Using an Agent or Distributor to Expand

One of the first steps that an exporter may wish to take in locating an agent or distributor in South Africa is to contact the U.S. Commercial Service in South Africa and register for one of the services specifically designed to meet the needs of U.S. client companies. South Africa offers foreign suppliers a wide variety of methods to distribute and sell their products, including using an agent (also known as a Commission Sales Representative, or CSR) or distributor.

In South Africa, the terms "Agent" and "Distributor" have a very specific meaning: “agents” work on a commission basis after obtaining orders from customers; distributors buy, carry stock and sell products directly to customers.

Agents often distribute durable and non-durable consumer goods, as well as some industrial raw materials. They may be particularly appropriate when products are highly competitive and lack a large market. It is common to appoint a single agent capable of providing national coverage either through one office or a network of branch offices. In addition to their role as the local representatives of U.S. exporters, agents should be able to handle the necessary customs clearances, port and rail charges, documentation, warehousing, and financing arrangements.

Local agents representing foreign exporters, manufacturers, shippers, or other principals who export goods to South Africa, are fully liable, under South African import control law, for all regulations and controls which are imposed on the foreign exporters. Local agents are required to register with the Director of Import and Export Control of the Department of Trade and Industry. It is important for a U.S. exporter to maintain close contact with the local agent to track changes in importing procedures and to ensure that the agent is effectively representing the sales interest of the exporter.

Typical commission rates for agents, (also known as a Commission Sales Representative, or CSR) CSR’s in South Africa depend upon the contract concluded and upon the representative's responsibility. These rates can range from 3 to 25 percent commission per concluded transaction. Companies sometimes pay a retainer fee plus costs plus an incentive scale on deals.

Distributors who buy for their own account and carry a wide range of spare parts often handle capital equipment and commodities such as chemicals, pharmaceuticals, and brand new products on an exclusive basis. Leading distributors often have branches throughout South Africa and sell to both wholesalers and retailers. In some cases, the distributor is also the principal with sub-agents or as a major user of the products.

When appointing a South African distributor, U.S. exporters should take care to find out if the distributor handles a competing product. In some instances, major South African corporations whose holding companies market products competing directly with American products have approached some U.S. Exporters.
In South Africa's competitive marketplace, it is essential that the U.S. exporter provide adequate servicing, spare parts, and components, as well as qualified personnel capable of handling service inquiries. In most cases, after-sales service should be available locally since potential delays often lead purchasers to seek alternative suppliers.

The U.S. Commercial Service has found that the most successful ventures entered into by U.S. companies have been preceded by thorough market research. This is an important first step before engaging in a search for agents or distributors. Once contacts are established, U.S. companies should visit South Africa since first-hand knowledge of the market and society is an advantage. Such a visit provides an opportunity for a personal appraisal of the prospective agent or distributor. U.S. exporters should carefully investigate the reputation and financial references of a potential agent or distributor and establish a clear agreement delineating the responsibilities of both the exporter and the agent.

Doing Business in South Africa

South Africa is a country of about 50 million people that is rich in diverse cultures, people and natural heritage. Enjoying remarkable macroeconomic stability and a pro-business environment, South Africa is a logical and attractive choice for U.S. companies to enter sub-Sahara Africa. The country covers 1.22 million square kilometers and is the world’s largest producer of platinum, vanadium, chromium and manganese.

South Africa’s success in holding the world’s single largest sporting event, the 2010 FIFA World Cup, with virtually no incidents involving security or logistics, has shown that the country is capable of undertaking – and successfully completing – major projects on time.

South Africa is the most advanced, broad-based and productive economy in Africa, and had a gross domestic product (GDP) of $287.2 billion in 2009 and is expected to grow by about three percent in 2011. South Africa accounts for 31 percent of Sub-Saharan Africa's GDP in 2010.

The South African economy is characterized by standards similar to those found in developed countries. Its service sector is well established and growing, and the economy is increasingly well managed with slow but steady industrial productivity gains. The banking system is stable and was largely immune to the worldwide financial crisis. The country boasts a well-developed physical infrastructure comparable to OECD standards. South Africa boasts a sophisticated financial sector with well-developed financial institutions and a stock exchange in Johannesburg (JSE) that ranks among the top exchanges in the world.

