S&V Weekly Newsletter Vol.6 No.18, May 1, 2020

This Newsletter is sponsored by SAFLIA

Because of all the interest around Level 4 Lockdown regulations governing our industries, we are bringing out the Newsletter today instead of on Monday. Public holiday? What public holiday?

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

Restarting manufacturing and retail

Limited restart for footwear manufacturing and retail, no word yet on leather goods, more leeway for tanning industry

From today, the leather and footwear sectors, and their suppliers, may resume limited business, from manufacturing to retail, subject to various safety measures. Subject to clarification, it appears that ANY closed footwear qualifies. So far, no mention has been made of leather goods.
       In Government Notices No 43258, April 29 [https://www.gov.za/sites/default/files/gcis_document/202004/43258rg11098gon480.pdf], issued by the Department of Co-Operative Governance & Traditional Affairs, on page 24, Part C: Manufacturing, it states: "Manufacture of winter clothing, footwear, bedding and heaters (and all inputs required, including textiles) permitted, commencing at 25% and scaling up to 50% employment and subject to strict health protocols."
       On page 25, Part E: Wholesale and retail trade, covering stores, spaza shops, e-Commerce and informal traders, point 15, it states: "Winter clothing, footwear, bedding and heaters and the components and fabrics required to manufacture these."

The semi-processing of leather has fallen under regulations for agriculture, according to Ernest Heunis, chairman of the Skin, Hide & Leather Council (SHALC). He said the entire red meat value chain, including ostrich and crocodile, had been working with full workforces throughout, including the processing of hides and skins to wet blue, to prevent waste.
       What changes now is that automotive leather finishing tanneries, which fall under regulations governing the automotive sector, may start work with 30% of their workforces, building up to 50%.
       All other tanneries, including exotic leather tanneries, processing from wet blue to crust and finished leather, may start work with 30% of their workforces, under regulations governing 'other manufacturers'. Mossop Leather has been working throughout, with a small staff, producing leather for contract and tender footwear.

Reacting to the regulations, SAFLIA executive director Jirka Vymetal said: "We're a little disappointed in that they only gave us half of what we asked for."
       National Clothing Retail Federation executive director Michael Lawrence said: "In terms of retail, as far as footwear is concerned, we categorised any closed shoe as winter footwear, but we're waiting on clarification."
       He said the NCRF had included belts in its submission for winter clothing, but not handbags. "We thought about bags," he said, "but we thought they might be a bridge too far. The problem will be enforcement - if we were just dealing with the DTI, it would be simple, but there needs to be a list for the police to follow."

In the document Risk Adjusted Strategy Regulations 29 April 2020, issued by the Department of Cooperative Governance, on page 7, point 4 reads: "Every business premises, including, but not limited to, a supermarket, shop, grocery store, retail store, wholesale produce market or pharmacy shall a) determine their area of floor space in square metres; b) based [on that], determine the number of customers and employees that may be inside the premises at any time with adequate space available; c) take steps to ensure that persons queuing inside or outside the premises are able to maintain a distance of one and a half metres from each other; d) provide hand sanitisers for use by the public and employees at the entrance to the premises; and e) assign, in writing, a employee...who must ensure the compliance with the measures provided for in paragraphs a) and d), and that all directions in respect of hygienic conditions and limitation of exposure to persons with Covid-19 are adhered to."

