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close this bookExporting Africa: Technology, Trade and Industrialization in Sub-Saharan Africa (UNU, 1995, 434 pages)
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View the documentExporting Africa
View the documentContributors
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close this folderPart I. Exporting Africa: an analysis
close this folder1. Introduction
View the documentBackground
View the documentThe position of Africa in world trade
View the documentIndustrialization and economic transformation
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close this folder2. Trade theory: relevance and implications for African export orientation
View the documentIntroduction
View the documentConventional trade theory: essence and relevance
View the documentCritics and extensions of conventional trade theory
View the documentTrade theory and accumulation effects: introducing new growth theories
View the documentSome implications of new trade theories for Africa
close this folder3. Some conceptual issues and methodology of the study
View the documentSome conceptual issues
View the documentThe dynamics of firm capabilities
View the documentGuiding questions of the study
View the documentThe case study approach
View the documentSampling: firms, industries and countries
View the documentImplementation of the study
close this folder4. The changing world economy: market conditions and technological developments
View the document(introductory text...)
View the documentChanging market conditions
View the documentThe changing prospects of access to world markets
View the documentNew technologies and the implications of changing technological conditions
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close this folder5. Main findings of the study: a synthesis
View the documentPosition of exporting firms in the world market
View the documentHistory of exporting: conditions and path followed
View the documentHow firms maintain or improve their positions in export markets
View the documentHow some firms lose ground in export markets
View the documentLinkages and supporting industries
View the documentThe influence of policy on firms' export activity
close this folder6. Conclusions and policy implications
View the documentBuilding core capabilities: towards competitiveness
View the documentEconomic reforms and industrialization
View the documentExport orientation or import substitution?
View the documentLocal or foreign investment?
View the documentRegional cooperation and trade agreements
View the documentNotes to part I
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close this folderPart II. Country studies
close this folder7. Zimbabwe
View the document(introductory text...)
View the documentIntroduction
View the documentTextiles and clothing
View the documentFootwear
View the documentAgricultural machinery
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close this folder8. Tanzania
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View the documentIntroduction
View the documentFirm histories
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View the documentEmerging issues and the challenges ahead
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close this folder9. Nigeria
View the document(introductory text...)
View the documentIntroduction
View the documentTextiles
View the documentBrewing
View the documentFood and beverages
View the documentConclusions
View the documentAppendix: the incidence of leasing in Nigeria9
View the documentNotes
close this folder10. Kenya
View the document(introductory text...)
View the documentIntroduction
View the documentThe textile and clothing industry
View the documentFood processing
View the documentThe pharmaceutical industry
View the documentThe metal industry
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View the documentLeather and footwear industry
View the documentSummary
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close this folder11. The Ivory Coast
View the document(introductory text...)
View the documentIntroduction
View the documentThe cooking fats industry
View the documentPreserved and processed foods
View the documentThe textiles industry
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close this folder12. Mauritius
View the document(introductory text...)
View the documentBackground
View the documentThe firms in the sample
View the documentFirm strategies
View the documentLinkage capabilities
View the documentResponse to external factors
View the documentNew technologies and exports
View the documentNote
View the documentBibliography
View the documentAppendix: Survey questions

Textiles and clothing

Background

The textile and clothing sub-sectors have played, and continue to play, a major role in the Zimbabwean economy. In addition to providing one of the most important consumer goods for the population, these sub-sectors generate significant amounts of employment and are critical sectors in Zimbabwe's drive to increase manufactured exports.

The textile and clothing sub-sectors consist of three components: production and ginning of cotton, transformation of lint into yarn and fabric, and the conversion of fabric and yarn into garments. Our attention will be focused on the last two components which with some other sub-sectors, form the hub of technologically dynamic exports from the country's manufacturing sector.

The parastatal Cotton Marketing Board (CMB) has an exclusive monopoly over the processing and marketing of cotton in both domestic and foreign markets. While in the past most lint has been exported, there has also been an increasing absorption of cotton domestically, as the local textile industry has grown. The CMB has always given priority to domestic users, exporting only what was not needed by the domestic textile industry (Mead, et al., 1992 p. 2). The Board employs about 1 500 people on a full-time basis and an additional 2500 seasonal workers.

The price of lint paid by local spinners and weavers was subsidized to the tune of Z$2-6 million per year in the early 1980s and the subsidy rose to Z$75 million in 1990-91. While part of the cost of this subsidy was born by the government, over the years the largest share of the subsidy for spinners and weavers has come from the price they were able to pay to growers, which was lower than it would otherwise have been. Partly as a result of this, the number of commercial farmers growing cotton declined by 20 per cent between the mid-1980s and 1990. While this slack was at first taken up by small-scale communal farmers, since 1988/89 the number of communal farmers growing cotton has also declined (Mead, et al., 1992, p. 3).