The United States plays a prominent role in the South African economy and is placed as the third largest trading partner behind China and Germany. The U.S. ranks third as a source of South African imports in 2009 at 7.7 percent, after China and Germany.

Bilateral trade decreased in 2009, reflecting downturns in both economies. U.S. exports to South Africa declined by 31.4 percent from 2008 to 2009, while South Africa shipments to the U.S. fell nearly 41 percent during the same period. The trade deficit with South Africa also declined substantially, from $3.4 billion in 2008 to $1.4 billion last year. (Source: U.S. Census Bureau)

The mature nature of the South African economy is reflected in the mix of economic sectors:

o primary (including agriculture, fishing and mining): 7 percent,
o secondary (manufacturing, construction and utilities): 20 percent; and
o tertiary (trade, transport and services): 73 percent.

Tourism may experience continuing growth in coming years, given its prominence on the world stage with the 2010 World Cup.

South Africa is integrated into the regional economy through its membership in the Southern African Development Community (SADC). In addition, the Southern African Customs Union (SACU) agreement with Botswana, Namibia, Lesotho, and Swaziland, first established in 1910, has also been renegotiated and ratified by all members.

The recent recession has weakened consumer and business confidence, although many of the sectors are improving off their 2009 performances. Consumers continue to concentrate on paying off their debt rather than making major new purchases. At the same time, structural reforms in general have increased the economy’s diversification and openness, bolstering its resilience to external shocks. The banking sector has managed to avoid any serious disruptions, due to its limited exposure to the U.S. and other foreign markets.

Constraints and challenges in African Countries

From a national perspective, the broader regulatory environment does not directly affect the manufacture of clothing, as it is a non-intrusive manufacturing process. However, the highly regulated labour market has a marked impact given the industry’s labour-intensiveness. In this regard wage rates, as well as the oft-cited ‘inflexibility’ of the labour market, appear to have a constraining effect on the sector. Many clothing firms are relocating to non-metro and decentralised areas (particularly in KwaZulu-Natal) where they are able to pay lower wages. This relocation has occurred in an attempt to compete with cheaper imports as a result of global trade liberalisation and lower wage rates in competitor countries. As Table 4 shows, South Africa has high labour rates when compared to competitor countries 15 . Furthermore, South Africa is not only competing with countries that have lower wage rates, they also have more flexible labour markets in terms of additional labour costs (such as overtime and shift pay, sick leave and pension contributions). These factors increase costs, decrease flexibility and reduce the ability of firms to compete effectively, particularly when competing in standard, commodity markets.

Other constraining elements include the South African textiles industry’s lack of competitiveness (with clothing firms forced to source from them due to high tariffs on imported fabric and AGOA’s three-stage conversion rule), the apparent indifference to local sourcing amongst major domestic retailers, the failure of clothing manufacturers to adhere to world class manufacturing standards, the failure of the industry to employ state of the art technologies; and skills deficiencies created by the perception of many professionals that clothing is a ‘sunset industry’ and hence a sector to be avoided when entering the corporate arena.



Industry opportunities 

Although the clothing industry has not performed well recently, it is important to reiterate its labour-intensiveness and the fact that it employs over 150,000 people. It is thus essential that policies and interventions be put in place to secure the sector’s growth and development, or that at least limit the losses that are likely to occur over the next few years. In this regard policy needs to be directed at first stabilising the industry, second re-establishing its foundations, and third providing an enabling environment for its future growth. The recent completion of a Customised Sector Programme (CSP) for the South African clothing and textiles industries holds significant promise in this regard, with the sector development strategy developed through the process identifying 26 Key Action Programmes (KAPs) capable of crisis managing the clothing and textiles industries’ present tenuous positions, re-establishing their foundations and then maximising the numerous opportunities that still exist. These KAPs are presented in Table 5, under each of the levels (critical, foundational and developmental) outlined above, as well as the seven strategic themes that capture their particular intent. For example, the two critical (or crisis management) strategic themes are recapturing domestic market share and maintaining exports. These two strategic themes then have seven and four KAPs respectively. The seven domestic market share KAPs encompass:

