ugu district clothing and design industry strategy june 2014
TRANSCRIPT
Ugu District Clothing and Design
Industry Strategy
JUNE 2014
Designers
(Proposed KZN FC)
Retailers
CMT’sFormal Textile and Clothing Firms
(KZN CTC)
Clothing Co-ops
1) Formal firms2) Designers3) CMT’s4) Clothing and related co-operatives5) Retailers
Figure 4.2 - stakeholders in the KZN value chain elements:-
DesignDesign
Design +
Small Retail
Design +
Small Retail
Design +
Small Mfg
Design +
Small Mfg
Design +
Small Mfg +
Small Retail
Design +
Small Mfg +
Small Retail
Figure 4.3: Nature of Design Houses
Different ways in which designer firms can exist :-1) Design house2) Design house which handles small retail3) Design house which handles small manufacturing4) Design house which handles both small retail and small manufacturing
CMT
Big
CMT
Big
CMT
Medium
CMT
Medium
CMT
Micro
CMT
Micro
CMT +
Design
CMT +
Design
CMT +
Small Retail
CMT +
Small Retail
CMT +
Design +
Small Retail
CMT +
Design +
Small Retail
Different ways in which CMT (manufacturing firms) can exist are:-1) Big CMT’s2) Micro CMT’s3) Medium CMT’s – can include design and retail activities
Figure 4.4: Nature of Manufacturing Houses
MethodologyQuestionnaires
Completed
Number
CMT’s 25
Designers 25
Date Attendance Group
14th March 2013 10 CMT’s
18th March 2013 16 Designers
20th March 2013 11 [5 cmts + 6 designers Combined
25th March 2014 17 Co-operative members from 4 co-ops
31st July 2013 16 Engagement with Stakeholders
15th November 2013 4 Engagement with LED Technical team
Focus Groups and Engagement:
Quantitative Analysis
Quantitate Data Presentation1) Service provided by respondent2) Number of employees3) Gender Break-up of employees4) Race Break-up of employees5) Nature of employment6) Monthly Pay7) Hours worked per week8) Benefits of employees9) Skills Proficiency10) Current number of employees in each category11) Skills required12) Machine Handling13) Number of staff hired and separated14) Qualification of employer
14) Qualification of employer
15) Employer’s years in Business
16) Employer’s years in previous service
17) Employers Business qualification
18) Business acumen rating
19) Model of Machinery
20) Number of Machinery
21) Required number of Machinery
22) Repair bills of Machinery
23) Downtime of Machinery
24) Volume of production
25 ) CMT Rate earned
26 )Percentage of rejects
26) Clients
27) Clients Location
28) Value of Business
29) Items of production
30) Timeframe of production
31) CMT Unit price
32) Percentage of waste
33) Details of finance
34) Costs
35) Costs/ Profit and Turnover
36) Turnover and Profit Trend 2012
37) Compliance
CMT's on database 34
CCMA member CMT's 20
Surveyed CMT's 25
Focus group CMTs 10
Designers on database 84
Port Shepstone designers 41
Margate designers 17
All other locations 26
Surveyed designers 25
Focus group designers 16
Estimated Universe of designers 300
Co-ops on Database 23
Hibiscus Local Municipality 9
Umdoni Local Municipality 7
Umzumbe Local Municipality 4
Ezinqoleni Local Municpality 1
Umzwabantu Local Municipality 2
Vulamehlo Local Municipality 0
Surveyed co-ops -
Focus group with co-ops members from 4 co-ops 17
Table 9.1: Snapshot of Clothing Industry Firms in Ugu District, 2014
1) Preliminary verbal inputs – from CMTs
2) Preliminary verbal inputs - from Designers
3) Insights from - CMTs
4) Insights from - Designers
5) Insights from interaction - btw CMT’s & Designers
6) Mini Case
Qualitative Analysis
Insights for Strategic InterventionsCMT’s:1)Compliance2)Scarcity of skilled labour3)Cost of Rentals4)Cost of Utilities5)Absenteeism of Employees6)CMT prices7)Financial assistance8)Multi-Purpose Centre9)Working with Designers10)CCMA and Bargaining Council
Designers:
1)Geographic Spread2)Rentals3)Machines4)Product range5)Access to Fabric6)Production and Marketing7)Common Vision
STRATEGIC FRAMEWORK
STRATEGIC INTERVENTIONSTable 11.1: The 8 Step Intervention Process
Step 1 - Forming the Project Steering Forum
Step 2 - Developing the Value Proposition
Step 3 - Developing and Leveraging Core Capabilities [Through training &
incubation
Step 4 - Integrated Manufacturing - Multipurpose Clothing Support Centre
Step 5 - Development of Partnerships and Alliances
Step 6 - Brand Development
Step 7 - Market Access
Step 8 - Industry Development Programmes
Diagram 11.1: Multipurpose Service Centre and Incubator
Various centres can specialise as follows:-
