Publisher of leading trade magazines for the Footwear, Leather-goods, Leather & PPE industries

S&V Weekly Newsletter Vol.6 No.13, March 30, 2020

This Newsletter is sponsored by SAFLIA

Please note: Click on any ad to go to the advertiser’s website

 

Covid-19: DTIC notifications to manufacturers

Pretoria, Gauteng, SA (March 27, 2020) – Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), on Thursday and Friday forwarded a string of announcements to industry associations, export councils, the national and sub-national clusters, unions and the National Bargaining Council, requesting further dissemination to their members in the leather, leather goods and footwear value chains.        The announcements covered the government's reaction to the pandemic, various gazettes related to shutdown regulations, supporting guidelines and their relevance to our industries. His contact details are 0663012044, jirkhede@thedti.gov.za.

They are summarised below:

I. On behalf of the DTIC we will continue our support to the industry throughout the lockdown such as:
1. In consultation with industry we have compiled and submitted of list of safety / service footwear and leather goods manufacturers who would like exemption to partially operate or be on standby during lockdown in support of the SANDF, Hospitals, Health, Police, Food Processing and other essential services. The list is compiled and submitted to the division.
2. We will continue working on CTCP incentive approvals during the lockdown. We have CTCP Project Approval Panel (PAP) meeting scheduled on 30th March 2020.
3. Revision of CTCP to a new framework to address growth and employment.
4. Combating illegal imports through SARS legal counsel with DTIC as a second legal respondent. The integrated work involves high level of confidentiality and we cannot divulge the details on our active participation.
  5. Continuous engagement with retailers within the R-CTFL Masterplan PMO forum and task teams. We will raise the issue of retailers’ order cancellation due to lockdown through this forum.
 
II. Shortly we will know the administration by IDC of the announcement made by Hon. President "The Industrial Development Corporation has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms and to fast-track financing for companies critical to our efforts to fight the virus and its economic impact". The industry may contact IDC - covid@idc.co.za or 0860 693 888 or www.idc.co.za for details.

III. The general fashion footwear and leather goods industry is not declared as essential and will not seek permission to operate/trade through the Companies & Intellectual Property Commission (CIPC) during lockdown. The following companies, making safety and government tender footwear and leather work gloves, are allowed to seek permission to continue manufacturing:
- BBF Safety Group
- Dick Whittington Shoes
- Shezi Industrial Holdings t/a Neptun Boot
- Africa Soul Footwear Manufacturers
- Palm Footwear
- Bata SA
- Tarzan Shoe Factory
- Phoenix Industrial
- Pluribix t/a ProGlove
- Mpho Shoe & Leather Clinic
The Minister of Trade and Industry, Ebrahim Patel, has announced that all businesses that will be allowed to provide essential services are required to seek approval from the Department of Trade, Industry and Competition in order for them to trade during the period of the lockdown in terms of the regulations published. Such businesses are required to apply to the Companies and Intellectual Property Commission (CIPC) Bizportal website at www.bizportal.gov.za and obtain a certificate from the Commission that allows them to continue trading. The Bizportal website will contain a menu icon listed as “Essential Service Businesses” through which an application can be made to the CIPC. It is reported that by 27th March 2020 about 15000 companies received permits to operate which included a few manufacturers from footwear industry.
On 27th March 2020 the stakeholders were further informed that many companies may have trouble being classified as an essential goods OR service and may not receive the CIPC permit to operate. Today morning I have mailed the attached DTIC guideline CIRCUALR. As per the circular the companies failing to receive permit must call the following at DTIC to clarify their status as an essential goods or service.

CONTACT DETAILS IN THE EVENT OF ENTERPRISES WISHING TO CLARIFY THEIR STATUS AS AN ESSENTIAL GOOD OR SERVICE

Enterprises may contact the Department of Trade, Industry and Competition (DTIC) on lockdownexemptions@thedtic.gov.za
Enterprises may call the Department of Trade, Industry and Competition (DTIC) on 0861 843 348 or +27 12 394 9500.