The spinning and weaving industry is dominated by five large companies, two of which produce 60 per cent of the total textile output of the country and account for close to 75 per cent of the fabric supplied to domestic users. These five firms together employ about 12000 people and the value of their sales is about Z$500 million. In addition there are 45-50 registered small and medium-size enterprises engaged in spinning, weaving and finishing off textiles and knitting cloth, providing employment for an additional 9000 people; giving a total of 21000 employees engaged in spinning, weaving, knitting and finishing textiles.

Employment within the clothing sub-sector has increased by over 65 per cent since 1984. In 1982 there were 113 clothing manufacturers; by June 1992 the clothing sub-sector consisted of over 250 companies employing over 24000 people. Knitted clothing, including T-shirts, underwear, hosiery and jerseys, is also manufactured, employing about 9000 people. There are also small and medium-size garment manufacturers who operate without registration. Whilst it is difficult to estimate the number of such enterprises or the employment they provide, the numbers are not insignificant.

The figures quoted here do not include some thousands of people engaged in retail dressmaking and tailoring, or the large number of garment cooperatives established in rural areas. An estimated 100 000 people are employed by these small firms as tailors and dressmakers. The clothing sub-sector is thus one of the most labour-intensive sub-sectors in Zimbabwe's manufacturing sector.

The clothing sub-sector manufactures a wide range of garments including work clothing, menswear, children's wear and women's clothing from housecoats to high-fashion garments. Some items have very low mark-ups which ate counter-balanced by other, more fashionable and higher-risk garments which require higher prices to be viable. This is particularly so in the fashion industry where prints and colours change from season to season and year to year, making unused fabrics and undelivered garments saleable in succeeding seasons only at very heavy discounts.

Some of the garment manufacturing firms are highly export-oriented, not only to the South African market and the countries of the East and Southern African sub-region but also to the more sophisticated and competitive European and North American markets. These firms have enjoyed considerable growth in exports in recent years in spite of the sub-sector's inability to obtain competitive raw materials and the rising input costs, which cannot be passed on because both the home and export markets have become increasingly competitive. These difficulties have been further exacerbated by the current drought and high interest rates pervading the economy.

History of firms in the sample

Origins, ownership and structure

The six firms surveyed in the present study have production experience ranging from 24 years to over 50 years. Four were established during the 1950s (Table 7.2).

All but one of the firms were established as family enterprises to supply the domestic market. Family ownership appears to have contributed to the steady growth of some firms. Most often the dynamism has come from the family members who provided the vision, the will to survive and continuity of management.

The oldest firm in the sample, Bernstein Clothing, was established in 1939 by the Meyer family to manufacture clothing, mainly shirts, for the domestic market. It has experienced all the phases of industrialization described on pp. 143-8.

The growth in manufacturing and exporting activities can be illustrated by the case of Concorde Clothing Company, which developed from a wholesale business established by the Lessem family in 1944. Along with their wholesale business, they established a small workshop for the manufacture of khaki shorts and shirts. In the early 1950s they were already exporting garments to the UK. By 1959 both the wholesale and manufacturing operations had grown substantially and the business was transformed into a clothing company by the name of Concorde Clothing. This was done with the assistance of a French company, Boussac, which provided short-term technical assistance in setting up the new company. The technical assistance took the form of providing technology and machinery. Experts were sent from France to guide the movement into manufacturing better-quality shirts' lounge shirts' trousers, etc. Personnel from Boussac stayed for about six months at a time, and the French company continued for some years to sell high-quality fabrics to the Zimbabwean firm and to provide the much-needed technical assistance.

Fashion Enterprises. established in 1959, started as a small manufacturing enterprise to supply the domestic market, while exporting small numbers of garments to Zambia and South Africa. Exports to South Africa' however, constituted the first serious attempt to develop the firm's export markets. There was little difficulty in entering the South African market in both the big chain stores and the small boutique shops. From the start Fashion Enterprises set up a comprehensive agency to promote its exports into South Africa. This was the major initial investment by the firm in the South African market.

The only enterprise in the sample which was not initially a family business was David Whitehead Textiles Limited, established as a textile mill in Chegutu, Zimbabwe, in 1952. The company was established as part of a strategy to set up textile mills in the British colonies by a Lancaster-based textile company, David Whitehead UK.3 Following the takeover of David Whitehead - UK by Lonrho in 1970 the latter acquired a 65 per cent holding in David Whitehead Textiles.4

In terms of structure, the larger and more entrepreneurial firms have a high degree of vertical integration. The two textile firms in the sample are typical of the larger firms in the sub-sector. These firms started with the manufacture of fabrics and gradually integrated backwards into spinning and weaving. For instance, in the case of David Whitehead Textiles, its raw material - cotton yarn - was initially purchased from what was then Rhodesian Spinners in Kadoma. The main production activity of the firm was to weave and dye fabrics for the domestic market and neighbouring countries. In 1960 David Whitehead Textiles purchased Rhodesian Spinners, which is now its spinning division, from the government. Two years after going public on the local stock exchange in 1968 the company purchased C.W. Hall in Gweru, which became its hosiery division.

