CAPE TOWN — The possibility of Africa becoming a global manufacturing power was a key focus of the inaugural Source Africa Trade Expo.
The event was aimed at creating a platform for more than 160 textile, apparel, footwear and accessories manufacturers from 15 African countries to "showcase their world-class products to an international and regional audience of professional buyers," said William Scalco of LTE Africa, which organized the event.
Supported by the USAID Southern African Trade Hub, Source Africa partnered with the American Apparel & Footwear Association as well as the African Cotton & Textile Industries Federation. Speaking during the plenary session on April 9, Erica Barks-Ruggles, Consul General of the U.S. in Cape Town said that "South Africa has attracted buyers from around the world to southern Africa because it's the gateway for Africa...although there is competition from Nigeria and Ghana these days. But it remains the gateway because of the quality, because of the value, because of the sophistication of the products that can be found here, as well as the consistency of the infrastructure."
Barks-Ruggles emphasized the support that the U.S. government has extended to Africa's textile, apparel and footwear industries, citing the significant role the African Growth & Opportunity Act has played in strengthening the continent's garment industries while also encouraging investment. "Since 2001, total exports from Africa to the United States have increased over 550 percent," she said.
She acknowledged that even starting from a fairly small base translated to $53.7 billion in 2011 from $8.1 billion in 2001, and 300,000 jobs created in Africa. While oil exports accounted for most of this increase in exports, most of the growth in jobs and economic development occurred in the sector of nonenergy exports.
"Textiles and apparel accounted for more than $850 million in exports from Africa to the United States in 2011, more than double the level of 2001, although a decline from a peak of more than $1.6 billion in 2004," said Barks-Ruggles, who served as the point person in the White House from 1996 to 1999 in order to secure the passage of AGOA.
"Garments are a major AGOA success story for Southern Africa," she said. "Lesotho, Swaziland and Mauritius, in particular, developed garment industries around AGOA and now employ thousands of sewing machine operators making apparel for some of the largest and best-known brands in the U.S., including Levi's, Wal-Mart, Gap, Old Navy, Victoria's Secret, Target, Calvin Klein, Gloria Vanderbilt, Vanity Fair and Land's End. Mozambique and Botswana have developed strategies to follow the examples of their successful [Southern African Development Council] neighbors."
Moderating a panel discussion, Steve Lamar, executive vice president of the AAFA, asked what role preference programs have in driving or supporting sourcing from southern Africa.
Angela Chew, senior vice president of global sourcing and product development for Destination XL Group, said, "You can never replace all of China, so what we do is we spread the business risk among eight ASEAN countries and Latin America."
Chew noted that her company was new to this region. "When you're moving out of China, there are many places to go to — there's Vietnam, there's India, there's Pakistan, there's Bangladesh" although social issues plague that country. "When we look at a factory, certainly we are looking at the quality, deliveries and cost structure," she added. "Certainly duty-free and quota-free — it's very attractive, but it's not the most essential in my opinion."
Lamar asked Philip Krawitz, executive chairman of Cape Union Mart, a leading manufacturer and retailer of outerwear in South Africa, about the country's role as the "S" in the BRICS economic bloc, which is "often identified as a key economic market for global brands to develop consumers."
With 60 million people living south of the equator who have access to international media — and in effect are connected to the rest of the world like never before — demand is growing at an unprecedented rate, said Krawitz. He also believes that "China would ultimately make for the Chinese market. If Chinese growth continues at the 7 percent levels they've been talking about and the Chinese one-child policy seems to be placed in the back burner, Chinese population will grow and China will be hard-pressed to meet its own production needs. Those of us who have been importing from China will see that prices have risen dramatically along with restrictions like lack of flexibility...Now those are unique opportunities for the African continent because we can be more flexible. We can certainly be competitive. In my own company, our buyers have a choice whether to buy anywhere in the world or our own factory, allowing a maximum preference of 10 percent. I can tell you that our factory, we've sold out for the whole of this year and most of next year."
Ultimately, buyers were interested in seeing whether "Made in Africa" would indicate quality. Claire Davis, vice president of technical design and outlet sourcing for Chico's, said her company had never sourced from Africa, but she was ready to see what the continent had to offer.
"We're always open to considering new sourcing opportunities," she said. "But the product has to meet our standards."