S&V Weekly Newsletter Vol.10 No.49, December 02 2024

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What if South Africa loses AGOA? A hypothetical scenario for the footwear export industry

By Nerisha Jairaj, executive director, SA Footwear & Leather Export Council (SAFLEC)

The interconnected nature of trade, politics, and diplomacy reminds us that no industry operates in isolation. The possibility of South Africa losing its AGOA (African Growth and Opportunity Act) benefits is purely hypothetical, but exploring such scenarios helps us plan for resilience and adaptability. This article is a thought exercise to provoke discussion, not to offend or take sides, and aims to highlight potential challenges and opportunities for South Africa’s footwear industry.

The Geopolitical Context
Shifting global dynamics and South Africa’s independent stance on various geopolitical issues have occasionally placed it at odds with key trading partners. While AGOA has provided vital duty-free access to the U.S. market, the renewal of these benefits is subject to political and economic considerations that remain fluid under a changing U.S. administration.

The Hypothetical Fallout
If AGOA benefits were lost, the footwear industry would face significant challenges. Losing duty-free access would introduce tariffs, reducing the competitiveness of South African footwear in the U.S. market. This could particularly impact smaller manufacturers already grappling with financial pressures, potentially shrinking their market share.  However, brands that have established a strong brand presence as well as customer base may have less to worry about as often business relationships and brand loyalty can ease many a burden in this respect.

Opportunities Amid Challenges
While the loss of AGOA would be a setback, it is not insurmountable. The industry could pivot and explore alternative strategies to maintain and grow exports:
1. Bilateral Agreements: South Africa could negotiate a direct trade deal with the U.S., offering a more stable and long-term solution.
2. Niche Markets: Emphasizing bespoke, sustainable, or high-quality safety footwear could differentiate South African products and justify higher price points despite tariffs.
3. Diversified Markets: Expanding into Europe, Asia, and the Middle East could offset losses, leveraging South Africa’s reputation for craftsmanship and quality.
4. Intra-African Trade: The African Continental Free Trade Agreement (AfCFTA) provides opportunities to strengthen regional trade and build resilience.
5. Innovation Through Technology: Leveraging AI and advanced manufacturing techniques could enhance efficiency, reduce costs, and align with global trends.

SAFLEC’s Role in the Hypothetical Scenario
SAFLEC remains committed to supporting exporters, regardless of trade uncertainties. By offering market intelligence, for strategic realignment, training and upskilling, handholding throughout our members’ export journey, helping them facilitate participation in global exhibitions, helping to unblock barriers and advocating for exporters. By working together, South Africa’s footwear industry can weather any storm and continue to leave its mark on global markets. SAFLEC ensures members are equipped to adapt and thrive in changing environments.
     This hypothetical scenario underscores the importance of collaboration and solution-driven leadership. While challenges may arise, South Africa’s footwear industry has the resilience and creativity to navigate uncertainties and continue its growth on the global stage.

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Slow start, but pickup for summer

Matthew Hansen, Reunion Footwear
Durban, KZN, SA – Reunion Footwear had a slow start to the year, as did most local shoe manufacturers, with elections slowing the retail trade.
     However, the second half picked up nicely and in particular our Angelsoft sandal production increased to 600 pairs per day and the brand/product is growing nicely year-on-year.

In case you missed it!

The November issue of S&V Footwear & Leather Goods Magazine

CLICK HERE TO VIEW IT ONLINE

S&V Footwear & Leather Goods Magazine Vol90 No11 November 2024

IN THIS ISSUE:

03 Forecasts
- SAFLIA: Hopefully, the slide in local manufacturing will be reversed, writes executive director Jirka Vymĕtal.
- SAFLEC: The road ahead requires leadership, writes executive director Nerisha Jairaj.
- AMSA: There’s a perturbing trend in imports, writes executive director Paul Theron.
- NCRF: Making the R-CTFL Masterplan work is a very complicated stew, writes executive director Michael Lawrence.

09 School Shoes
- Grasshoppers Trooper is the first school shoe in SA to acquire BanzFeet Gold Certification.

11 Headlines with Tinashe Mandirahwe
- AI is putting an end to counterfeit sneakers.
- Can reduced VAT revitalize France’s shoe repair craft?
- How Asics expansion in non-metro India supports local growth and echoes BRICS aspirations.

17 Noticeboard
- Obituary: Shan Pillay, the quiet, ever-present photographer.
- Obituary: Mike Lambrakis, the complete shoemaker – and golfer.
- Durability: A pair of Millana court shoes, 42 years on!
- Crime: Former United Fram factory scene of multiple murders.



Advertisers in this Issue
APLF/Materials+ 2025 (10), Arena Trims (20), Berzack Brothers (02), BBF Safety Group (08, 12), Bolton Footwear/Grasshoppers (04), Freestyle Genuine Handcrafted Leather (06), FrontierCo/Busby (03), Haesloop Agencies (22), Kaliber Safety Footwear/For the Motor Industry/Safety Boots (14, 16), Kaytex Belts (26), Leather Finishing Products (24), Palm Footwear (OFC), Saddler Belts (07), SAFLEC (09), S&V Calendar (01), S&V Directory (23), Shotland Packaging (22).
 

They Said It

"Understand the money trail to understand the problems. From f.o.b. China, depending on the availability of boats, sailing takes 1 month, followed by 10 to 14 days at anchorage, and a week to clear after berthing, so suppliers wait over 90 days from when they have paid for material f.o.b. in China., and at least another 60 days before the manufacturer gets paid by the retailer. That’s not counting the time between the retailer receiving the goods and selling them. It’s not easy." - Garth Ribbink, A. Greenaways (Natal), Durban, KZN, SA.

