National University of Science and Technolgy NuSpace Institutional Repository Textile Technology http://ir.nust.ac.zw Textile Technology Conference Papers 2015-05 Review of the cotton to- clothing industry in Zimbabwe- What role can China play? Nyoni, A.B. Nyoni, A. B. (2015). Review of the cotton to- clothing industry in Zimbabwe- What role can China play? http://ir.nust.ac.zw/xmlui/handle/123456789/740 Downloaded from the National University of Science and Technology (NUST), Zimbabwe
Review of the cotton to- clothing industry in Zimbabwe- What role can China play? Abstract Abraham B Nyoni National University of Science and Technology, Department of Textile Technology PO Box AC 939 Ascot, Bulawayo, Zimbabwe In the late 1980s and early 1990s, Zimbabwe used to boast of a full functional Cotton-to- Clothing value chain, contributing to 5% GDP and employing over 35 000 people. This chain has regrettably been broken in the last decade, primarily due to the financial collapse of 2008 and the autonomous economic liberalisation measures that were taken under the Economic Structural Adjustment Programmes ( ESAP ). The painful autonomous adjustment measures under ESAP were exacerbated by the overarching but binding global trading commitments under the multilateral trading system ( WTO ) as well as regional and bilateral ones, which ultimately led to sector s contribution to GDP shrinking from 5% to just below 2 % and employment plummeting to 6,800 currently.[1] Clothing imports into Zimbabwe has grown steadily since the trade liberalisation measures were introduced in 1991. Asia has grown in importance as the source of imported yarns, fabrics and clothing. In addition, there is growing concern in the clothing sector of the continuous growth in the second-hand clothing market and illegal imports from within the SADC region. All these factors have crippled the textile and clothing industry in Zimbabwe leading to the reduction in the market share of locally manufactured products, factory closures and retrenchments. This paper reviews the impact of these adverse effects on the cotton-to-clothing value chain and suggests strategies to be adopted to repositioning Zimbabwe as a global competitor. Key words: Zimbabwe, imported, clothing and textiles, global competitor. 1
Introduction The Zimbabwean Clothing and Textile industry has been a major contributor to the growth and development of the Zimbabwean manufacturing sector and creating a lot of jobs not only in textile industries but also other related sectors such as cotton growers, spinners, weavers, dyers and finishers, manufacturers of chemicals etc. In the past few years, there has been a decline in the textile manufacturing sector due to the economic down turn and also due to the importation of cheap new clothing textiles from the Far East especially China [3,4, 6,7] and second hand products [3] from Europe. A study by Moyo [2] on the clothing and textile sectors performance, challenges, opportunities and its contribution to the countries economic growth between 2003-2007 indicated that the success of this sector was dependent upon the availability of raw materials, machine spare parts, Government policies, trade agreements, the economic environment and brain drain. Among the top six companies studied by Moyo [2] three are now closed and the rest operating at between 30-40% capacity. The RBZ annual report of 2004 indicated that clothing exports had gone down from a peak of US$ 139 million in 1994 to an estimated export earnings of US$14million in 2004 [6]. The economic down turn over the last decade has seen the proliferation of flea markets all over the country enabling even those of low income to be decently dressed as a result of the affordability of the second hand clothes. Figure 1: The cotton to clothing sector [1] The challenges experiences by the Zimbabwe cotton-to-clothing sectors in the value chain are listed in a-d [1] and the impact on the cotton-to-clothing sector shown in Figures 2-9. a. Cotton Farming 1. Acccess to machinery- there s no access to appropriate small-scale value adding machinery and lack of appropriate machinery for further processing of seed cotton (such as small scale 2
