Supply crisis spurs retailers in the country to end Asia reliance
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SPIRALLING shipping costs and Covid-19 supply chain disruptions are accelerating a shift by South African retailers to end their reliance on Asia and move to source products locally.
More than 50 percent of South Africa’s clothing textiles, shoes and leather products are imported, mostly from China.
While the government launched a programme in 2019 offering tax incentives to source goods locally, the recent problems arising out of Asia have added urgency to what had been a slow shift, four top retailers in South Africa said.
“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 percent. So it’s even more of a reason, if you needed one,” The Foschini Group (TFG) CEO Anthony Thunström said in an interview.
TFG, which sources 72 percent of its clothes locally, said earlier this month that it wants to locally manufacture 30 million pieces a year within four years, up from 11.5 million currently, and was adding furniture and jewellery to its growing local list.
TFG said on November 11 that it would spend a further R575 million over the next three to five years to build local manufacturing capability.
Norman Drieselmann, CEO of South Africa’s Retailability, which owns the Edgars department store chain, said China’s power cuts had added a two-week delay to clothing on top of four weeks due to Covid.
Woolworths said it expected the ongoing power cuts would affect its orders for March next year. The retailer, which sources about 30 percent of its fashion, beauty and home products from China, said it was making arrangements to buy more locally.
Retailer Pepkor said it wanted to work with existing and strategic suppliers to manufacture easy-to-make clothing like T-shirts and shorts.