Africa’s cotton industry is blooming from Ethiopia to South Africa thanks to initiatives from government and industry.
In South Africa, the industry is experiencing a revival thanks largely to a grant from the government amounting to 200 million South African rands, or $14 million at current exchange, revealed in June.
Through the Department of Trade and Industry, the government called for the creation of the South African Sustainable Textile and Apparel Cluster that was soon renamed The National Textile and Clothing Development Council. Heinrich Schultz, managing director of OrganiMark, a food, textile and leather supply chain engineering and management firm, was appointed to serve as cluster manager for the Sustainable Cotton Cluster.
The SCC has been operational for 18 months and cotton production has increased 240 percent, with 5,000 new jobs in the industry generated. One local fast-fashion clothing chain, Mr. Price, has already launched a T-shirt line called 100% Local featuring T-shirts designed, sourced and manufactured entirely in South Africa using cotton yarn grown, spun and milled locally.
“We used to have a strong cotton-based industry from the late 1980s to the early 2000s,” said Schultz. “Then China came into the market, the Multi-Fiber Agreement expired in 2005 and South Africa was impacted.”
Schultz explained that in 2012, Cotton SA, a non-profit organization consisting of stakeholders in the South African cotton industry, was approached to take a look at the industry, with a view to reviving it.
“At the time, we were working with international brands and retailers and trying to establish a sustainable supply chain,” he said. “Sustainability for us has always involved elements of environmental responsibility and economic viability.”
Inspired by Puma’s environmental profit/loss initiative, Schultz said it became imperative to establish more sustainable ways of sourcing raw materials.
“The idea was let’s have a look-see and identify our strengths as an industry,” he said. “South Africa already had strict environmental regulations and an advanced state of agriculture, with an emphasis on responsible farming. All the elements were there to position the region as the preferred destination for sustainable sourcing. We needed a strategy to differentiate us.”
The SCC is part of that strategy. The DTI, through Elaine Smith, director of clothing and textiles, explained in the SCC’s October newsletter that since cotton is one of South Africa’s natural fibers, along with wool and mohair, “these subsectors [should] take up the incentive available to them to develop their value chain, beneficiate raw fibers to final products and improve competitiveness to the extent that South Africa can compete globally.”
“In our view, the subnational Sustainable Cotton Cluster should prove that initiatives such as integrated supply chains, technology improvements, incubation and training can improve the overall competitiveness of a sector when carried out in line with a sector strategy,” Smith said.
Schultz noted that the SCC’s role was to highlight competitiveness gaps in the market and to provide sourcing and funding support. Consequently, it would launch interventions to bridge those gaps, in the process commissioning research projects, testing new technology and new systems to improve competitiveness.
“We want to create an enabling environment for companies to position themselves in the sustainable market,” he said. But the challenge was “finding the business models that can actually work. H&M, Kering and C&A have managed to do it. We need to establish virtual partnerships to ensure long-term sustainability.”
For South Africa, he felt, “finding our business model entailed a new way of doing business. It meant developing our supply chain in order to affect a traceability platform, a system that works from farm to [point of sale] and also necessarily emphasizes sustainability. The system must capture the impact of sustainability on the industry, including the water consumption impact and carbon footprint.”
The tasks ahead include “establishing a blueprint going forward, finding ways to make it better and having the capability to manage the supply-chain program,” he said.
Smith said that “the traceability platform that has been developed and is being implemented throughout the cotton cluster supply chain is the first of this kind in the world…It places South African at the forefront of sustainable development, taking into account people, planet and profit.”
The importance of the cotton industry in the rest of sub-Saharan Africa was highlighted in last month’s Origin Africa trade event held in Addis Ababa, Ethiopia. Now in its fifth year, event organizer Belinda Edmonds said this year’s event was “our biggest in terms of both attendance and participation. We enjoyed the support of 187 exhibitors from 26 countries and approximately 3,000 visitors.”
Exhibitors included Ethical Apparel Africa, Cotton Association of Zambia, Rwanda Development Board, Fairtrade Africa, YKK, Tanzania Trade Development Authority, Panaah and Sandstorm Kenya. Buyers included Groupe Auchan SA, Levi Strauss & Co., PVH Corp., Kik, H&M, Lidl and VF Corp.
Edmonds believed that “rising costs and ongoing social concerns in Asia are prompting international buyers to consider new sourcing destinations.” He said, “Several African countries have enjoyed significant exports to the United States and Europe as a result of beneficial trade arrangements and are recognized as competitive apparel-producing countries.”
East Africa in general, and Ethiopia in particular, she said, is enjoying increasing interest for a variety of reasons, adding, “The textile and apparel sectors have been identified as key industries for development in several African countries and governments are actively encouraging and supporting investment in these sectors.”
Speaking on behalf of the USAID East Africa Trade and Investment Hub, Katie Moulton noted that in 2014, the McKinsey apparel industry survey named Ethiopia on its short list of future sourcing destinations.
“Now, with H&M, Primark, Tesco and others sourcing garments from Ethiopia, others in the industry are also taking notice,” Moulton said.
Edmonds recommended that “from a sourcing perspective, it is important to consider regions, rather than specific countries, in order to optimize both volume and diversity of product.”
Origin Africa, which has the support of the U.S. Agency for International Development and its East Africa Trade and Investment Hub, was conceived as a platform dedicated to improving trade in and with Africa and showcases “the entire raw material, textile and apparel pipeline.” It bowed in Mauritius in 2010 and has also taken place in Kenya.
Like its sister event Source Africa, which has been held in Cape Town every year since 2013, Origin Africa blends a trade fair with panel discussions and seminars featuring international industry executives, government ministers and trade experts.
Edmonds pointed out that “Origin Africa and Source Africa work together to promote the African continent as a sourcing and investment destination. The continent and the opportunities are large enough to support both events.”
Clay Hickson, vice president for strategy and development for the U.S.-based Worldwide Responsible Accredited Production, said that even though the textile, apparel and footwear industries in Africa are fairly small at present, “the current environment offers opportunities for expansion, particularly as more international buyers seek to diversify the countries from which they source and to take advantage of AGOA’s recent 10-year renewal.”
He added that WRAP’s participation in events like Origin Africa in Ethiopia was “a way for getting the message out that incorporation of social compliance programs can help factories in these sectors be more competitive in U.S. and European markets.”
Echoing the push the African Growth & Opportunity Act has given the continent’s manufacturers, U.S. Ambassador Patricia M. Haslach, speaking at Origin Africa, said, “the recent 10-year AGOA extension provides greater certainty for African producers and U.S. buyers…and creates a stable environment that encourages increased investment in sub-Saharan Africa.”