ginning plants or oil expressing) results in little value addition at the farm by small-scale farmers. 2. Inadequate yields- poor cotton yields per hectare, averaging 500-800kg/ha 3. Weak extension support- knowledge gaps on basic cotton growing practices 4. Outdated tools and machinery 5. Low efficiency of farmers in daily operations 6. Unconducive business environment- challenges in accessing credit, inadequate cotton pricing in place, No financial support available to farmers apart from ginners pre-financing scheme, Insufficient coordination of cotton farming activities. 7. Weak supply and availability of certified seeds. Over reliance on a single company that has no outlets in rural areas. Diverted use of inputs provided by ginners to farmers under contract farming schemes e.g fertilizers to different crops. 8. Weak infrastructure. Supply and cost of electricity, poor transport networks, little or no irrigation infrastructure due to high costs and lack of sources of water(dams). 9. Insufficient governmental support to small-scale farmers-input support schemes not available to small-scale and new cotton growers. 10. high domestic demand for ungraded cotton affects farmers attention to growing quality cotton encouraged by merchants who are willing to pay relatively high prices for ungraded cotton thus promoting side marketing. Figure 2: Trends in Zibabwean seed cotton production, 1989-2013 [1] 3
Figure 3: Cotton planting area and yields, 1989-2013 b. Ginning and seed processing Ginning companies unable to meet their seed cotton requirements as operations remains low due to: 1. Low profitability of ginning companies 2. Uneven approaches to quality management in the ginning subsector 3. Weak linkange with non lint cotton use-oil and other by- products 4. Need to improve farmer-ginner relationships, including provision of technical support. 5. Inadequate supply of seed cotton due to low yields-supply is at an average of 250,000 tons against an installed ginning capacity of 750,000 tons. This also affects the oil expressors as they fail to get adequate ginned seed to achieve economies of scale in the production of cooking oils,fats and cotton cake. c. Textile Sector 1. Low business efficiency in the Textile sector due to: Low productivity levels impacting on firms responsiveness to customers-obsolete equipment Low profitability due to high production costs caused by high cost of power, labour, transport, imported inputs such as dyed yarns and dyes. Local versus international lint prices.-local lint prices can be higher than international prices 2. Unconducive business environment Human capital- brain drain and insufficient interest in textile related education [Fig.4] limited financial support available to firms in the textile sector import of cheap fabrics from the Far East 4
lack of coordination within the Textile sub-sector fragile coordination between the textile and clothing subsectors illegal practices such as under valuing invoices and damping creates unfair competition. 1200 1000 800 600 Total Selected Male Female 400 200 0 Chemical Civil&Water Electronic Indusrtial Textiles Figure 4: Faculty of Industrial Engineering undergraduate Intake 2015/16 Yarn Products Figure 5 illustrates the value of cotton and synthetic yarn imports and exports[1]. Over the period between 2009 and 2013, imports of cotton yarn remain insignificant with a value of 136 000 USD in 2013. Exports of cotton yarn however appear to grow steadily since 2011. The value of imports of manmade fibre yarns is growing on average, however experiencing a sharp decline in 2012. [1] Figure 5: Import-export performance for Zimbabwe, yarn 2009-2013 5
Figure 6 : Zimbabwe Yarn export destinations, 2009-2013. [1] Figure 7 : Markets supplying yarn to Zimbabwe, 2009-2013 [1] d. Clothing and Fashion Zimbabwean clothing production unable to meet competitiveness and growth objectives and streamline socio-economic development due to: 1. low business business efficiency in the clothing sector low productivity levels impacting on the firms responsiveness to orders low profitability of business for firms 2. unconduncive business environment the clothing related education is insufficient and does not include the latest trends in the sector limited financial support available to the firms in the clothing sector 6
import of cheap garments/second hand [Figure 8 and 9] fragile coordination between the textile and clothing sub-sectors Ancillary industries-with the decline of the clothing industry, all the related industries such as sewing thread, button, zip and label manufacturers shut down as their market base shrank. 3. Disconnect of production with market requirements High risk of delays in order delivery Range and quality of local fabrics produced -Levels of quality often do not satisfy buyers requirements ( especially dyeing and finishing-i.e. shading and colour fastness is poor that fabric can only be used for basic, low value garments ordered in small quantities. Production characteristics are generally not adapted to market preferences Alignment with global fashion trends -The design of Zimbabwean garments products are outdated/lacks originality 4. Insufficient market entry [Table 1] Lack of visibility of Zimbabwean clothing products abroad Poor use of existing trade agreements Figure 8: Zimbabwean import-export performance, clothing, 2009-2013[1] The decline of exports due to: Decline of the clothing industry in general Lack of incentives to export to earn foreign currency The lack of supply of competitive SADC fabric to enable duty free access to the South African market. 7