Dr. Jay Irkhede on behalf of the dtic thanked all sector associations, export councils, cluster, individual manufacturers, organized labour and sector media "S&V" for patience, resilience, very active communication and feed back to the dtic. He said that after the recent publication and dissemination of the Risk Adjusted Strategy Regulation 29th April 2020 (Govt. Notice from COGTA on Alert Level 4) we have received various question for clarity and the following is our responsible response to the inquiries:
1. We may insist that as a "Good Practice" the manufacturers may have internal "COVID-19 company representative" delegated with "development of strict health protocol" and "to monitor and mitigate the risk of virus spread". However, this is not a mandatory requirement.
2. We insist that we adhere to "General Measures to Contain COVID-19" as stipulated on page 9 of the regulation.
3. All manufacturers are required to develop a "Work Place Plan" as per ANNEXUR E on page 38 of the regulation (Item 1, 2, 3, 4, 5a to 5h & 6).
However, we confirm that the Work Place Plan developed does not need any Govt. approval.
4. Table 1 on Alert Level 4 on page no 24:
a. Please demonstrate that all persons who can work from home are doing so.
This will also improve your "on site employment complement" within the scope of Level 4 restriction.
b. Part C: Manufacturing; Item 5: Manufacturing of winter footwear permitted commencing from 25% and scaling up to 50% employment subject to strict health protocol.
You may develop a stricter health protocol while phasing employment up to 50%.
Use "Full Scale Prevention Strategy recommended guidelines for footwear industry developed by Footwear Leather Industry National Cluster (FLIC)".
While manufacturing of "winter footwear" under this provision the manufacturers should demonstrate the manufacturing of appropriate winter articles and that production was strictly meant for "the current winter season" and support such activity traced back to "winter order books".
c. Part C: Manufacturing: Item 9: All other manufacturing, scaling up to 30% employment subject to strict health protocol.
All of the six sub-sectors in Leather, Leather Goods and Footwear manufacturing value chain producing fashion/non-fashion goods will fall under this provision.
d. The manufacturing of essential goods will be allowed phasing in up to 100% employment.
Against confirmed commitments/tenders the manufacturing of products such as face masks, gloves and service footwear by our sectors will require CIPC permit to operate within Level 4 alert.
e. For hides and skins, ostrich, crocodile and taxidermy industry, the regulation Part C: Manufacturing: Item 9: All other manufacturing, scaling up to 30% employment subject to strict health protocol, will normally apply.
However, as part of upstream Agriculture Value chain the provisions of 100% employment under Part A (1) Agriculture, Hunting, Forestry and Fishing should be reviewed.
However, the dtic, is not in a position to officially interpreter these provisions and we recommend that the SHALC, SAOBC, SACIA, SATTA & ELSA to verify such provision on processing of agriculture waste & bi-products during Alert Level 4 through the DEA and DAFF.
During the Alert Level 5, in case of SAPS enforcement on CPC/AHT, we through the dtic Chief Director: Agro Processing had supported the position that "The hides are an end product of animal production more important a bi-product of animal production hence in terms of regulation falls within food industry mainly part of meat value chain".
We acknowledge mails received from these sub-sectors and recommend the following:
(i) Keep a scale of employment phased in to maximum of 30% on the processes further to preservation and storage such as tanning, crusting and finishing, till provisions to operate with 100% employment are reviewed from the DEA and DAFF.
(ii) Obtain a new permit from CIPC to operate to at 100% employment with shift work to process Agriculture waste / bi-product to avoid decay during Alert Level 4.
5. Currently for the sub-sectors without existing shift work system we recommend not to perform manufacturing in shifts since you will be seen as constructing an arrangement to exploit Alert Level 4 regulations.
6. There is absence of clarity on overtime work during Alert Level 4 and the dtic's view is that overtime defeats the purpose of relaxation provided during Alert Level 4.
7. Yesterday during the evening telecast Hon. Minister Patel indicated "rotation".
We would expect that during Alert Level 4 the manufactures rotate employee in phases with an objective to achieve "close to equal distribution of remuneration".
8. For the movement of shift employee particularly for operations with contentious processes the tanneries and taxidermists may seek assistance from Provincial Authorities.
We could not comprehend which agency will offer such permissions to avoid violation of the curfew conditions during Alert Level 4.

They Said It

"I loved the mask video from Palm Footwear in your latest edition; the ingenuity and resilience of CFTA manufacturers/'survivors' is uplifting.  Good luck to them!  And to the industry which, I hope, will stride forward post-lockdown with fewer imports coming through." - Lesley Williams, formerly with Edgars Zimbabwe, now an Agent/Consultant, Bulawayo, Zimbabwe.

"In jail. Cannot respond. Kind regards." - Arveen Boodhoo, MD, Dick Whittington Shoes, Pietermaritzburg, KZN, SA. He was responding (tongue-in-cheek) to our query about a police raid on the factory for alleged lockdown contraventions. For the story, see S&V Footwear & Leather Goods, coming out on Wednesday.

And now for the good news (there's always some, and this really is)

