The purpose is to provide the reader with an overview of SASTAC’s Objectives and Competitiveness Improvement Interventions.
The Cluster initiative is funded by the South Africa Government through its Competitiveness Improvement Programme (CIP) as part of the overall Clothing and Textiles Competitiveness Programme (CTCP). The CTCP is a programme of the Department of Trade and Industry (“the dti”) to stabilise employment and to improve overall competitiveness in the clothing, textile, footwear, leather and leather goods manufacturing industries. The CIP is administered by the CTCP Desk at the Industrial Development Corporation (IDC) on behalf of the dti. In January 2013, the South African Cotton Producers Organisation and Cotton SA initiated the process of linking up with various like-minded Textile, Apparel and Retail sector stakeholders such as the Mr Price Group, Prilla 2000, Loskop Cotton Gin, etc, to formulate the concept ideas for establishing a National Cluster that will firmly position the local industry in the fast growing sustainable textiles and apparel market.
This was done under the leadership of supply chain specialist Mr. Heinrich Schultz, who was subsequently appointed as Cluster Manager. A Cluster Task Team, consisting of industry value chain stakeholders representing the entire sector from fibre producers to retail, was set up to conduct a thorough market analysis followed by a detailed competitiveness analysis.
On the 2nd of August 2013, the Cluster convened its first interim national cluster board meeting. This was indeed a historical meeting for the Industry with representation covering the entire value chain as well as national government, organized labour, consumer organisations and service providers. This meeting endorsed the development plan and approved the competitiveness improvement interventions. The Task Team then proceeded with the compilation of the Cluster Business Plan and submitted the CIP application to the CTCP desk at the IDC in September 2013. The CTCP Desk conducted its due diligence in October and November 2013 and the application was approved by the dti and the Programme Approval Panel on the 28th of November 2013.
After compiling and signing off on all legal agreements during the first quarter of 2014, the Cluster officially commenced its operations in the beginning of April.
The main aim of this Cluster initiative is to build and improve the capacity in the South African textile and apparel industry value chain to effectively supply:
· Local and international consumers with fully traceable sustainable apparel and household textile products;
· Local Government with fully traceable sustainable textile and apparel products that adheres to the 100% local content designation as stipulated by the PPPFA Regulation;
· Facilitate the development of sector and/or supply chain specific Sub-National Clusters. In support of its main aim above, the Cluster have specific objectives to:
· Conduct research and technology demonstration to support the development of shared national resources;
· Establish and manage shared national resources to provide an enabling environment for cluster members and other sub national clusters;
· Incubate opportunities for sustainable SMME participation and employment creation – from farm to retail;
· Maximizing the production capacity development and beneficiation of local raw materials – starting with cotton and then broadening its scope to include all other natural and synthetic fibres;
· Establish a National Sector Body that represents the entire industry value chain from fibre to end use product – bringing together like-minded sector leaders that work closely with Government to map out the future development of the industry and address mutual issues of national concern;
· Achieve “Global Best Practice” status through benchmarking the Cluster’s deliverables and performance on various international benchmarking platforms.
Competitiveness Improvement Interventions
During its first year of operations, the Cluster will implement a wide range of interventions to achieve its objectives. Future interventions will be informed by the outcome of these interventions. These will amongst others include:
1 Shared National Resources
1.1 Strategy and Intelligence Centre
As part of the competiveness assessment process the Task Team engaged with existing clusters and industry organizations who expressed the need for a centralised national strategy platform and intelligence services capability for the textile and apparel industry. This intervention will aim to create:
· An industry platform for like-minded stakeholders to discuss and formulate issues of strategic concern and engage with Government in this regard;
· To centralise the intelligence output of various existing clusters and industry organisations and to create a central point of capturing and dissemination of aggregated industry intelligence and research.
1.2 Compliance Centre
The Compliance Centre will aim to assist Government and other regulatory bodies in their compliance duties with regard to the greater textile sector. Its initial focus will be on import data collection, analysis, valuations and valuation methodology in support of the current reference pricing initiative of SARS Customs. The centre will further look to:
· Upscale the level of interaction with Customs officials at the ports of entry and to facilitate training and reward programmes;
· Offer services to ITAC in case where ITAC rules require that rebate beneficiaries are required to comply with legislation requirements;
· Assist the National Consumer Council with the policing of current policies with regard to product labelling;
· Get involved with current government initiatives in respect of local preferential procurement;
· Benchmark and propose alternative statutory dispensation and support mechanisms in support of the overall capacity development and competitiveness improvement objectives of the Cluster.