(a)Government engagements with multilateral forums to secure appropriate developing economy responses to the importing of distressed and under-invoiced goods, the implementation of customs’ regulations to eliminate under-invoiced and illegal imports, firm-level support for customs in respect of identifying under-invoiced and/or illegal imports, the establishment of a partnership between SACU member states to ensure policy and monitoring consistency, the maintenance of tariffs at existing levels, the aggressive implementation of already enacted country of origin labelling legislation and the associated establishment of a buy South African clothing campaign, and finally the close monitoring of duty credit certificate use through the lifespan of the Interim Clothing and Textiles Scheme. In terms of the maintenance (and even future growth) of exports, the four KAPs are the confirmation and then replacement in September 2006 of the Interim Clothing and Textiles Scheme, the pursuit of new and the expansion of existing Preferential Trade Agreements with key trading partners, the establishment of a project that fully explores African export opportunities, and securing greater levels of EMIA support for the clothing and textiles sectors, particularly when endeavouring to access non-traditional markets.

Not only will the realisation of this vision salvage the clothing and textiles industries, along with the 50,000 to 75,000 jobs that are likely to be lost if present trends continue, there is a real opportunity for the two industries to create jobs once their foundations have been re-established. Based on the industries’ increasing their employment by 25,000 over the period 2005 to 2014 (which is a conservative estimate), this would secure 75,000 to 100,000 clothing and textiles jobs (the majority – 50,000 to 70,000 - of which would be in the clothing industry). Given the estimated R1,411 million cost of the KAPs proposed, and for which we have been able to calculate likely expenses over a five year period beginning 2005, the total employment return on investment from the implementation of the CSP would be exceptional. Based on the lower estimate of 75,000 jobs being secured (50,000 in the clothing sector alone), each job secured would cost a total of only R18,817 over the five year period.

Provincial government support

Clothing has been identified as a key strategic sector in the Western Cape and KZN. In light of this, both provincial governments have set aside funding to support the industry. In the Western Cape, the primary project at present is the funding of a Cape Clothing Cluster, which has as its objectives (1) the fostering of joint action between clothing firms to achieve economies of scale not possible individually, and (2) the facilitation of knowledge enhancement through the exchange of firm-level expertise. These objectives pertain to four areas, each with two-year business plans - human resource development, manufacturing excellence, supplier development and capital upgrading. The KZN provincial government has followed the example of the Western Cape and is in the process of launching a similar cluster, although its focus encompasses clothing and textiles. Following the successful completion of its pilot over the last five months, the KZN Clothing and Textiles Cluster will be formally launched on the 1 st of August 2005. In addition to these Clusters, both provincial governments have funded a variety of smaller projects and research to obtain a clearer understanding of sector dynamics and policy issues.

Regarding empowerment within the clothing sector, CloTrade recently undertook a survey on the demographics of its members. The preliminary statistics from this survey in which 50% of its members participated reveal that:

1. A full 96% of clothing industry employees are PDIs. In addition, PDIs hold 79.5% of management positions, 93.5% of supervisory positions and 39% of directorships.

2. Males make up 16.7% of total employment and females 83.3%.   White owned private companies account for 59%, BEE companies 12% 14 , and foreign owned companies 3% of CloTrade members. The remaining 26% are either directly listed or wholly owned subsidiaries of JSE listed companies.

3. Although the survey is not representative of the industry, the results reflect the industry’s positive BEE and employment equity profile. However, a lack of confidence in the future of the industry appears to have prevented further employment equity and BEE progress.

It is the general view of the clothing sector that government policy is not providing a macroeconomic environment conducive to industry growth. The current strength of the Rand makes South African clothing exports less competitive in their destination markets with many exporters losing international contracts. The strong Rand also fosters increased domestic market competition through the availability of cheaper imported clothing. Most notably, this emanates from China, which now contributes over 70% of total South African clothing imports。

In addition, the uncertainty surrounding the DCCS’ replacement programme places exporting firms in a difficult position with regards to the viability of securing future export contracts. A second significant threat for the South African clothing sector is illegal imports, through dumping and the under-invoicing of imported garments. The South African clothing industry is currently protected by tariffs of 40%, but a common opinion in the industry is that as a result of the inability of the customs service to effectively police clothing imports, real levels of protection are around half the advertised level. Finally, and perhaps even more importantly, the sale of distressed and over-run goods into the South African market at massively discounted values (primarily from China) is having a devastating impact on local manufacturers, with Customs’ apparently incapable of responding to this threat, due to present WTO rules and regulations.

