S&V Weekly Newsletter Vol.4 No.28, July 16, 2018

This Newsletter is sponsored by SAFLIA

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Footwear strike continues into second week

Durban (SA) – The strike by the 2 unions in the Footwear Sector of the National Bargaining Council of the Leather Industry has entered its second week. NBC general secretary Gerald Naidoo said neither side had changed its bargaining position.
       While most factories are closed, some have partial attendance, or have worked some night shifts or over the weekend. Since many factories are currently on short time, some have opted to treat the strike as an extension of that. One factory reported "normal Monday absenteeism", and the manager was surprised to learn that the strike was still on.
       S&V approached the employers' association, SAFLIA, and the unions, NULAW and SACTWU, for comment. NULAW had not responded at the time of writing.

SAFLIA executive director Jirka Vymetal wrote: The strike is the last thing that SAFLIA hoped for as it causes hardship on both sides and in the end nobody is a winner.
       Most footwear manufacturers are working short time due to depressed sales and this is reflected in the annual (footwear) manufacturing statistics which show that the total local manufacturing in the 2017 calendar year reduced by 1.7%.  This reduction in 2017 is the first year since 2011 that we had negative production in the footwear industry.  All indications are that the 2018 production numbers will reduce further which is placing massive strain on the industry as a whole.
       Our Footwear Sector has always been very accommodating when it comes to increases.  In fact since 2003 we have always given above the annualised CPI inflation percentage, on average the excess is in the vicinity of 2% every year. During tough economic trading conditions, this is not sustainable, therefore we consider the 6.25% offered this year to be fair. It is still above inflation for this year.  Our sector pays the highest wage rates compared to other associated sectors. For example an entry level general worker in the Footwear Sector earns R1,533.06 per week or the equivalent of R6,638.15 per month. The Tanning Sector pays R1,212.54 per week (R5,250.30 per month) and General Goods & handbags R1,031.57 per week (R4,466.70 per month).
       So even if our wage percentage offer (for this year) is a little less than the other sectors, the Rand value is still higher.
       Hence the opinion that it is a fair offer.
       What is of great concern is the level of violence, intimidation and attempted arson at certain manufacturers this time round and this we find unacceptable. We made a special request to the unions to take into consideration section 69 of the LRA. This seems to have been ignored.

SACTWU general secretary André Kriel wrote: The footwear sector national wage strike by the Southern African Clothing & Textile Workers Union (SACTWU) and the National Union of Leather & Allied Workers(NULAW)  entered its 6th day today, 16 July 2018.  Approximately 10 000 footwear workers are on a legally protected strike, in protest against the employers’ final wage increase offer of 6.25% for 2018.
       The strike commenced at 10h00 on Monday 9 July 2018, following a strike ballot conducted by the unions, in which between 82% and 86% of workers voted in favour of strike action.
       At the time of writing, there was no end in sight for the strike. Employers had not revised their final offer of 6.25% and the unions had stuck to their demand of a better increase for footwear workers.

KKI, Mosstrich in merger talks

Mossel Bay (SA) – The major leather and meat players in the ostrich industry, Klein Karoo International (KKI) and Mosstrich, which includes South Cape Ostrich Tanning (SCOT), have agreed to a merger, subject to approval by the Competition Commission.
       Mosstrich MD Francois de Wet said negotiations began in November 2017.
       "There have been several discussions on a possible merger over the last 15 years, but they never succeeded for a wide variety of reasons," he said. "If the merger is approved by the commission, the combined business will have a new name, although the existing brands will be available for use. It would be premature to say more on what a combined business would look like.
       "The main driver behind the intended merger is the decline in size of the South African ostrich industry.  From 2000 – 2010 we slaughtered and processed on average 240 000 ostriches per annum. From 2011 to date, the average dropped to around 160 000, with an expected slaughter number of 130 000 for 2018/19.
       "The combined forces of Klein Karoo International and Mosstrich (including its tannery SCOT), would ensure more effective new market development, more effective distribution of workload to ensure sustainability for the processing units, maximization of revenue on the international market and ultimately stabilization of the industry to ensure better sustainability for ostrich farmers.
       "The current ban on meat exports due to Avian Influenza and the subdued demand for exotic leather pose big challenges. The merger is subjected to approval of the Competition Commission and a decision is expected by end September."