IV. Please share DTIC/NEF COVID FUND BROUCHERS with your members and non-members. The fund includes COVID 19 Emergency Interventions for SME’s manufacturing Identified Priority Products.
NEF - Email - covidfund@nefcorp.co.za Tel - 011 305-8888

V. Please urgently share with your members & non-members that the application for support through Dept. of Small Business Development (DSBD) only for listed essential sub-sectors and food produces is available through https://smmesa.gov.za/
SEFA - 0860 663 7867 and www.smmesa.org.za, applicants can register and apply for funding.

VI. The Department of Labour has published new regulations which outline South Africa’s new Covid 19 Temporary Employee/Employer Relief Scheme (TERS). The regulations note that during the country’s 21-day lockdown, companies will have to lockdown and employees laid off temporarily. This means that employees are compelled to take leave, which is not out of choice, and employees are likely to lose income. While employers are encouraged to continue to pay employees, where this is not economically possible, the Department of Labour says it has created a special benefit under the Unemployment Insurance Fund (UIF) as per the TERS.

How the scheme works
 

  • Should an employer as a direct result of Covid-19 pandemic close its operations for three months or lesser period and suffer financial distress, the company shall qualify for a Covid-19 Temporary Relief Benefit;
  • The benefit shall be delinked from the UIF’s normal benefits and therefore the normal rule that for every four days worked, the employee accumulates a one-day credit and the maximum credit days payable is 365 for every four years will not apply;
  • The benefits will only pay for the cost of salary for the employees during the temporary closure of the business operations;
  • The salary benefits will be capped to a maximum amount of R17,712 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38%-60%) as provided in the Unemployment Insurance Act;
  • Should an employee’s income determined in terms of the income replacement sliding scale fall below the minimum wage of the sector concerned, the employee will be paid a replacement income equal to the minimum wage of the sector concerned;
  • For the company to qualify for the temporary financial relief scheme, it must be registered with the UIF, must comply with the application procedure for the financial relief scheme, and the company’s closure must be directly linked to the Covid-19 pandemic.


Illness benefit
  Where an employee is in quarantine for 14 days due to Covid-19 pandemic, the employee shall qualify for illness benefit.

In terms of the regulations:

  • Confirmation from both the employer and the employee must be submitted together with the application as proof that the employee was in an agreed precautionary self -quarantine for 14 days;
  • In this instance, the confirmation letters from the employer and employee shall suffice;
  • Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with continuation form for payment


How to apply

  • Employers can apply by reporting their closure by emailing covid19ters@labour.gov.za and there shall be an automatic response outlining the application process.
  • Employers will be required to furnish the Unemployment Insurance Fund with the following completed documents:
  • Letter of authority from the company;
  • Signed Memorandum of Agreement (MOA) from the employer or Bargaining Council with the UIF.


It should be noted that an employee who is being paid by the employer during this period is not entitled to this benefit.

VII. Rebate item 412.11 makes provision for the duty free importation of critical supplies during the National State of disaster.
Kindly note that the process for obtaining a certificate under rebate item 412.11 is set forth in a document entitled “Standard Operating Procedure (SOP)” under Rebate Item 412.11 for Business importing Critical Supplies during the National State of Disaster, which is obtainable from ITAC’s website: www.itac.org.za.
The relevant Guidelines, rules and conditions as well as the Application form concerned is also available on the website.

VIII. SARS will continue to administer cross-border movement of goods at all land, sea, airports, and permissible travel in line with applicable restrictions. The processing of declarations will proceed as normal. Physical inspections of goods will continue as normal and priority will be given to essential goods. Other inspections will continue on an appointment basis.

VIII. The borders with all neighbouring countries, with the exception of Lesotho, are open, but with restrictions, which basically amount to returning citizens only, with foreigners facing quarantine. Customs was awaiting an announcement from Lesotho.

IX. I have interacted with Head of Customs at SARS requesting that some manufacturers have demanded their material imports arriving in ports during lockdown be released by Customs since some imports involve inputs in the manufacturing of emergency service/safety goods by manufacturers permitted to operate during lockdown through CIPC permits. SARS / CUSTOMS have requested us to share a list of manufacturers including their CICP permit to operate during lockdown. I have requested industry in safety & service footwear to submit the details of their essential imports for emergency production. I have received the details from a few manufacturers and will submit to SARS requesting priority clearance.

X. Through DTIC IDD: Technical Infrastructure unit we have requested NRCS CEO relaxation on documentary process in favour of local emergency manufacturing so that the companies can proceed with emergency local production essential goods during lockdown as and when required by the State. However, the NRCS response is awaited.

