29 August 2017 Press release by the CTFL Stakeholder Initiative*

CLOTHING, TEXTILE, FOOTWEAR AND LEATHER SECTORS TO CONVENE CONFERENCE TO FIND RESPONSES TO SA’S DOWNGRADE TO JUNK STATUS Labour and business in the clothing, textile, footwear and leather (CTFL) sectors are deeply concerned about the impact of the downgrades of South Africa’s debt on our industry and the broader economy. The downgrades by various rating agencies during 2017 (and possible future downgrades) will raise the cost of borrowing for the workers, businesses, government and consumers. This will have a negative impact on government spending on CTFL support measures and incentives, on investments by businesses and on spending by consumers on the products made in CTFL factories. We are concerned that it could lead to increased factory closures and retrenchments in the CTFL sectors, placing an even greater strain on South Africa and its poor. This is not good news, given our already high levels of unemployment. These factory closures and retrenchments will take place, if a proper and credible turnaround plan is not formulated immediately, and implemented expeditiously. The stagnant economy has already caused our sectors to lose more jobs than in recent years, mainly as a result of fewer orders from retailers and less procurement from government and corporates. To understand the impact of the downgrades (including of possible future downgrades, especially of our local currency debt) and to develop measures to mitigate its impact, CTFL trade unions (SACTWU and NULAW) and employer associations have convened a conference under the theme ‘Surviving junk: finding responses for the CTFL sectors’. The conference will take place on 6 and 7 September at the Coastlands Conference Centre in Durban and will be attended by 500 delegates, including CTFL factory workers, union officials, factory directors and managers, service providers, government officials, the retail sector, as well as delegates from associated sectors like cotton farming. The whole value chain will be represented, as we require a united response. The conference is being supported by the value chain’s training authorities, the Fibre Processing & Manufacturing (FP&M) SETA and the Wholesale & Retail (W&R) SETA. Several senior government leaders have been invited to address the Conference. We have commissioned discussion papers from senior researchers from Wits University’s Corporate Strategic Industrial

Development (CSID) research programme and the Industrial Development Corporation (IDC). The CSID programme has done an international comparative study of countries that have undergone debt downgrades and, from these examples, drawn lessons for South Africa, while the IDC will present its views of the possible impact of the downgrades on the South African economy and the CTFL sectors in particular. The outcomes of the conference will be used to construct a plan to mitigate the impact of the downgrades on the CTFL sectors.

NOTE TO EDITORS: * The CTFL Stakeholder Initiative is an interim forum bringing together key decision makers from these sectors and its associated institutions, to periodically deliberate on strategic challenges facing the value chain. Members of the Initiative at this stage include the employee and employer parties from the National Bargaining Council for the Clothing Manufacturing Industry (NBCCMI), National Textile Bargaining Council (NTBC) and the National Bargaining Council of the Leather Industry of South Africa (NBCLI). Fashion retailers and the farming community in our value chain have been invited to join this initiative. Issued by – Sicelo Nduna, General Secretary, NBCCMI, Alvan Pillay, General Secretary, NTBC and Gerald Naidoo, General Secretary, NBCLISA, on behalf of the CTFL Stakeholder Initiative. If further comment or information is required, kindly contact • • • • • • •

Andre Kriel, General Secretary, SA Clothing and Textile Workers’ Union (SACTWU): 021 4474570 Ashley Benjamin, General Secretary, National Union of Leather and Allied Workers (NULAW): 083 2584433 Johann Baard, Executive Director, SA Apparel Association: 083 4444069 Hans Brouwer, Chairperson, SA Cotton Textile Processing Employers' Association: 071 5687345 Theo Heffer, Secretary, Association of SA Manufacturers of Luggage, Handbags & General Goods: 082 6521090 Noel Whitehead, Chairperson, Southern African Footwear and Leather Industries Association: 082 7737211 Mark Oosthuizen, Secretary, SA Tanning Employers Organisation: 082 8811158