Global and local policy framework

Clothing factory in South Africa

Multilateral agreements

Multi-Fibre Agreement (MFA): On December 31, 2004 the MFA came to an end and with it the termination of all quotas on textiles and clothing trade between WTO member states. This is likely to significantly affect the apparel industries in southern Europe, as well as those developing economies’ apparel and textiles industries that have grown as a result of access to quotas, rather than genuine competitiveness. One of the major concerns is how China will behave after the removal of quotas. There is consensus that China is the nation that is most likely to benefit, with its clothing exports having already increased significantly since it joined the WTO in 2001, whilst it has the ability to produce a growing range of items, and has improved its capacity to meet international quality standards. In a quota-free world, experts predict that China’s share of world clothing exports may double in less than five years. Along with India, China is therefore expected to dominate global production, with preliminary evidence from early 2005 confirming their threat. India’s overall clothing and textiles exports increased 33% in January 2005, when compared against January 2004 figures, whilst China experienced an even more astounding 546% increase.

African Growth and Opportunities Act (AGOA): This is a US programme that allows certain non-reciprocal tariff preferences to 37 Sub-Saharan African (SSA) countries covering 6,000 product lines to 2015. Clothing is governed by a separate set of conditions and rules of origin. These rules stipulate that clothing has to be made from US fabric, yarn and thread, or from fabric, yarn and thread that is produced in an AGOA-beneficiary SSA country. However, a special rule applies to LDCs, allowing these countries duty-free access for apparel made from fabric originating anywhere in the world until September 2007. With the single exception of South Africa (and Mauritius until mid 2004), all 19 AGOA-beneficiary SSA countries that qualify for the clothing provision also qualify for this rule. Therefore, while clothing exports to the US from South Africa require triple-stage transformation to qualify for AGOA, all other eligible countries are only subject to a single-stage transformation 12 . This places South Africa in a disadvantaged position. Rules of origin tie the domestic textiles industry into the clothing production process and therefore any weaknesses in the textiles sector have a marked impact on the success of clothing exports.

National government policy

Duty Credit Certificate Scheme (DCCS): This is an export-incentive programme for the textiles and clothing industries that ostensibly ended on the 31 st of March 2005, to be replaced by an Interim Clothing and Textiles Scheme to run until the 30 th of September 2006. The DCCS was designed to encourage the outward orientation of the clothing and textiles industries by allowing firms to claim a remission of duty for proven exports 13 .

Alternatively the rebates earned could be sold to any other importer of garments or textiles. This resulted in the majority of credits being sold to retailers who paid as much as a 30-40% discount, which they then used to import garments, thus reducing demand for domestically produced apparel and ultimately hurting domestically oriented clothing firms. Despite DCCS benefits, the appreciation of the Rand through 2003 placed enormous pressure on clothing manufacturers, resulting in most firms being uncompetitive in their principle export markets by 2004. Additional pressure was also placed on the local market due to the surge in garment imports – facilitated in small part by the access of retailers to DCCS benefits. Prior to the expiration of the DCCS on the 31 st of March 2005 the clothing and textiles industries submitted a joint proposal requesting that the dti put in place a two-year Interim Development Programme for the two industries, with this programme retaining the core elements of the DCCS. The response thus far has been confusing, with verbal agreement given on the introduction of an Interim Clothing and Textiles Scheme that replaces the DCCS and terminates on the 30 th September 2006. To date, however, no official confirmation has been given to the two industries, creating widespread uncertainty as to whether it will, in fact be implemented, and what particular form it will take.

Market and trends of South Africa

The liberalisation of the clothing sector internationally has been controversial due to its significant socio-economic contribution in both developed and developing countries alike. However, clothing manufacture in most developed countries has already severely contracted and changed its focus. For example, the US, EU and Japan are the largest consumers of apparel worldwide, but while there is still an important apparel industry left in Southern Europe, in the US and Japan 85% to 90% of apparel is now imported.

The actual production of apparel has therefore moved away from developed to developing countries, with the commercial buyers that remain in the developed countries now controlling extended global value chains and becoming much more demanding. They insist on lower prices, shorter lead times and smaller minimum quantities, with this directly linked to the increasing sophistication of consumer markets in developed economies, as well as increasing market segmentation. The result of this is that as markets become more differentiated and fashion changes become more frequent, so manufacturers need to improve their responsiveness in respect of meeting these buyers’ demands.