1.3 Finance Centre
The development of integrated supply chain programs has unique finance requirements ranging from production finance for farmers and commodity finance, to supply chain trade finance and enterprise incubation funding. The aim of the Finance Centre is:
· Assessing the financing needs of both the Cluster itself and the individual projects emerging from its work with the industry;
· Identifying and prequalify sources of funding that range from social or development grants to commercial investments;
· Facilitate the structuring and securing of the financial resources required.
In order to unlock immediate international funding solutions, the Cluster approached Golden Mean Capital Partners (GMCP) based in San Francisco, USA. GMCP is a leading investment firm with extensive experience in early stage investment and supply chain financial solutions in Africa.
2 Research & Development
The first year of the Cluster Programme will focus on building the industry intelligence foundation for informed strategy formulation and decision making. The intelligence gained from the following research activities will feed into the Cluster’s Strategy & Intelligence Centre as one of the Shared National Resources.
2.1 Textiles and Apparel Skills Plan
Conduct Research amongst the industry value chain stakeholders and education institutions to compile a valid and reliable skills plan, to align the education system in South Africa to meet the demand and establish what current value chain stakeholders consider as “work readiness” requirements for graduates.
2.2 Sector Demand and Capacity Study
The Cluster acknowledges the research work done in this field by other entities such as tertiary education institutions, government departments, existing regional clusters, etc. In order to maximise resources and avoid possible duplication, the Cluster will work closely with such entities. Through both secondary and primary research, this study will aim to:
· Quantify the demand for sustainable textiles produced 100% in southern-Africa;
· Define sustainable production principles / standards throughout the local value chain;
· Understand industry capacity and capabilities to meet demand for sustainable textiles;
· Highlight value chain strengths;
· Identify value chain weaknesses and gaps;
· Provide recommendations and potential solutions.
2.3 Sustainability Impact Assessment
Environmental, Social and Economic impacts occur across the supply chain and the Cluster therefore needs to assess and understand the sustainability impact of its existing industry value chain practises, both for benchmarking purposes and continuous improvement strategies. The objective of this intervention will be to:
· Identify major sustainability impacts across the South African cotton and poly-cotton industry value chain from farm to consumer through an in-depth Life Cycle Assessment of selected products;
· Quantify the effect of implementing sustainability principles across the supply chain as part of a national sustainability strategy for the industry value chain.
3 Technology Demonstration and Development
Three Interventions will be launched under this category, namely:
3.1 Supply Chain Traceability and Procurement Platform
This intervention will aim at developing and demonstrating a bespoke web-based solution for:
· Physical Item Level Traceability – the traceability of physical items or the containers transporting product in the textile value chain and automated applicable data capturing;
· Document Traceability – to uniquely trace control documents or certificates in the textile value chain;
· Import permits, customs and local content management – to manage import permits and certificates in order to provide a facility whereby the Cluster will have more visibility on textile imports;
· Load and Mass Balancing – to determine demand in the value chain, and show anomalies between expected yields and actual production within the value-chain;
· Sustainability Scorecards and Compliance Reporting – the ability to trace and transport compliance and sustainability data from one participant in the value-chain to another, ending at the final products supplied to the end-user;
· Governance & Compliance – to view the content of applicable laws, regulations, acts, best practices and other sources containing obligations of parties in the value-chain;
· Supplier Management – the ability to set-up and capture supplier details (this will include geographical, contacts, type of business, certification, compliance, products and services, etc.) in order to communicate effectively, support tender and contract management functions and general visibility of all suppliers in the value-chain
· Contract Management between supply-chain members – to set-up and capture supplier and supply-agreements between participants in the value-chain, including governance structures and standards for item masters, commodity definitions, transfer costs, pricing and support agreements for the transfer and security of data through the value-chain
· Document Management – the ability for the Cluster to manage a central repository of any relevant documentation throughout the Programme, including version control, ownership, status and other typical security controls;
· Central Government Textile Procurement Portal – to assist organs of state to comply with the National Treasury preferential procurement act, through facilitating the entire procurement process from demand forecasting and tender specifications through to product delivery and compliance performance measurement;
· Reporting and BI – to continually provide strategic trend, capacity and value-chain information for decision making by members and participants through graphical, geographical and drill-down reporting.
