Bargaining Council for Leather Industry between May 2012 and May 2014 there were eleven new establishments in Leather and Footwear sub-sectors, employment grew by 5.26% in footwear sub-sector and an overall employment growth of 2% across Leather & Footwear sub-sectors. Kayo Shoes reopened in Dimbaza, Eastern Cape in April this year to absorb 417 jobs, a new leather tannery was established in Atlantis, Cape Town and Angel Shoe reopened in Cape Town, also this year.

“The support and efforts from a large number of captains of industry, seven industry associations, two export councils and organised labour has been overwhelming. The institutional leadership by universities, Further Education and Training Colleges (FETCs) and provincial departments is commendable,” acknowledges Minister Davies.