The scale and scope of global clothing trade is illustrated by a number of important facts:
• Global clothing trade totalled $462 billion in 2003 and has grown at a compounded annual rate of 6.6% since 1990
• The US alone imported clothing worth $71.3 billion in 2003, up from $27.0 billion in 1990
• China and Hong Kong, which together totalled 33% of global clothing exports in 2003, increased their clothing exporting levels from $25.1 billion in 1990 to $75.2 billion Given the scale of clothing production globally, it is important to note that the South African clothing industry was built up under isolation with the domestic market driving production.

As such, it was never able to achieve scale economies. Furthermore, the industry was protected by an import substitution strategy and now that the economy is exposed to international competition it is comparatively inefficient, lacks capital, technology and innovation, and has high labour and management costs in relation to output. Liberalisation and the restructuring of the industry in the 1990s resulted in large decreases in employment, while productivity has increased through cost-minimisation and downsizing rather than production growth. Even the recent explosion in domestic retail sales amongst the major retail groups that dominate the clothing value chain has had limited impact on the sector due to the propensity of the retailers to import cheaper wearing apparel in an attempt to bolster their margins and market share. Moreover, whilst certain retailers appear to be guiltier of this approach than others, the trend is evident across all major retail groups. This is reflected in the fact that clothing imports increased 58% on 2003 levels through 2004. Conversely, South African clothing exports have generally been modest and primarily to the EU and US markets. The bulk of exports are basic, commodity items (such as T-shirts) produced because of preferential trade agreements that have provided South Africa with duty and tariff-free access, where competitor countries have generally been restricted. However, even under these conditions South Africa’s higher cost structure means that firms have found it difficult to compete with low-cost competitors, such as China, India, Indonesia, Turkey and Pakistan. Furthermore, with the end of the Multi-Fibre Agreement (see Section 4) these countries will no longer be constrained, placing South Africa in a precarious position, unless it is able to upgrade and improve its competitiveness.

Table 3 presents data on selected competitiveness indicators, comparing the performance of the domestic clothing industry relative to a sample of international clothing, South African textiles and South African automotive component firms. The data shows that not only is the clothing industry faced with major international challenges, but that it also has inherent competitive weaknesses. For example, compared to the international firms, South African firms perform poorly in relation to output per employee and total inventory holding levels. Compared to the domestic automotive component firms’ average, the clothing firms’ performance is weak in relation to total inventory, customer return rates, domestic customer lead times, delivery reliability and absenteeism. Moreover, the data illustrates that the sector lags many of the comparative indicators by a significant margin. Positively, that there is substantial scope for firms to improve their performance and thus bolster their competitive position.

Analysis of sector dynamics

The South African clothing industry is concentrated in three provinces: Western Cape, KwaZulu-Natal and Gauteng. According to National Bargaining Council statistics, as of June 2004 there were 827 clothing firms in SA, with 327 located in the Western Cape, 239 in the Northern areas, 219 in KwaZulu-Natal and 42 in the Eastern Cape 5 . Nationally, the sector comprises a number of well-established large firms, SMMEs and home industries. There is also a large cut-make-and-trim (CMT) industry in the Western Cape and KZN that range from large, well-established firms to small home industries. In addition, many of the smaller enterprises form part of the informal economy. Similarly, there is a diversity of fabrics that are used across the provinces, ranging from natural fabrics to synthetics and synthetic mixes. However, higher value-added fabrics (e.g. wool) tend to be used mainly in the Western Cape. Even though the clothing sector is concentrated in only a few areas, primarily the Western Cape and KwaZulu-Natal, there are some major differences between the industries in these provinces, as outlined in Table 2. 

Table 2: A comparison of the Western Cape and KwaZulu-Natal clothing sectors


The single most significant input into the clothing sector is fabric, which accounts for approximately half of the cost to produce a garment. This clearly ties the domestic clothing and textiles industries together, and even more so with various trade agreements stipulating rules of origin requirements for clothing exports (see Section 4). A constraint to the clothing industry is the shortage of domestically produced fabrics, as well as the limited variety of fabrics produced locally. These factors inhibit the ability of firms to meet the rules of origin requirements for exports under preferential trade agreements, and forces firms to import fabrics that are not produced locally. Furthermore, because these rules of origin tie the domestic textiles industry into the clothing production process, any weakness in the textiles sector has a marked impact on the success of clothing exports. A recent survey on the SA textiles industry 7 revealed that although the industry does have operational strengths, there are numerous competitive weaknesses that remain: Long lead times, poor delivery reliability and deteriorating quality performance. Without an efficient, supportive textiles industry, clothing industry expansion is constrained. Additionally, expansion in the export-oriented clothing.

industry should have a positive impact on the textiles industry – at least the part that supplies clothing production (about 48% of the SA textiles industry). 