Bolton Footwear invites you to an exclusive preview of their 2019 Winter Range Showing
Venue: Kingsmead Cricket Stadium – KZN
Date: 01 - 02 August 2018
Viewing time: 9am to 6pm (Wednesday and Thursday)

Venue: The JHB country club – Auckland Park
Date: 05 - 06 August 2018
Viewing time: 9am to 6pm (Sun and Monday)

Venue: The River club – Obs Cape Town
Date: 07 - 08 August 2018
Viewing time: 9am to 6pm (Tuesday and Wednesday)

To View please contact your Bolton agent.

They Said It

"I thought I was going to be a millionaire in 6 months when I started." - Asekho Twaku, El Elyon Leather & Clothing in East London, speaking during Source Africa.

"I don't care what [Apeco MD] Mark [Gibbings] thinks. He's in Pinetown and I'm here." - Apeco Western Cape sales director Voden Wearne on why he was hobbling around Source Africa on crutches instead of out selling.

Exchange rates

Source: http://www.x-rates.com/calculator/

Joe Powell (centre), formerly of the Footwork division of Intershu, celebrated his 85th birthday in Trafalgar on the KZN South Coast on Sunday. Among the guests were 2 other footwear retirees, Norman Norris (left), formerly of Urban Zone, and Mike Wakeling, formerly of Matchpoint Agencies.

16/07/1954: Lex Devlin, emigrated, formerly ACA Threads, PE.
16/07/1956: AR Noorbhai, Razno Agencies, Johannesburg.
16/07/1974: Marisca Ras, The Health Shoe Shop, Pretoria.
17/07/1947: Hennie van der Merwe, chairman, KKI board, Oudtshoorn.
18/07/1950: Magda Erlank, Me Boutique, Newcastle.
18/07/1963: Peter Colombo, formerly Hippo Bag & Screen [closed], Cape Town.
18/07/1973: Sanjay Bhagwandas, Ginger Bhagwandas Exclusive, Durban.
18/07/1974: Zunaid Gathoo, Shoe Zone, Sasolburg.
19/07/1946: Mohamed Iqbal Ahmed, A.V. Mohamed & Sons, Louis Trichardt.
19/07/1967: Fatima Do Tanque, Super Save, Aliwal North.
19/07/1968: Hussein Feyssa, Hafde Tannery, Addis Ababa, Ethiopia.
19/07/1977: Shantell Sables, Elan Polo, Cape Town.
21/07/1965: Gavin Cooke, Rebel Safetygear, Johannesburg.
22/07/1948: Roy Nell, Roy Nell Agencies, Durban.
22/07/1960: Holger Stutz, Paul Moeller & Co, Johannesburg.

In Memoriam this week

16/07/2004: Frederick (Fred) Howard (b. 16/02/1918), King Tanning Company [closed], King William’s Town.
20/07/????: Ivy Cunningham (b. 16/10/1919), In Step Shoes [closed], Pietermaritzburg.
22/07/1993: Paul Hoch, Edendale Tannery [closed], Pietermaritzburg.
22/07/1993: Chagan Ratanje, RK Footwear, Harare.
22/07/2008: Derek Brown (b. 13/01/1948), Derek Brown Agencies, Johannesburg.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

ABSA Agri Trends 06/07: Hides & skins prices

Overall, the hide market sentiment remains bearish, in line with the weak international hide market. Shipments to Italy are expected to be limited as well, weighing on the market. There are also indications of oversupply in South America which further add pressure on the market. The average hide price over the past week was R7.04/kg green. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. The average price for Dorper skins was R32.14, and for Merino skins was R86.67.

Trade Fair dates

For a list of local and international trade fairs covering footwear, leather goods, leather and PPE, visit our website: http://www.svmag.co.za/events.php

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Contact:
Mike Samuel   0824477110      031-3127065    samuel@iafrica.com
Yasin Ally    0837295136      031-3127531    yasinally786@gmail.com

In need of a boardroom?

SAFLEC, situated at 6 Stedman Mews, 128 Jan Hofmeyr Road, Westville, has a boardroom for hire.
       It seats up to 12 people around a table, and has space to add up to 15 more chairs in the room. You are welcome to view the room before hiring.
       For more information, please contact Louise on 031 266 1473 or louise@saflec.co.za.
We look forward to being of service.

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: July 23, 2018.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

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