1)Marburg – Main Multi-purpose Production and Support
2)Port Shepstone – Retail
3)Margate – Incubation
4)Gamalakhe – Training
5)Scottsburg and Harding – Incubation [phase 2]
DIAGRAM 7.2: Community Based Manufacturing
Incubation of micro enterprises involves Access to:-
1)Workspace2)Machinery3)Technical skills4)Business skills5)Markets6)Finance7)Warehousing8)Coaching and Mentorship9)Production Management Techniques e.g. JIT, Lean etc. 10)Co-operative liaison11)Specialist services e.g. NCPC – energy efficiency12)Miscellaneous services
Step 7: Market Access: This can be facilitated by:- 7.2.1: Supplier Readiness Programmes:
7.2.2: Enterprise Development Programmes with Retailers: •Supplier Credit•Early Payment•Expenses towards modernisation•Expenses towards Skills Development – Technical as well as Business Skills
7.2.3: Local Market Activation:
•Fashion Shows •Buyer Fairs•Retailers
Step 8: Industry Development Programmes:
8.1 Incentives Programme•Production and export incentives [DTI]•Awards – Productivity, Labour, Innovation
8.2 Assistance Programme•Micro credit•Government procurement•Garment beneficiation
Weaknesses within perceived strength of China are:-
1) Price Weaknesses2) Cost Increase3) Response Time4) Customisation5) Market Preference6) Linkages with Other sectors
Given the experience from Newcastle, it may be beneficial to bring in Chinese companies as investors into the Ugu Clothing Manufacturing Value Chain.
Potential Partners include :-
1)Ugu District Municipality2)KZN DEDT3)KZN Fashion Council4)KZN Young Designers5)DTI help desk6)Coastal Clothing Manufacturers’ Association [CCMA]7)SETA help desk8)Esayidi FET College9)Compliance desk [Bargaining Council]10)Textiles Support Centre [Clotex, Cape Town]11)Ithala12)SEDA13)Anchor Retailer [Big]14)Saris for Good Karma [charity based]
No. ITEMEstimated Budget Scope
Step 1 Forming the Project Steering Forum40,000 Petty Expenses, Registration, Legal Fees,Meeting Expenses
Step 2 Developing the Value Proposition 40,000 Workshop, Meeting Expenses, Report Writing Work
Step 3Developing and Leveraging Core Capabilities [Through training & incubation] 750,000 Training Fees, Venue, Refreshments
Step 4Integrated Manufacturing - Multipurpose Clothing Support Centre 3,000,000
1 District Hub, 3 Satellite hubs. Equipped with machines, warehousing
Step 5 Development of Partnerships and Alliances 75,000 Workshop, Meeting Expenses, MoU Drafting
Step 6 Brand Development250,000 Graphics, Design, Research, Website, Marketing Materials
Step 7 Market Access, Supplier development 1,000,000 Advertising, Event Management, Displays,Hospitality
Step 8 Industry Development Programmes 750,000 Awards, incentives, Events, Training, Accreditation
TOTAL 5,905,000
Indicative Business template
Notes:
These are only indicative budgets to guide the development of a Business Plan.
This is not a business plan, but guideline to broad cost centres
To be balenced between available resources and Scope of the programme
It is more cost efficient to subsidise or partner with Private Sector players than run own operation
Scope and Time will determine service provider's quotes Delays would lead to escalations
The approach should be to use this as seed funding to leverage larger private sector resources
An entrepreneurial appraoch needs to be taken
District Hub
District Hub Focus Area Item Scope Cost TotalSupport other hubs Space 1000 sq mtrs 100,000General Mfg Machinery Shared Key Machines+Basic 300,000
Staff Co-ordinators+Hub 250,000Others 100,000Furniture Storage 50,000Training Central Trg + Productivity 100,000 900,000
Local Hub Beach wear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000
Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000
Local Hub Sleep wear, Inner wear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000
Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000
Local Hub Workwear Space 750 sq mtrs 75,000Fashion wear Machinery Basic Machines for Innerwear 200,000Procurement Staff 2 200,000
Others 75,000Furniture Basic Furniture 50,000Training Basic Training 100,000 700,000
Total Estimated Budget 3,000,000
Ugu District Clothing Manufacturing Incubator
1. Bankable Business Plan document
2. Project Steering Committee formation
3. Site identifications
4. Investor liaison
5. Funding arrangements
6. Entity registration
Next Steps towards the UGU DESIGN AND CLOTHING CLUSTER:
QUESTIONS…