Clothing is a labour-intensive sector, contributing 1.8% of overall employment in SA. Combined with textiles, it contributes about 13.4% of total manufacturing employment. As a result, overall employment is relatively large, while output per employee is low compared to more capital-intensive industries. Furthermore, the clothing sector requires a relatively unskilled labour force, with 82.2% of employment in the sector attributed to semi and unskilled workers, 13.4% to mid-level skill occupations, and only 4.4% to jobs requiring high-level skills. Nevertheless, there is a serious need to develop skills, particularly middle-to-upper management skills. Although the CTFL SETA through its Centres of Excellence programmes at the Durban and Peninsular Technikons, as well as Johannesburg University, support the skills base of the industry, these institutions are finding it difficult to secure sufficient support from industry to effect positive transformation. The clothing industry is particularly important to the economy because of its labour absorptive capacity and its ability to offer entry-level jobs for unskilled labour. However, the rapid pace of job losses is a major concern. According to a recent Western Cape clothing industry report (the Ralis report), if employment trends continue the sector will disappear by 2012. While this is clearly an overstatement, the general principle is correct: This is a sector the South African economy is slowly losing. Based on current trends we estimate that the two industries are set to lose between 50,000 and 75,000 jobs in the formal and informal sector over the next nine years.

A number of institutions support the SA clothing sector. However, these institutions are fragmented and often act as lobbying associations. Institutions include:

SACTWU: Southern Africa Clothing and Textiles Workers Union   Clothing Manufacturers’ Association (CMA): Employers organisation that is the bargaining council partner to SACTWU  

CMT Employers’ Association: Employers association in the clothing industry

Bargaining Council for the Clothing Industry: Employer–employee regulatory council for the clothing industry  
CloTrade: The Clothing Trade Council of SA (previously Clofed) was formed in 2003 by clothing manufacturers to be the collective voice of members to interact with government and other stakeholders in respect of trade related matters

Industrial Development Corporation (IDC): The IDC has a Textiles, Clothing, Leather and Footwear Strategic Business Unit that is committed to playing an active role in accelerating the development of this industry

Garment Manufacturers’ Association: Association of larger Western Cape CMTs

Clothing Industry Export Council: An initiative of TISA to assist exporters. In collaboration with EMIA, it provides funding for initiatives such as trade missions and exhibitions  

CTFL SETA: Clothing, Textile and Footwear Sector Education and Training Authority  

CSIR: Supports clothing and textiles through, for example, the National Fibre, Textile and Clothing Centre, which promotes growth and global competitiveness of the South African textiles pipeline.

A Strategic Assessment of the South African Clothing Sector

1. Overview of sector trends
TIPS data, as presented in Table 1, shows that the South African clothing sector has performed poorly. By comparing the average of the indicators for the period 1994-8 with the average for the period 1999-2003, it is clear that the sector’s performance has deteriorated. In particular, there has been deterioration in r
eal value added at basic prices (10.4%), real exports (4.4%), employment (0.6%), output per employee (11.9%), remuneration per
employee (6.8%) and gross mark-up (7.8%). Interestingly, both exports and employment increased (by 1.8% and 1.1% per annum respec
tively) from 1994 to 1998, but declined (by 8.0% and 1.1%) from 1999 to 2003, while real value added declined consistently over the two periods. Real output per employee declined from R67,935 to R60,716 between the two periods, whilst remuneration per employee also fell (from R18,935 to R17,224).

In contrast, there has been an improvement in the GDFI output ratio, the fixed capital stock output ratio and productivity indicators between the two periods. Although the GDFI output ratio grew by 50%, this growth in investment was from only 0.02% to 0.03% of output.