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the industry that you'd like to share with the industry? - tony@svmag.co.za

New subscribers last week

Mark, Director, GRITTGEAR, South Africa
Marc Oliver Klein, Hide Procurement Manager Europe & Africa, LEAR Corporation, Germany

Birthdays this week

09/12/1944: John Watt, retired, Bresan Footwear, Pietermaritzburg, KZN, SA.
09/12/1949: Bob Ludlow, Albertina Bay, Durban, KZN, SA.
09/12/1950: Neil Tupper, retired, formerly Bata Shoes SA, Rockshoes, Tuppino Footwear, Game Discount World/Massmart, Durban, KZN, SA.
09/12/1957: Rory Anderson, Rory Anderson Agencies, Cape Town, W. Cape, SA.
09/12/1965: Cliff Coombe, Agent-C, Port Elizabeth, E. Cape, SA.
09/12/1979: Naseem Tadia, Less Price Fashions, Nigel, Gauteng, SA.
09/12/1977: Yusuf Salie, AM Showroom/Shoe City, Marble Hall, Mpumalanga, SA.
09/12/????: Beryl Roach, Logomotif, Cape Town, W. Cape, SA.
10/12/1954: Rolf-Dieter Fuchsmann, ?, formerly DED, Ethiopia.
10/12/1965: Benson Gor Okumu, Bata SA, Pinetown, KZN, SA.
11/12/1964: Hasina Lockhat, Famous Shoes, Durban, KZN, SA.
11/12/1965: Anwar Cassim, Catwalk Footwear Manufacturers, Durban, KZN, SA.
12/12/1937: M Kadwa, Umzinto Wholesalers, Umzinto, KZN, SA.
12/12/1949: Johan Barnard, Envirotan, Port Elizabeth, E. Cape, SA.
12/12/1956: Chandrakant Dajee, Avalon Job Buyers, Port Elizabeth, E. Cape, SA.
12/12/1970: Kobus Louw, Morgan Beef/Brits Leathers, Pretoria, Gauteng, SA.
12/12/1979: Dane Patterson, Boardriders, Durban, KZN, SA.
12/12/1980: Craig Lahee, Ritewear Footwear, Cape Town, W. Cape, SA.
13/12/1959: Kersie Govender, CK Shoes, Pietermaritzburg, KZN, SA.
13/12/1960: Ebrahim Sonpra, Sonpra’s Warehouse, Pietersburg/Polokwane, Limpopo, SA.
13/12/1969: Simo Simov, African Merino Trading, Ekandustria, Mpumalanga, SA.
14/12/1953: Rachmat Thomas, retired, formerly Chic Shoe Manufacturers [closed], Cape Town, W. Cape, SA.
14/12/1957: Paul Henshaw, Puma, Cape Town, W. Cape, SA.
14/12/1988: Lu Fraser, Claw Boot International, Johannesburg, Gauteng, SA.
15/12/1973: Charl Lucas, Springbok Skoeisel, Springbok, N. Cape, SA.
15/12/1975: Sabrina van Rooyen, Van Hobs Dry Cleaners, Pretoria, Gauteng, SA.
15/12/1983: David Fox, Good Hope Sales, Cape Town, W. Cape, SA.

In memoriam this week

13/12/2023: Allan Norman (b. 15/06/1945), Sandals Ltd. (closed), Jardine Footwear (closed), NR Footwear, all Pietermaritzburg, KZN, SA.
14/12/2016: Allan Capell, (b. 01/07/1932), Capelli [closed], Durban, KZN, SA.
14/12/2016: Raman Merchant (b. 02/06/1929), Merchant’s Outfitters, Port Elizabeth, E. Cape, SA.

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.

Directory entries updated last week

FC & T Supplies [Almenta 133 (Pty) Ltd], Boksburg, Gauteng, SA.

3. Malawian Kwacha (MWK) (buying)

Source: https://www.rbm.mw/

4. Zambian Kwacha (ZMW) (buying)

Source: https://www.boz.zm/

5. Zimbabwe Dollar (ZWL$) (average) / Zimbabwe Gold (ZiG)

Source: Source: https://www.rbz.co.zw/

Note: For previous rates, see HERE

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (28 November 2024) - The current average hide price increased by 0.02% to R2.806/kg from R2.805/kg a week ago. The current price is 0.31% higher than the average price a month ago and 14.72% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R2.75 Maximum price: R3.09. Please note: Our methodology weighs the prices we collect according to the number of hides they sell in a month. This is done to make it more representative of the prevailing market price. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Marlene Louw, senior agricultural economist, and Nkhensani Mashimbyi, agricultural economist, and Zama Sangweni, agricultural economist, Absa group.

Note: For previous prices, see HERE

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:

Shoprite Holdings, Cape Town, W. Cape, SA. Supermarket chain.
Shotland’s Packaging, Pinetown, KZN, SA. Box and carton manufacturer.

THIS WEEK LAST YEAR!

First weekend of December: Mixed results

Death Notice: Dietmar Theilig

In case you missed it! : The November 2023 issue of S&V Footwear & Leather Goods Magazine

READ IT HERE - S&V Weekly Newsletter Vol.9 No.49, December 4 2023

THIS WEEK FIVE YEARS AGO!!

Good news last week: Tracking SA's recovery in the headlines

Retail last week: Comment from 4 retailers on Saturday - location and a positive attitude help

SA trade stats, October 2019

Movement: Nadine Venter joined PQ Clothing Outlet

Bluestar Alliance acquires Hurley

READ IT HERE - S&V Weekly Newsletter Vol.5 No.49, December 9, 2019

Contact us

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

Next newsletter: Monday December 9, 2024. Ad and editorial deadline Friday 6 November.

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

Our website www.svmag.co.za