3.2 Stripper Cotton Harvesting
Stripper Cotton technology is used in other cotton producing countries to dramatically reduce the cost of cotton production and increase profitability of dry land cotton farmers and downstream processing – it is particularly successful in the production of heavy fabrics used in work wear and denim. This intervention will demonstrate this technology for the first time in South Africa and assess the potential impact of this technology to stimulate growth in the cotton sector.
3.3 Bio Paraffin
This technological innovation will test the conversion of crude cotton seed oil into bio paraffin for domestic and potentially industrial use. This initiative will further aim to address most of the key health and safety risks of synthetic paraffin and paraffin appliances and technology viability.
4 Independent Benchmarking
4.1 Textiles & Apparel: University of Delaware (UD)
The USA based University of Delaware is a world leader in sustainable textiles education and research, the University of Delaware Sustainable Apparel Initiative (UDSAI) provides complementary capabilities to other cluster members, bringing perspectives on sustainability from the global apparel and textile industries, global buyers of apparel and textiles, and other critical stakeholders, along with advanced research and educational capabilities. The objectives of this intervention are to:
· Work with cluster members to ensure a shared foundation of knowledge and alignment about sustainable textiles on which to base further interventions to improve the Cluster;
· Benchmark capacity of various value chain stakeholders to deliver sustainable textiles that meet global buyers’ expectations;
· Assess the effectiveness of a pilot sustainable value chain with small test runs of production to different specifications;
· Serve in an advisory capacity on interventions involving consumer research & analysis of global standards for sustainability & their applicability to South Africa.
4.2 The Global Textile Exchange
The Textile Exchange is a non-profit organization that operates internationally and is committed to the responsible expansion of textile sustainability across the global textile value chain. The Textile Exchange inspires and equips people to accelerate sustainable practices in the textile value chain, focusing on minimizing the harmful impacts of the global textile industry and maximizing its positive effects. The Cluster will become a member of the Textile Exchange and utilise this international platform to:
· Participate in sustainability webinars, workshops and the annual Textile Exchange Conference;
· Present the outcome of its interventions and benchmark these against similar initiatives worldwide.
4.3 International Cotton Advisory Committee (ICAC)
The ICAC is an association of governments of cotton producing, consuming and trading countries and its role is to raise awareness, to provide information and to serve as a catalyst for cooperation action on issues of international significance. In 2012, the ICAC formed a Working Group on Cotton Identity Programs in order to enhance cooperation, improve transparency, and exchange experiences as well as information about sustainability. This intervention will enable the Cluster to:
· Participate in the ICAC Identity Cotton working group and present key findings of the Cluster interventions at the annual ICAC Plenary meetings;
· Gain insight and knowledge from the presentations of similar identity cotton initiatives in other parts of the world.
5 Integrated Supply Chain Programme (ISCP) Development
The ISCP forms the backbone of the Cluster’s competitiveness improvement interventions, as it pulls together the aforementioned interventions into a bespoke supply chain solution. The ISCP aims to develop a Business Model that will effectively integrate the entire supply chain with the aim to;
· Facilitate forward planning and long term contracting to ensure that production meets demand;
· Create partnerships amongst supply chain stakeholders and service providers to ensure scalable solutions;
· Incubate SME development and participation;
· Ensure supply chain traceability to protect the integrity of sustainability claims and to measure program impact.
During its first year of operation, the Cluster will develop two pilot programmes, namely a consumer programme with the Mr Price Group and the Government programme.
The SASTAC initiative brings together the entire Textile and Apparel Industry value chain, national government, organized labour, consumer organisations, service providers and dedicated cluster management. All are committed to improving the capacity and competitiveness of our industry in a sustainable manner. I hope that this document has given you an overview of the Cluster’s immediate strategy to achieve this and you are welcome to connect with us for additional information you might require.