Average fixed capital stock similarly grew from an extremely low 0.11% to 0.13% of output (or 18.18%). Over the 1994 to 1998 period, the average productivity of labour, fixed capital and multi-factor productivity were all exceptionally low, with less than zero units of output produced by each. For the 1999 to 2003 period, the productivity index for each indicator was positive, although still low. Labour productivity reached an average of 0.67 units of output
per employee, fixed capital productivity rose to 0.6 units and multi-factor productivity improved to 0.58 units.  Regarding imports and exports, Table 1 shows an increase in the export-output ratio, import leakage (the amount that is imported to satisfy local demand) and the import minus domestic demand ratio (import penetration). The data show that exports increased from 11.27% to
19.97% of output over the 1994-8 to 1999-2003 period, whilst imports as a proportion of local demand declined from 10.26% to 9.11%. In summary, the performance of the sector over the two periods under review has been poor. Not only has real value added and real exports declined, so has employment.

These overall trends (although not the absolute values) are supported by additional statistics from Statistics South Africa and the dti database. According to these data sources nominal clothing sales increased from R10 billion in 1995 to R13 billion in 2003, but the real value of sales actually declined from R11.8 billion in 1998 to R10.4 billion in 2003, a 12% decline. Employment in the clothing industry has followed a volatile, negative trend, falling by 11.5%, from 125,181 employees in 1994 to 110,739 in mid-2004 – a loss of 14,442 jobs. However, it is important to note that official statistics are likely to underestimate total clothing industry employment due to the large number of informal, micro and home industries that are not captured. Based on the proportional breakdown of formal versus informal clothing sector employment in the September 2003 Labour Force Survey and then extrapolating this across to formal employment levels as indicated by Stats SA, we estimate total clothing employment to be 158,879. In contrast to the data presented in Table 1, output per employee levels calculated using Stats SA data also provides a higher average of R80,001 per employee for the 1999 to 2003 period, and an annual average growth of 3.48%, reflecting a positive trend.  The clothing sector performs well in terms of capacity utilisation, with average utilisation rates of 85% over the 1990-2003 period. Nevertheless, capital expenditure on new assets has been exceptionally low at an average 1.4% of sales from 1992 to 2002 3 . Although the clothing sector is labour-intensive, it is still necessary to invest in capital, technology and innovation to become internationally competitive, especially in light of the constantly changing global environment. Lastly, there has been an increase in the export propensity of firms, as well as an increase in import penetration. Although the industry’s export performance has improved since the early 1990s, it remains modest, reaching 1.4% of total manufactured exports in 2003. Additionally, the demand for clothing is price elastic and therefore the recent appreciation of the Rand has resulted in a loss in export volumes. With regards to imports, the nominal value of clothing imports nearly tripled from 2000 to 2004, reaching R3.9 billion 4 .

A traditional black South African wedding

Check the following interview with Dorah.

S: Sheila D: Dorah

S: Um, Dorah, you said your cousin was getting married yesterday...
D: Yeah.
S: ...in South Africa.
D: Yeah.
S: OK.  Is she getting married in a township or...?
D: No, it’s in a, in a village.
S: In a village.  OK.
D: Yeah, it’s in a village.
S: Right.  Is that near Johannesburg?
D: No, it’s about um, one and a half hours from Pretoria.
S: OK.  Right.
D: In a village.
S: And so she’s your cousin.  Is she your mother’s sister’s daughter, or...?
D: Yeah.  
S: Right.  OK.
D: It’s my mother’s sister’s daughter.
S: OK. Now, I think weddings in South Africa are very different to weddings over here.
D: Yeah.  Yeah, they are.
S: Yeah, so tell, tell me about this wedding.
D: OK.  Um... 
(clears throat)
Like er...  yesterday, which was the wedding day...
S: Mmm, hmm.
D: ...um, at the bride’s place.
S: Right.
D: So what happens is, prior to, to, to, to the wedding...
S: Mmm, hmm.
D: ...the wedding, the preparation...  some of the preparations um, it’s like people will be singing, practising their,
their...   There’ll be some dance...
S: Mmm, hmm.
D: ...that they have to practise and some songs to sing.
S: All, all for the special day.
D: Yes.
S: So they’ve been, they’ve been practising for quite a long time.
D: Yeah, yeah, for a long time.
S: OK.
D: The....   What do you call the...?
S: So you’ve got the bride and the groom.
D: And the other ones
–
 what do you call?
S: The bridesmaids.
D: The bridesmaids.  The, the bridemaids and the... the bridesmaids and the...
S: Groom and the...
D: Yeah, they will practise.  There will be some, some steps, some moves that they have to do.
S: Uh, huh.