XI. We have Minister’s media briefing and we urgently need feedback from companies in essential manufacturing:
1. Experience of the day 1 of lockdown
2. Any issues with police or military
3. Any issues with worker’s transport
4. Any supply chain hold up’s
5. Any negative factor that may affect essential operations
We appreciate prompt feedback from industry.
The lockdown announcements in South Africa and many other economies are unprecedented and we are prepared to collaborate on speedy support to the industry as announced.
Also, we will highly appreciate and welcome your further inputs on "post lockdown recovery plans" in favour of manufacturing business and employment retention.
In the interim we request industry members to observe resilience, patience and integrity to defend the pandemic as a highest national priority.

 

Stock Exchange News Service (SENS)

Mr Price - Covid-19 update

Durban, KZN, SA (March 26, 2020) – As a company with wide-reaching influence in South Africa, we are committed to uniting with all citizens to protect the well-being of the nation. We feel the responsibility to respond to the COVID-19 outbreak in a manner that meets the level of urgency that the Government has requested.
       Our peoples’ safety is our number one priority. The management team is doing everything possible to mitigate risk and ensure we minimise the impact of the virus. We also acknowledge our duty to consider all our other stakeholders – including communities, customers, suppliers and investors.
       When the outbreak first hit South Africa, we implemented extensive precautionary measures to ensure that our workplaces and stores were safe for our associates and customers. These measures were in accordance with the guidelines provided by the World Health Organisation (WHO) and the National Institute for Communicable Disease (NICD). We continue to monitor the information provided by the Department of Health and will adhere to their recommendations.
       Initial concerns were about supply as factories in China closed due to the outbreak and spread of COVID-19. China represents approximately 47% of our order book, which positions us at the mid-point of other South African retailers, in terms of imported merchandise as a percentage of sales. In the early weeks of the outbreak we acted swiftly to ensure our supply chain was able to adjust to replace the most at-risk merchandise.
       In recent weeks supply concerns have shifted to demand. In the first two weeks of March prior to President Ramaphosa’s first announcement on 15 March, sales grew 8.6%. For the period between 16 March 2020 and 24 March 2020, sales progressively deteriorated and fell 22.1%. Demand for apparel and homeware merchandise has been significantly impacted as consumers prioritise hygiene and food related goods. This trend has been seen around the world as social distancing initiatives have negatively impacted discretionary spending.
       On 23 March 2020, President Ramaphosa announced a lockdown that requires South Africans to stay at home except for essential purposes. Our stores, e-commerce, head office, distribution centre and call centres will all be closed between 27 March 2020 and 16 April 2020. As a result, we anticipate making no sales in South Africa (c.92% of Group sales) over the lockdown period. To quantify the potential impact, in the first three weeks of FY2020, R1.2bn in sales were achieved.
       Energy is now focused on managing the order book as effectively as possible to overcome impending stock build-up. Due to the lockdown, it will be impossible or impracticable for orders already placed for delivery between 27 March 2020 and 16 April 2020 to be manufactured and/or delivered and received per the terms of the original orders. Based on our partnership approach with suppliers, where possible, our aim is to in good faith renegotiate new delivery dates when the lockdown period has ceased, and our respective business operations resume. We are currently engaging with our suppliers to achieve an acceptable outcome. We are in support of the lockdown as the most effective measure to try and control the impact of the virus. We do however anticipate further uncertainty, which could significantly decrease demand in the weeks and months ahead. This makes it very challenging to accurately quantify the total impact of COVID-19, but there is no doubt that it will materially affect performance in FY2021.
       In these extremely challenging times, we take comfort in our strong cash position. As a value retailer with a strong balance sheet we will be better positioned than most. All divisions are working hard at managing their cash flow through a variety of initiatives. Value thinking and a sharp focus on cost management are always central to every decision we take. An even stronger emphasis has been placed on this and several opportunities for cost management exist. Reducing capital expenditure, slowing down new space growth and seeking rent relief are a few of these.
       Annual salary increases for head office associates have been delayed until further notice. In addition, our executive management and board of directors have committed to a cut in salaries and fees. In the spirit of partnership, we have committed to pay all our associates their full salary and benefits in March and April, despite the lockdown. We have always said that people are our most valuable asset and now is the time to show it.
       The debtors’ book, previously reported at R2.1 billion, is expected to come under pressure. Generally, collections have met expectations, but the plight of consumers will impact their ability to manage repayment. As a result, we anticipate collections to deteriorate.
       We are conscious that the lockdown period extends over our FY2020 financial year end. We will need to assess the impact of COVID-19 on the current financial year, as well as consider the timing of the lockdown impact on our reporting period deadlines. We will continue to monitor the situation and consult with our sponsor and the JSE if necessary. The impact of COVID-19 may also affect the declaration of the FY2020 final dividend. This will be considered during the FY2020 year-end process.
       The virus has only been in South Africa for a short period of time. Despite this, there have already been multiple changes to the situation to which we have had to adapt. We remain devoted to ensuring that we exercise the resilience measures at our disposal over this challenging time. We are currently in a prohibited trading period and move into a closed period on 28 March 2020. We remain committed to our stakeholders and will communicate as frequently as is warranted by upcoming events.

