The findings show that such an expansion could raise local sourcing by 20%, add billions of rand to annual manufacturing output and create up to 34 000 jobs.
The study, conducted over a full year by industrial development consultancy BMA, examined demand among major retailers for greater local sourcing and assessed capability and capacity across manufacturers in Southern Africa.
It also developed a commercial business case and outlined practical actions to increase localisation, in alignment with the Retail, Clothing, Textile, Footwear and Leather Master Plan. The objective was to convert policy ambition into actionable steps that retailers and manufacturers can implement.
Speaking at the launch, LSF Chief Executive Ishrat Kathrada said the research confirmed strong potential demand for locally produced garments and highlighted the need to scale manufacturing operations.
Kathrada said factories need to grow in size to meet retailer requirements. He explained that larger factories can employ more people, reach essential price points, and handle compliance obligations more effectively while ensuring fair wages. He described the study as an important milestone that offers a clearer path for the industry to advance national localisation targets.
The study outlines a pathway to improve price competitiveness while maintaining compliance. A key finding is that too many factories operate at suboptimal scale. Modelling shows that factories that are too small struggle to recover overheads, face limited scope for investment and cannot compete on price. Scaling up is therefore presented as a critical requirement for long-term viability.
Labour unions have welcomed the findings. Michael Lawrence, Executive Director at the National Clothing Retail Federation, said the study opens new opportunities and provides clarity on where investment and orders should be directed. He said retailers are now better equipped to align their procurement strategies with local manufacturing capacity.
Simon Epel, Director of Research at the SA Clothing and Textile Workers Union, said the research addresses the information gap that often exists between manufacturers and retailers. He noted that the findings show the need for factories to reach optimal employment levels of roughly 180 to 200 workers to compete with imported goods, particularly from Asia. He said the next step is to explore how small and medium-sized factories can transition towards this scale.
Epel added that local manufacturers struggle to manage costs during seasonal slowdowns in domestic demand. The study suggests that factories should pursue international orders during quieter months to stabilise utilisation and cash flow. He welcomed this recommendation and said it shows that opportunities exist even in a competitive global market.
The study also points to the importance of more adaptive shift models to improve productivity. For product categories with strong short-term localisation potential, such as basic garments, success will depend on aligning demand commitments, upgrading compliance practices, improving skills development, expanding upstream investment and scaling factories.
Firm-level adjustments, such as revising shift structures and targeted incentives, will also be necessary to unlock competitiveness. The LSF said the findings provide a clear roadmap to rebuild the clothing and textile sector and restore its role as a significant employer in SA.
–ChannelAfrica–
