Job Creation Trust Presentation The State of the Social Economy of South Africa 4 & 5 September 2013 Sunnyside Park Hotel JHB Session 3 Job Creation in the Social Economy Presented by Sharmiela Garnie – E.D.

Creating and Retaining Employment in the Clothing Industry Creating and Retaining Employment in the Clothing Industry

The Job Creation Trust The Congress of South African Trade Unions (Cosatu), The National Council of Trade Unions (Nactu), and the Federation of Unions of South Africa (Fedusa) founded the Job Creation Trust (the Trust – Trust number IT 1791/99) at the Presidential Job Summit of Asking workers to donate a day’s wages and companies to contribute one day’s profit, it was an initiative by organised labour to contribute and fight against unemployment in South Africa. At over 40%, unemployment exacerbates poverty and contributes to other social ills such as crime, disease and underdevelopment of communities. 3

JCT - Creatively intervening in the clothing sector 4 By establishing a design house cluster model, that targets the local retailers the JCT has set a benchmark for an innovative crowding in of all support mechanism and incentives that target the clothing sector. This opportunity for the JCT to invest in the establishment of the first black owned design house, could just be the foundation needed to restructuring the clothing industry, and set the tone for the return of onshore procurement by the local Retail Sector. The design house sector, is monopolized by 2 key players in the W.Cape, Kazak and Barry Kline. Our intention is not to necessarily to compete with these design houses but to increase onshore procurement The clothing sector needs an innovative and strategic business. We believe that we have secured a formidable team of skilled professionals to undertake this task.

Job creation & retention in a recession? The clothing sector in the W.Cape has had major challenges in the past 15 years and one needs to think creatively, in meeting these challenges. There has been very little reinvestment in the sector in terms of equipment upgrading and skills development. Banks and other financial institutions have shunned this sector and thus access to finance for expansion was not available. Coupled with the current recession, and the remodeling of the clothing manufacturing sector, the question remains how do we create jobs and at the same time retain jobs? The answer: by creating a Social Enterprise Design House Cluster which provides the local retailers with a design and manufacturing (CMT’S) cluster along its supply chain to encourage onshore procurement. Thus addressing the Retailers need, for shorter delivery times, control over production quality and faster to market solutions And in this manner retaining and creating new jobs in the local clothing sector, by creating onshore world class design and manufacturing capabilities Management and staff should have employed should be informed, understand and buy in from day one to the objectives and principals of the company which is a social enterprise to enable sustainability and success. 5

Retailers adopting a mix procurement strategy The retail sector have adopted a mix procurement strategy within which they still have key items procured locally Currently 70% of all stock is imported. and if we capture just 1% of this within the next 2 years, we would have made a major impact in terms of retaining and creating new jobs in the sector. Our initial discussions with 2 of the major retailers have proved positive and they have agreed to move key items to local onshore production provided that there is capital reinvestment in the supply chain, quality and price is acceptable, the design house will be more jobs driven than profit driven and this will enable the design house products to be competitively priced. The fact that this Design house cluster address the above, and the skills base in the design house, as well as the utilisation of their approved CMT’s has excited them and they are keen on a structured and well coordinated strategy of procuring key lines locally. 6

JCT’s Creative Design Company aims to stimulate Job Creation through local production 7

Words of Wisdom - author unknown