 

Trade Fair updates

Announcement by APLF
Hong Kong – Since APLF made the last announcement on postponing our fairs in early February, COVID-19 has spread globally and has now become a pandemic. It has now become necessary to make further changes to the fair dates and we will be further postponing the fair.
       Governments around the world have started to introduce rigorous measures, which include closure of borders, a 14-day quarantine order for arrivals from abroad and so on, in order to control the spread of COVID 19 in the community. In the US and some European countries, citizens have also been advised to limit their travel outside of their countries.
       On 18th March 2020, the Hong Kong government has enforced 14-day compulsory quarantine orders on all people arriving from all places outside China, starting from midnight on 19th March for three months until mid-June.
       These new orders mean it is almost impossible for both exhibitors and buyers to participate in APLF fairs which had previously been postponed to 1st - 3rd June.
       We are working diligently with Hong Kong venues and stake holders to consider what available options will benefit all concerned and will advise you as soon as possible.
       The entire APLF team joins you in this extraordinary situation we are experiencing together, and our thoughts are with all of you affected by this pandemic. We wish to thank each and every exhibitor and buyer who has supported us and our fairs. We greatly appreciate your patience and understanding in these coming months. Together, we will surely make our way through these challenging times for our industry.
       We will make another announcement very soon regarding APLF 2020.

 

Closing

Ermelo, Mpumalanga, SA – Men's outfitter Academy Outfitters will be closing in a few months, proprietor Hurshvaden Vallabh said last week. He will be retiring.

 

And now the good news...(there's always some)

Various reports say Eskom isn't expecting load shedding during the lockdown. April and May are critical pre-winter maintenance months for Eskom, so let's hope it puts a proposal to government to allow it to redouble its maintenance programme during this unexpected low demand period.

 

They Said It

"I’m still working from home and are now more busy than ever." - Leather technician Manie Strydom, Buckman, on the lockdown.

"Right now there are other issues to worry about. Like the beer virus." - Leather agent and Mexican beer lover Hugo Zuanni, Leather Link, Cape Town, W Cape, SA, on taking on a new project.

 

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the lockdown that you'd like to share with the industry? We will publish the throughout the lockdown, so please let us know. - tony@svmag.co.za

 

Updating the 2020 S&V Directory

I am using the lockdown to complete the 2020 edition of the S&V Directory. Something productive you could do with your lockdown time is to let me know if you have moved, had any other address or staff changes in the last 12 months. Please mail to tony@svmag.co.za.

 

2020 Trade Fairs Another essential service from S&V

Please note that we have updated most 2020 trade fairs and conferences on our website, linked to their websites: http://www.svmag.co.za/events

 

Exchange rates

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

 
  Euro € GBP £ US $ Yuan Renminbi ¥
2020/01/04 R15.97 R18.71 R14.31 R2.05
2020/01/11 R15.97 R18.76 R14.36 R2.07
2020/01/18 R16.04 R14.47 R14.47 R2.10
2020/01/25 R15.87 R18.82 R14.39 R2.07
2020/02/01 R16.54 R19.81 R15.00 R2.16
2020/02/08 R16.48 R19.41 R15.06 R2.15
2020/02/17 R16.16 R19.44 R14.90 R2.13
2020/02/22 R16.27 R19.43 R15.00 R2.13
2020/02/29 R17.27 R20.08 R15.66 R2.24
2020/03/07 R17.69 R20.44 R15.67 R2.26
2020/03/14 R18.04 R19.94 R16.25 R2.32
2020/03/21 R18.92 R20.50 R17.60 R2.48
2020/03/28 R19.63 R21.93 R17.61 R2.48
Note: For previous rates, see HERE

