COVID19News

Covid-19: Textile and clothing sector production levels down 40%

...turn to social media to market products

By Dumisani Nyoni

THE period from March 2020 to date has been very difficult for the textile and clothing sector in Bulawayo, mainly due to the Covid-19-induced lockdowns which saw the players closing shops for most of last year, as they were not considered essential businesses.

In a bid to contain the spread of Covid-19, the government has been imposing national lockdowns, beginning March 30, 2020.

However, beginning March this year, the government eased lockdown restrictions with many businesses, including the informal sector, now allowed to operate.

During the hard lockdown period, only essential services were allowed to operate while sectors such as textile and clothing, tourism among others were restricted as they were not considered essential businesses.

The textile and clothing sector, which has been hit hard by serious competition from second-hand wear and cheap imports, saw a number of companies closing and a number of people employed by this sector losing their jobs since March 2020.

Again, due to the outbreak of the Covid-19 pandemic, the country’s clothing and textile exports registered a 58% decline to US$17 million between January and August last year, data compiled by the country’s export trade promotion agency, ZimTrade, show.

The sector exported goods worth US$42 million during the same period in 2019.

Consumer demand was affected as people were asked to stay at home to avoid being infected by the virus.

Zimbabwe Manufacturers Association secretary-general Raymond Huni told CITE that the Covid 19 has not spared them as the textile industry.

“Production levels are below 40 percent as in maintaining social distance, a lot of departments are affected. Additional costs were added to companies in buying Covid 19 equipment by companies,” Huni said.

“Trade unions are ever asking for pay raises every month and as I write to you the union is demanding over 50 percent pay raise.”

“On production, the business is slow and some people are smuggling cheap imports mostly blankets for winter when local blanket manufacturing companies have enough stock to meet winter demand,” he said.

On this note, Huni said they were requesting if the Zimbabwe Revenue Authority (ZIMRA) could beef up its manpower to curb smuggling at the country’s ports of entry.

He said smugglers were using buses and long distance trucks to smuggle blankets into the country.

“Some well-organised groups import blankets but declare to ZIMRA on wrong tariff codes and pay less duty. This normally happens at Forbes Border in Mutare,” he said.

In its latest report, stockbroking firm Morgan & Co said the clothing and apparel industry continues to face significant pressures emanating from roadside business (RSBs) and the emergence of a cheaper second-hand market.

“We note that the seasonality of the business traditionally warrants stronger earnings performance in the second half, but the erosion of disposable incomes has shifted consumer expenditure to essentials such as food,” it said.

With the above said, Huni said the industry had hoped that the pandemic will be over soon if everyone complies with the World Health Organisation guidelines.

“The last issue is on price increases on locally-manufactured goods by other sectors. The Reserve Bank of Zimbabwe (RBZ) has an auction system and the rate of exchange is low but these sectors when charging they use unofficial rates of between 120 and 140 to US$1. As a result, prices will be unaffordable to many.”

Textile sector provides raw material in the form of fabrics to the clothing industry.

Clothing requires a large range of fabrics and could be classified generically as 100% natural  fibres (including cotton), 100% polyester fibres,  blends of the two, for example a blend of polyester and cotton fibres called poly-cotton fabric, and other fabrics made from other man-made fibres.

Some of the players in the textile industry are David Whitehead, Cotton Printers and Modzone Textiles.

Clothing retail chain, Edgars Stores Limited, recorded a 29,4 percent drop in units sold during the financial year ended 10 January 2021 to 2,4 million from 3,4 million in the prior year.

The rising cost of doing business, liquidity constraints, high cost of borrowings, Covid-19 challenges as well as generally low disposable incomes made the operating environment difficult for the business, the company said in the latest trading update.

Year to date turnover for the trading period to 10 January 2021 was down 17 percent in inflation-adjusted terms and up 494 percent in historic terms.

Demand for the quarter declined to 995 000 units from 1 224 000 units last year but was up from 585 000 units in the third quarter.

The group’s business units are Edgars chain, Jet chain, Carousel manufacturing and a financial service firm.

The situation is quite complex because consumer buying power has been eroded by inflation, low incomes and high levels of unemployment which affects credit sales.

Analysts opine that the future business looks depressed unless there is a spike in household incomes and sustained stability on inflation to improve consumer confidence.

Local clothing companies will continue to implement cost-cutting measures such as retrenchments, reducing retail footprint and floor space in current retail units, they said.

Foreign investors have already divested most of their local investments.

Archer Clothing Manufacturers factory manager, Thomas Kadiki said when there is lockdown and curfew; they get affected on the hours which they are supposed to work per day.

“Normally, we work 45 hours per week but when there is a lockdown,  for example, 6 am to 6 pm, our starting times change from 7 am to 8 am to allow workers time to travel from home and also finish two hours earlier to allow them to get to their different destinations before curfew times,” he said.

“In short, we lose three hours per day on the example I gave you above which has an impact on customer delivery dates. Currently, things are just normal.”

Archer Clothing Manufacturers is being owned by Paramount Garments.  

To keep workers safe, Kadiki said they were practising World Health Organization Covid-19 regulations like wearing of face masks, sanitization, social distancing and washing of hands, avoid touching of the face, temperature checks and sanitization on all entry points.

“And as leaders, we enforce the Covid rules and regulations. So far, we have not come across any case,” he said.

Speaking during the ZimTrade’s clothing sector “surviving Covid-19” webinar, Femina Garments marketing director Anne Bonett said as a way of coping with Covid-19, they were using social media to reach out to their customers.

“We used social media and our website to market our products. People were able to buy online from our website. We also doubled on the use of social media and WhatsApp Business. I don’t know how much other people use WhatsApp Business but for us it is massive,” she said.

“Our social media Facebook has been very good to us. A lot of people now know where to contact us from.”

Bonett said about 50% of their school uniform sales were sourced through social media.

She, however, said the challenge in Zimbabwe right now is that “we don’t have a reliable payment platform. That’s a big problem in Zimbabwe.”

“I’m working with two platforms, Paynow is one of them and then Ecobank is trying to work with the RBZ to come up with one. But it’s obviously a big problem when you don’t have a currency that is recognised outside our country,” she said, adding in the meantime people were trying to order through their website and then pay using whatever methods.

Covid-19 and other obtaining circumstances have brought in a new set of challenges for all business players in Zimbabwe.

Hence, the need for clothing companies to realise that dynamics have changed and the market now demands appropriate positioning to respond with agility to opportunities and challenges that arise.

For the industry to remain, analysts contend that it has to be pragmatic through developing strategies that coherently respond to the new normal.

Incomes are now at sub-economic levels and disrupting target markets through appealing to the emotional spaces of clients is the only way to go, they opine.

Zimbabwe Clothing Manufacturers’ Association said there was a need to produce, and to market themselves better as well as to defend their markets against imported goods.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button