Harvest outlook impressive and raises hope for agriculture sector rebound

Comment by Paul Makube, Senior Agricultural economist at FNB Agri-Business
30 April 2020 – Agriculture received some positive news this week. Firstly, it was the further upward revision to the country’s crops estimates with the South Africa’s Crop Estimates Committee (CEC) pegging the 2019/20 crop 17.52 million tons of grain and oilseed crops which is up 2.6% from March and 31.3% higher year-on-year (y/y). At 15.22 million tons, the maize harvest will be the third largest on record having been raised by 2.8% from the previous month and 35% y/y. Encouragingly, soybean output jumped 1.7% from March despite earlier yield concerns to 1.29 million tons which is up 10% y/y. While the sunflower harvest estimate came in unchanged month-on-month (m/m), it is still 10% up on last year. This is good news for consumers as food inflation is expected to remain contained in particularly the bread and cereals which decelerated by 3.8% y/y during March 2020.
       Secondly, it is inevitable that fuel prices are going to fall in May and all indications are that it will be by a big margin. This comes at the time when harvesting gets in to full swing for the summer crop areas while the winter crop planting season begins. The implications are reduced costs for farmers from planting, harvesting, and distribution bearing in mind that the distribution of agricultural produce is dominated by road transport with over 80% of grain is transported by road.
       Thirdly, the lockdown regulations have been eased and wine can now be transported for the critical export market to ensure that we retain our markets and improve cash flows for producers. After earlier confusion with some of the provinces, the issue of livestock has been clarified and sales can continue unhindered.

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/

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (April 28, 2020) - Beef: Local beef prices have been under pressure due to current lockdown restrictions. These are times of uncertainty and many feedlots are not buying the volumes of weaner calves they usually do due to the uncertainty about the overall direction of prices in the coming months. Farmer’s not being able to sell their livestock creates not only a cash flow problem , but also creates a logistical backup as they may not have physical space for new feeder cattle/ weaner calves that were intended to replace the animals that were not sold.
Mutton: This week, lamb and mutton prices traded lower when compared to the previous week. The national average Class A carcass lamb price decreased by 2.4% to R72.45/kg and the average Class C carcass price decreased by 2.5% to R51.82/kg. The price of merino skins decreased from R42.22/skin to R41.25/skin this week and the Dorper skin price increased from R35.63/skin to R39.38/skin week on week. Compared to a year ago the price of dorper skins is 21.17% higher and the price of merino skins is 3.19% lower. Locally, lamb and mutton prices remain subdued due to the availability of cheaper protein alternatives. Prices are expected to trade sideways to lower according to seasonality.
Please note: We will not be sending out any hide reports over the lockdown period. The hide markets will be closed. - Conce Moraba, agricultural economist, Absa group.

04/05/1940: Isaac James, retired, formerly Step High Shoe Boutique, Cape Town.
04/05/1948: Martin Nefdt, agent, Port Elizabeth. E Cape, SA.
05/05/1967: Vernon Lotter, Comfy Feet Shoes, Jeffery’s Bay.
06/05/1932: Yusuf Sayanvala, Westgate Wholesalers, Brits.
06/05/1979: Stelio Krystallidis, K-West/Fashion Trims, Johannesburg.
07/05/1947: Mike Rolfe, retired, formerly Barker Footwear, Cape Town.
07/05/19??: Gerard Aarnikhof, formerly Angels Shoes, Cape Town.
08/05/1950: David Boast, retired, formerly African Hide Trading, Port Elizabeth.
08/05/1956: Jeff Human, John Whittle Components, Cape Town.
09/05/1949: Mike Millar, retired, formerly MRM Agencies, Johannesburg.
09/05/1955: Jill Fraser, Claw Boot International, Johannesburg.
09/05/1960: Rodney Reynders, left the industry, Durban.
09/05/1963: Don Tully, Groundcover Leather Company, Curry’s Post.
09/05/19??: Sarie de Wet, KKI Leather Marketing, Oudtshoorn.
10/05/1950: Brian da Costa, agent, Port Elizabeth.
10/05/1971: Ashraf Kathrada, Catz, Cape Town.

In Memoriam this week

05/05/2001: Raj Kallichurum (b. 23/02/1954), Shoe Component Supplies, KwaDukuza.
06/05/2016: Herbert Lohmeier (b. 25/11/1954), H. Lohmeier Men’s Outfitters, Swakopmund.
06/05/2018: Tony Bradshaw (b. 22/06/1952), left the industry, formerly Jack & Jill [closed], Port Elizabeth.
08/05/2010: Bob Hunter (b. 18/11/1938), footwear agent, Johannesburg.
08/05/2018: Peter Jönsson (b. 01/04/1967), formerly TFL SA and others, Johannesburg.
10/05/2011: Albino Rodrigues De Oliveira (b. 09/01/1944), Andreoli Shoes/Giorgio Marelli/Sabrina Shoes [all closed], Durban.

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.

Making use of the lockdown: Have a look at this link

The International School of Tanning Technology, Grahamstown, E Cape, SA, has used the lockdown in part to redo its website. To see the results, go to: https://sites.google.com/site/isttschool/

Contact us

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

Next newsletter: May 4, 2020.

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

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