Ugu District Clothing and Design

Industry Strategy

JUNE 2014

Designers

(Proposed KZN FC)

Retailers

CMT’sFormal Textile and Clothing Firms

(KZN CTC)

Clothing Co-ops

1) Formal firms2) Designers3) CMT’s4) Clothing and related co-operatives5) Retailers

Figure 4.2 - stakeholders in the KZN value chain elements:-

DesignDesign

Design +

Small Retail

Design +

Small Retail

Design +

Small Mfg

Design +

Small Mfg

Design +

Small Mfg +

Small Retail

Design +

Small Mfg +

Small Retail

Figure 4.3: Nature of Design Houses

Different ways in which designer firms can exist :-1) Design house2) Design house which handles small retail3) Design house which handles small manufacturing4) Design house which handles both small retail and small manufacturing

CMT

Big

CMT

Big

CMT

Medium

CMT

Medium

CMT

Micro

CMT

Micro

CMT +

Design

CMT +

Design

CMT +

Small Retail

CMT +

Small Retail

CMT +

Design +

Small Retail

CMT +

Design +

Small Retail

Different ways in which CMT (manufacturing firms) can exist are:-1) Big CMT’s2) Micro CMT’s3) Medium CMT’s – can include design and retail activities

Figure 4.4: Nature of Manufacturing Houses

MethodologyQuestionnaires

Completed

Number

CMT’s 25

Designers 25

Date Attendance Group

14th March 2013 10 CMT’s

18th March 2013 16 Designers

20th March 2013 11 [5 cmts + 6 designers Combined

25th March 2014 17 Co-operative members from 4 co-ops

31st July 2013 16 Engagement with Stakeholders

15th November 2013 4 Engagement with LED Technical team

Focus Groups and Engagement:

Quantitative Analysis

Quantitate Data Presentation1) Service provided by respondent2) Number of employees3) Gender Break-up of employees4) Race Break-up of employees5) Nature of employment6) Monthly Pay7) Hours worked per week8) Benefits of employees9) Skills Proficiency10) Current number of employees in each category11) Skills required12) Machine Handling13) Number of staff hired and separated14) Qualification of employer

14) Qualification of employer

15) Employer’s years in Business

16) Employer’s years in previous service

17) Employers Business qualification

18) Business acumen rating

19) Model of Machinery

20) Number of Machinery

21) Required number of Machinery

22) Repair bills of Machinery

23) Downtime of Machinery

24) Volume of production

25 ) CMT Rate earned

26 )Percentage of rejects

26) Clients

27) Clients Location

28) Value of Business

29) Items of production

30) Timeframe of production

31) CMT Unit price

32) Percentage of waste

33) Details of finance

34) Costs

35) Costs/ Profit and Turnover

36) Turnover and Profit Trend 2012

37) Compliance

CMT's on database 34

CCMA member CMT's 20

Surveyed CMT's 25

Focus group CMTs 10

   

Designers on database 84

Port Shepstone designers 41

Margate designers 17

All other locations 26

Surveyed designers 25

Focus group designers 16

Estimated Universe of designers 300

   

Co-ops on Database 23

Hibiscus Local Municipality 9

Umdoni Local Municipality 7

Umzumbe Local Municipality 4

Ezinqoleni Local Municpality 1

Umzwabantu Local Municipality 2

Vulamehlo Local Municipality 0

Surveyed co-ops -

Focus group with co-ops members from 4 co-ops 17

Table 9.1: Snapshot of Clothing Industry Firms in Ugu District, 2014

1) Preliminary verbal inputs – from CMTs

2) Preliminary verbal inputs - from Designers

3) Insights from - CMTs

4) Insights from - Designers

5) Insights from interaction - btw CMT’s & Designers

6) Mini Case

Qualitative Analysis

Insights for Strategic InterventionsCMT’s:1)Compliance2)Scarcity of skilled labour3)Cost of Rentals4)Cost of Utilities5)Absenteeism of Employees6)CMT prices7)Financial assistance8)Multi-Purpose Centre9)Working with Designers10)CCMA and Bargaining Council

Designers:

1)Geographic Spread2)Rentals3)Machines4)Product range5)Access to Fabric6)Production and Marketing7)Common Vision