The main exported products[1] are menswear (suits, jackets, trousers and shorts) and technical suits such as work suits, track-suits, ski-suits, swimwear and other garments. Also knitted and crocheted products exported to South Africa (64%), Zambia (15.5%) and Mozambique (6.1%). Figure 9: Shopping for second hand clothes [8] Figure 10: Shopping for new clothes at Flea Market [8] Table 1: Cotton to Clothing Exports 2005-2013 (US$000 000) [1] 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total % Lint 96 108 103 114 65 120 269 215 97 1187 83 Textile& Clothing 23 17 18 15 16 55 53 21 25 243 17 TOTAL 119 125 121 129 81 175 322 236 122 1430 100 8
Figure 11: Zimbabwe clothing supply markets, 2009-2013 [1] Recommendations 1. Role of Research Application of science in the solution of industrial problems both short and long term through research on various problems relating to the textile industry with a view of reducing cost, improving quality and ensuring optimum utilisation of material., machinery and manpower resources, product development is required. 2. Role of universities Tertiary institutions in cooperation with the cotton to clothing sectors have a key role to play to ensure that there is maximum gain from the research carried out on various problems relating to the textile industry with a view of reducing cost, improving quality and ensuring optimum utilisation of materials, machinery and manpower resources. 3. Role of Governments In order to resuscitate manufacturing activity and increase capacity utilisation levels, the cotton to clothing sector was identified as a strategic growth area [9]. However, the Government should go a step further and help Develop programmes of research and development (R&D) aimed at groups related to the cotton to clothing industries. Re-equip the tertiary institutions and the Standards Association of Zimbabwe (SAZ) Textile Testing Laboratories. 9
Attract foreign investment through government to government partnerships. Enforce the measures for the control of imports of new and secondhand clothing. Improve business environment by minimising challenges in accessing credit and put adequate cotton pricing in place. Upgrade infrastructure i.e. supply and cost of electricity, transport networks and irrigation infrastructure. Provide financial support to small-scale and new cotton growers by giving inputs that Conclusion are not currently available. The Zimbabwe cotton to clothing sector will continue to struggle against the stiff competition created by imports due to the high costs of inputs, high cost of finance, power challenges and use of obsolete machinery. Failure by local industries to attract direct foreign investment hinders the upgrading of manufacturing technologies. Higher education institutions in cooperation with the textile industry and other countries have a key role to play in the development of the required skilled manpower. In order to resuscitate manufacturing activity and increase capacity utilization levels, the Zimbabwean government identified the cotton to clothing sector as a strategic growth area and has come up with the Cotton-to-clothing strategy 2014-2019 [1]. However, the Government should go a step further and help develop programmes of research and development (R&D) aimed at groups related to the textile and clothing industry. References 1. Zimbabwe cotton-to-clothing strategy-2014-2019. 2014 2. S Moyo, Review of the factors affecting the Zimbabwe Textile Spinning Sector (2003-7), Final year project, National University of Science and Technology, Bulawayo, Zimbabwe, May 2008. 3. John Thorburn, Globalisation and the South African textile industry, Trade and Industrial Strategies (TIPS) Workshop on Globalisation, Production and Poverty in South Africa, Johannesburg, 24 June 2002. 4. Sally Baden and Catherine Barber, The impact of second hand clothing trade on developing countries, Oxfam,2005. 5. S Nkala, Textiles and Clothing Sector Brief Zimbabwe Last, Zimtrade iso certified 9001, 2008. 6. P Kamau, G Michuki, D McCormick and C Gatimu, Adjusting to Chinese ascendancy in the global clothing industry: Kenya s experience, International conference for East 10
African Cotton, Textiles and Apparel (CAT) Value Chain, North Coast Beach Hotel, Mombasa, Kenya, 1-4 th November 2011. 7. A Mukurazita, The impact of liberalisation of the cotton merchanting on the Zimbabwe textile industry, Final year project, National University of Science and Technology, Bulawayo, Zimbabwe, May 2007. 8. A B Nyoni,L C. Nkiwane and 3 P Gonde.The impact of imported new and second hand clothing on the Zimbabwe Textile and Clothing Industry. 9. Zimbabwe Industrial Development Policy 2011-2015., Ministry of Industry and Commerce Zimbabwe, 2010 11