Production falls again

Footwear production declined by another 8% in 2000, continuing the trend for output to drop to less than the total of imports, both legal and illegal. Most footwear companies are turning to importing shoes instead of making them, and the removal of the temporary import quota on footwear from non-WTO countries - read China - has accelerated this inflow. At the end of the year the last significant footwear leather producers consolidated their production and downsized to approximately half the output of three years previously. A similar consolidation took place in the automotive sector, with a major group merging their two plants into a larger one, which they have since battled to keep busy as it appears there is now over-capacity in the industry. Four large tanneries supply a total of some 10,000 finished hides daily to motor manufacturers for export as seat covers. Prices have remained depressed while hide costs have risen. The continuance of the Motor Industry Development Plan (MIDP), which targets leather components, among others, as strategic export items, seems essential to secure the future of this sector with large manufacturers such as BMW casting their net wider and scouring from suppliers in other countries. Raw material exports continue, mostly to Italy and Türkiye, although the recent foot and mouth scare in parts of the country, now contained, has not helped. Main export items include sheepskins (almost all raw, with better grades pickled), wet-blue (lower grades) and hand flayed dry salted hides. The continuing fall of the rand against the dollar and the pound is a mixed blessing in that it aids exports, but inflates imports such as fuel. The signing of the African Growth & Opportunity Act (AGOA) by outgoing President Clinton has opened the US door to specific South African manufactured goods, including agriculturally-related products such as footwear and clothing. 2000 saw the closure of LIRI, the country's research and training facility for the raw material and tanning industries. As this was also the operational centre for the SA Skin Hide & Leather Council (SHALC), it was necessary for this trade organisation to establish a new secretariat, which it has now done. SHALC has grown in size to 16 members, and represents all but one of the large tanning companies, as well as several smaller businesses.