The hidden value of locally manufactured goods the school uniforms example of what costs a family and the country less.

By Joe Tau, Managing Director, Allwear

In January, a parent sending a Grade 8 entrant to school needed a minimum of R5 015.78 before the child walked through the school gates, according to Teneo Education. Close to R2 714 of that paid for the uniform itself, the blazer, the shirts, the jersey, the trousers or skirt. At the national minimum wage of R30.23 an hour, that is roughly 166 working hours for one child. A household with two children in uniform doubles the figure. The cost rose by about 8% in the past year against headline inflation of 3.5%. Back-to-school is running at close to double the pace of inflation compared to the shopping trolley.

A typical school shirt in South Africa does not lead the life of a casual garment. It is worn five days a week, washed over the weekend, and worn again on Monday. Across four terms it is worn close to two hundred times and goes through forty wash cycles in a single year. The real question for parents is not unit price but whether the shirt will still be wearable in the fourth term, whether it will survive a second year on a younger sibling, and whether the colour, the fabric and the stitching will hold up to that usage. In the South African context, that is the test of value, and value, over the school year, is what determines cost.

A uniform produced in a South African factory is built for the usage it will actually see. Fabric weight is chosen for a Highveld winter and a wet Cape morning. Stitch density that assumes a wash cycle every weekend, colour held fast against repeated sun and detergent and badges sewn for the ordinary traffic of a school day are the hallmarks of value manufacturing. The local manufacturer is close enough to stand behind the product, with its name on the label, reachable on the phone, and a quality system that answers to the retailers and the schools that distribute it. Accountability is what makes the durability enforceable, and it is what closes the gap between the price and lifetime cost.

 

 

Joe Tau, Managing Director at Allwear

The objection will be that quality of this kind carries a premium at the till, and that South African factories cannot match the unit prices coming in from larger global producers. On the evidence of the past five years, that is no longer accurate. Investment and modernisation in South African clothing manufacture, of which school wear is a core segment, have brought production cycle times and unit costs down to levels that major retailers describe as globally competitive. Local procurement by the large retail groups has risen by more than half since 2019, and local manufacturers have placed hundreds of millions of additional units on South African shelves over the same period. Where the rules are applied evenly, the South African factory competes on price and wins on value. Where a gap arises is the persistent prevalence of unlawful sweatshops.

The rules in manufacturing are not always applied evenly. A portion of the low import prices reaching South African shelves reflects scale and labour-cost differentials that no honest competitor anywhere can fully meet. That portion of production is a feature of global economics and it is not contested.

A further portion, however, is not. It reflects customs duties that have not been collected, parcels declared at a fraction of their true value, and sweatshop factories, foreign and domestic, that operate outside the rules applying to their compliant counterparts. South African manufacturing is burdened by the second category. Labour inspections in Newcastle in November 2022 and February of this year returned the same pattern of sub-statutory wages and dormitory and work conditions that are unlawful and non-compliant. The call from compliant South African manufacturers is not for shelter from global competition. It is for an even playing field for every participant in the market, and on that footing, local school wear competes on both price and quality.

There is a further return on money spent on locally manufactured items that does not appear on the price tag. The clothing sector in this country employed roughly 164 000 people in 2010. By the end of 2023 the figure stood at about 143 000. Textiles have followed the same trend. Those lost jobs represent households that no longer have formal wage income, often in the communities where those often unemployed parents later have to buy school uniforms. The rand spent on a locally made uniform pays for the garment, for after-sales service, and for a living wage in South Africa. The rand spent on the imported substitute, whatever its origin, pays for the garment alone. Compounded across a decade of back-to-school seasons, that burden lands on the same, usually low-income households.

Taken together, the case is straightforward. On durability, the locally made uniform is built for the South African school year. On cost of manufacture, local production is already globally competitive, and becomes more so as the rules are enforced evenly. On community return, the rand stays closer to the family that spent it. Value, not price, is the true determinant of cost, and value, on each of those measures, points to the school wear made at home.

Allwear manufactures school uniforms in South Africa and I run it. The argument does not turn on where a parent ultimately buys. It turns on the premise that low price is not low cost. It is a deferred cost. And deferred costs in South Africa, are almost always carried by the families that can least afford to carry them.