D: So they will practise for maybe two or three months before.
S: Really?
D: And some songs.
S: Uh, huh.  Special songs for the day.
D: Yeah.  For the, for the... yeah.
S: OK.
D: And it’s, it’s quite serious.
S: Mmm.
D: You know, there, there will be days that they will prepare the goat, prepare... practice dance, singing, you
know, just to make the day...
S: ...really special.
D: Yeah.
S: And on the day of the, of the wedding on the bride’s side in the morning the, the family from the bride’s
groom...
S: Mmm, hmm.
D: ...have to come to the bride’s place early in the morning.
S: Well, when you say ‘early’, what, 10 o’clock or...?
D: No, around um, 5, 6.
S: 6?  In the morning.
D: In the morning, yeah.  And in the olden days they say it used to be around 4.  It’s our tradition in, in my...
people.
S: Uh, huh.
D: They would come in the morning and then there is um...    Um, I won’t say it’s, it’s a present, but, it’s um... 
It’s one of our traditions.  There will be...  an offering –
 if I may call it?
S: Mmm, mm.
D: ...they will give them
–
 a sheep or a goat.
S: Right.
D: It’s for them and then they have to slaughter it.
S: So they give them a live sheep?
D: Yeah, a live sheep or a live goat.
S: To the...  Who, who brings the sheep or the goat?  Is it the...
D: It’s there.  It’s, it’s there.  The, the, the, the girl’s family.
S: Yeah.
D: They’ve, they’ve got this to give to the bri...  husband’s
-to-be.
S: OK.

South Africa awesome bathroom let you and the lion be companion

Now some people are very critical for the bathroom environment, not for staying in a hotel, but the bathroom. Common bathroom, it can let you drink a glass of champagne in the tub to enjoy some romantic. In fact, there is such a bathtub you do not need to take diving equipment, then you can see the bottom of the sea fish, do not hustle to take risks, you can see a lion walking on the prairie, do not visit the museum, you can admire the paintings of Renaissance masters. All these are true, as long as you soak in a hot bath, lying in the bathroom can be done.

Lion Sands Ivory hostel locates in South Africa Lion Sands Reserve which for lion protection, Kruger National Park Sabie river bank, this house, described as the perfect place to chill. Surrounded by all-glass bathroom design, you can take a shower while relaxing bubble bath, while the lions, hippos and other animals company your side. Watching them roam free in their natural habitat, at the same time you can live comfortably on a romantic luxury hotel and admire the beautiful scene, just simply heavenly feeling.

This is the address of this incredible bathroom, check it out if you are interested.


Address: Kruger GateRoad (R536), KrugerNational Park

4 Great Meanings of Wedding Diamond Ring

"A diamond is forever treasure," diamonds, as essential items of marriage, do you know the meaning of diamond in wedding ring? Wedding ring plays a role to connect the soul of couple in married life, you may wish to look good moral behind the ring when you are prepared to select it.

1, representing the unlimited right

People use ancient Greek etymology adamant to name it as diamond, meaning that hard material inviolable. Since the diamond is very hard, people take the diamond as extraordinary ability, it is very strong, not only indestructible, but also invincible. Thus, in Europe hundreds of years ago, only the king to wear diamonds in order to symbolize power, majesty and bravery, and even think that wearing a diamond can be invincible.

2, symbol of pure love

Diamond, pure transparent, enduring, like a lover's bright piercing eyes, affectionately watching you. It is a sign of pure love, expressing eternal pursuit of love and loyalty.

3, represents the prosperous and developed

Diamond represents prosperity, from the Star of South Africa. In 1869, the discovery of Star of South Africa which original weight is 83.50 kt that laid the foundation for the South of wealth. It also leads huge numbers of people to dig diamond in South Africa, and attracts people from all over the world came to South Africa to find wealth, it plays an important role in prosperity of South Africa.

4, mark of extraordinary ability

In geology, according to the relative hardness of the nature of the hardness of minerals into 10 hardness, as the standard stone 10, diamond is the hardest, but also the only crystals of 10 hardness. The hardness of diamond hardness is 150 times of sapphire(9) and 1,000 times of crystal hardness (7). Therefore, people take the diamond as a sign of extraordinary ability, it very strong, indestructible and invincible.