STRATEGIC FRAMEWORK

STRATEGIC INTERVENTIONSTable 11.1: The 8 Step Intervention Process

Step 1 - Forming the Project Steering Forum

Step 2 - Developing the Value Proposition

Step 3 - Developing and Leveraging Core Capabilities [Through training &

incubation

Step 4 - Integrated Manufacturing - Multipurpose Clothing Support Centre

Step 5 - Development of Partnerships and Alliances

Step 6 - Brand Development

Step 7 - Market Access

Step 8 - Industry Development Programmes

Diagram 11.1: Multipurpose Service Centre and Incubator

Various centres can specialise as follows:-

1)Marburg – Main Multi-purpose Production and Support

2)Port Shepstone – Retail

3)Margate – Incubation

4)Gamalakhe – Training

5)Scottsburg and Harding – Incubation [phase 2]

DIAGRAM 7.2: Community Based Manufacturing

Incubation of micro enterprises involves Access to:-

1)Workspace2)Machinery3)Technical skills4)Business skills5)Markets6)Finance7)Warehousing8)Coaching and Mentorship9)Production Management Techniques e.g. JIT, Lean etc. 10)Co-operative liaison11)Specialist services e.g. NCPC – energy efficiency12)Miscellaneous services

Step 7: Market Access: This can be facilitated by:- 7.2.1: Supplier Readiness Programmes:

7.2.2: Enterprise Development Programmes with Retailers: •Supplier Credit•Early Payment•Expenses towards modernisation•Expenses towards Skills Development – Technical as well as Business Skills

7.2.3: Local Market Activation:

•Fashion Shows •Buyer Fairs•Retailers

Step 8: Industry Development Programmes:

8.1 Incentives Programme•Production and export incentives [DTI]•Awards – Productivity, Labour, Innovation

8.2 Assistance Programme•Micro credit•Government procurement•Garment beneficiation

Weaknesses within perceived strength of China are:-

1) Price Weaknesses2) Cost Increase3) Response Time4) Customisation5) Market Preference6) Linkages with Other sectors

Given the experience from Newcastle, it may be beneficial to bring in Chinese companies as investors into the Ugu Clothing Manufacturing Value Chain.

Potential Partners include :-

1)Ugu District Municipality2)KZN DEDT3)KZN Fashion Council4)KZN Young Designers5)DTI help desk6)Coastal Clothing Manufacturers’ Association [CCMA]7)SETA help desk8)Esayidi FET College9)Compliance desk [Bargaining Council]10)Textiles Support Centre [Clotex, Cape Town]11)Ithala12)SEDA13)Anchor Retailer [Big]14)Saris for Good Karma [charity based]

No. ITEMEstimated Budget Scope

Step 1 Forming the Project Steering Forum40,000 Petty Expenses, Registration, Legal Fees,Meeting Expenses

Step 2 Developing the Value Proposition 40,000 Workshop, Meeting Expenses, Report Writing Work

Step 3Developing and Leveraging Core Capabilities [Through training & incubation] 750,000 Training Fees, Venue, Refreshments

Step 4Integrated Manufacturing - Multipurpose Clothing Support Centre 3,000,000

1 District Hub, 3 Satellite hubs. Equipped with machines, warehousing

Step 5 Development of Partnerships and Alliances 75,000 Workshop, Meeting Expenses, MoU Drafting

Step 6 Brand Development250,000 Graphics, Design, Research, Website, Marketing Materials

Step 7 Market Access, Supplier development 1,000,000 Advertising, Event Management, Displays,Hospitality

Step 8 Industry Development Programmes 750,000 Awards, incentives, Events, Training, Accreditation

TOTAL 5,905,000

Indicative Business template

Notes:

These are only indicative budgets to guide the development of a Business Plan.

This is not a business plan, but guideline to broad cost centres

To be balenced between available resources and Scope of the programme

It is more cost efficient to subsidise or partner with Private Sector players than run own operation

Scope and Time will determine service provider's quotes Delays would lead to escalations

The approach should be to use this as seed funding to leverage larger private sector resources

An entrepreneurial appraoch needs to be taken

District Hub

District Hub Focus Area Item Scope Cost TotalSupport other hubs Space 1000 sq mtrs 100,000General Mfg Machinery Shared Key Machines+Basic 300,000

Staff Co-ordinators+Hub 250,000Others 100,000Furniture Storage 50,000Training Central Trg + Productivity 100,000 900,000

Local Hub Beach wear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000

Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000

Local Hub Sleep wear, Inner wear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000

Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000

Local Hub Workwear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000

Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000

Total Estimated Budget 3,000,000

Ugu District Clothing Manufacturing Incubator

1. Bankable Business Plan document

2. Project Steering Committee formation

3. Site identifications

4. Investor liaison

5. Funding arrangements

6. Entity registration

Next Steps towards the UGU DESIGN AND CLOTHING CLUSTER:

QUESTIONS…