 

 

 

ABSA Agri Trends: Hides & skins prices

Hide prices (March 25, 2020) - Please note: We will not be sending out any hide reports for the next 3 weeks due to the lockdown period. The hide markets will be closed.
The current average hide price decreased by 28.6% to R0.94/kg from R1.31 a week ago. The current price, however, is 29.4% lower than the average price a month ago and is 43.9% lower than the average price a year ago. According to industry players hide pricing is almost no longer relevant, due to the cost to transport and processing far outweighing the raw material costs. The local hide market is largely driven by the automotive industry, and with the lockdown and current manufacturing disruptions in those industries, the local hide price has been under pressure. The South African hide industry is reliant on exports to Italy and China ,the two largest countries affected by Covid-19. Currently there is no market for the hides locally and globally. The local hide supply  to the  plants is limited to what can be sold; which is dropping daily. For the coming weeks, a very significant % of the local hides won’t be taken up by the leather industry. - Conce Moraba, agricultural economist, Absa group.

Hide & skin price progression
Date Hides/Kg Dorper/Skin Merino Skin
2020/01/03 1.38 35.00 46.67
2020/01/10 1.42 28.69 45.71
2020/01/17 1.35 30.74 45.71
2020/01/24 1.39 33.75 48.14
2020/02/07 1.36 33.47 47.50
2020/02/14 1.36 33.75 47.50
2020/02/21 1.32 33.75 47.50
2020/02/28 1.29 37.22 43.89
2020/03/06 1.29 36.50 43.50
2020/03/13 1.31 36.00 43.50
Note: For previous prices, see HERE
 

  

30/03/1946: Sarel Broodryk, retired, formerly Exotan, Port Elizabeth.
31/03/1966: Lars Torpus, ?, formerly Nakara, Windhoek.
31/03/1975: Imraam Essop, Baby Luv, Springs.
31/03/1986: Nazir Mahomed, Power Save Cash & Carry, Mpumalanga.
01/04/1960: Steve Hildebrand, agent, Pinetown.
01/04/1969: Jenny Hopkins, agent, Port Elizabeth.
01/04/1973: Rennie Thambiran, Borage Trading, Pinetown.
02/04/1969: Chris Govender, Evané, Pietermaritzburg.
02/04/1970: Gerhard Rossouw, CG Distributors, Paarl.
02/04/1974: Shaheen Hoosen, Kana’s Wholesalers, Pretoria.
03/04/1959: Grant Harris, emigrated, formerly Shoe Strip Services [closed], Pinetown.
03/04/1963: Bruce Wilson, Hotter SA, Cape Town.
03/04/1973: Brent Maron, Bolton Footwear, Cape Town.
03/04/1974: Kate Horne, Little Slipper Co., Port Elizabeth.
03/04/1973: Mahomed A Osman, Foam & Upholstery Centre, Pretoria.
04/04/1938: Colin Kemp, Chamberlain Phipps, Pinetown.
04/04/1962: Tammy Pillay, Edcon, Durban.
05/04/1964: Alastair Dean, emigrated, formerly Amber Footwear [closed], Pietermaritzburg.
05/04/1963: Lourenco Mendes, Shuler Enterprises, Harare.

 

In Memoriam this week

31/03/2016: Peter Edmeades (b. 19/07/1950), Rebel Safety Gear, Germiston.
01/04/2001: John Rider, Colin D Bailey/BU Shoe Machinery, Pinetown.
01/04/2002: Paul Moeller (b. 20/07/1931), PMC Group, Cape Town.
04/04/2005: Graham Michel (b. 09/02/1958), agent, Cape Town.

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.

 

Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:
Cape Produce Company, Port Elizabeth, E Cape, SA. Hide and skin trader, wet blue tannery, pickling plant:
Cape Sports Centre, Langebaan, W Cape, SA. Water sports:

 

Contact us

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

Next newsletter: April 6, 2020.

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

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