The largest clothing firm in the sample, Fashion Enterprises, also started as a manufacturer of garments but with time became vertically integrated. Under the Fashion Industrial Holdings Group of Companies, there are two garment manufacturing firms (Fashion Enterprises and Julie Whyte) serviced by an in-house textile printing and dyeing firm (Screentone).

Thus, compared to their counterparts elsewhere in the third world, many large clothing producers in Zimbabwe - like large producers in other sectors of the economy - are highly vertically integrated, undertaking many peripheral or non-core activities rather than purchasing from more specialized outside suppliers. Two factors help to explain this tendency. First, the shortage of raw materials and other inputs since 1965, at the onset of UDI, has eroded the firms'

trust in domestic markets to supply the much-needed inputs of goods and services. The Zimbabwean economy is still a shortage economy. In this situation, large firms have been under considerable pressure to take whatever steps were necessary to ensure that they had access to a regular supply of inputs. Secondly, the often non-competitive environment in which large companies operate has meant that, to be assured of a more reliable supply, they have been able to get away with paying a risk premium; the resulting higher costs being easily passed on to final consumers.5

There is reason to believe that both these factors should be changing. Some vital inputs continue to be placed under the OGIL, and the operation of the ERS has enabled firms to procure a wide range of inputs on easier terms than before. But because of the current drought, the rather slow liberalization of the supply of the required inputs and the continued monopolistic tendencies, especially among the large suppliers, the existing vertically integrated structure of the large firms is likely to persist among the textile and garment producers.

Export history

Though originally established for the domestic market, Zimbabwean companies in the textile and clothing sub-sectors carried out some export activities from the 1960s and 1970s, albeit at very low levels. For example, Concorde Clothing became the first local clothing company to export garments by airfreight to the London C&A shops in 1963. These exports continued for only three years. During the UDI period the company switched its exports to South Africa.

The two textile mills in our sample have exported since the 1960s but their export growth has been lacklustre. For example, in the early 1970s David Whitehead Textiles had insignificant exports to South Africa. In the mid-1970s, because of the shortage of foreign exchange, the government agreed to let the company export yarn to Europe and retain the proceeds in order to purchase machinery. That market was retained for a while but because of the thriving domestic market around 1980 the company concentrated on supplying the domestic market. Only small amounts of canvas and yarn were exported to South Africa. Cotton Printers, the other textile mill in the sample, exported cheap bed sheets to South Africa in the 1960s. By 1982 its exports amounted to Z$1 million - all to South Africa.

Table 7.2 Profile of Zimbabwean textile and clothing firms

Firm

Year established

No. of employees

Main products

Textile firms:




David Whitehead

1952

4900

Loomstate fabrics, and some yarn

Textiles




Cotton Printers

1952

1500

Yarn, loomstate fabric, bed linen, indirect fabrics exported through other firms

Clothing firms:




Fashion Enterprises

1959

2500

Women's and children's dresses. pants, skirts blouses, unstructured jackets. Men's shorts

Concorde Clothing

1959

459

Men's trousers, shirts, suits, casual wear

Bernstein

1939

385

Shirts and men's trousers - dresses were produced in the past

Femina Garments

1968

136

Women's wear (skirts, blouses, maternity) and children's wear

Source: Fieldwork interviews

Most companies only started thinking about promoting exports in earnest around 1988. After 1990 exports started rising substantially in both volume and value terms. One of the firms' exports rose from Z$0.5m in 1980 to Z$10.5m in 1990 and to Z$44.6m in 1992. In volume terms its exports of fabric increased from 4.2 million metres in 1991 to 7.8 million metres in 1992. Domestic sales revenues dropped from Z$120 million in the first half of 1992 to Z$83 million in the second half' while exports increased from Z$17 million to Z$27 million in the same period. Another textile firm's exports amounted to 40 per cent of total production in value terms and 55 per cent in volume terms in 1990/91. In certain production lines as much as 90 per cent of the fabric (in volume terms) was exported, but this is likely to come down to 70-75 per cent when the domestic market picks up.

Zimbabwe's clothing companies, like the textile mills, have been exporting piecemeal since the 1960s and the 1970s, hut the more serious drive towards export-led growth started in the second half of the 1980s and the early 1990s. Thus Concorde Clothing exported garments to the UK between 1963 and 1965, thereafter switching exports to South Africa until 1981, when the company turned to the domestic market. The current export drive by Concorde Clothing began in 1985 when 15 000-20 000 units were exported to the UK. By 1992 export volumes to the UK market had risen to 100 000 units and new markets were being opened up in France and Holland. The two companies, Concorde Clothing and Bernstein, had an average export growth rate of 55 per cent from 1991 to 1992.

In 1978/1979 Fashion Enterprises, the largest exporter in the clothing sub-sector, started exporting to Western Europe and these exports had increased by 1980. The firm's exporting activities were greatly assisted by the introduction of the ERF. In 1986, 11 000 units were sent to the USA, rising to 250 000 in 1992. In value terms Fashion Enterprises' clothing exports increased by 400 per cent from 1980 to 1990 and since then by an average of 65 per cent per year.

Largely because of the slump in the domestic market, export production has risen as a proportion of total production. One of the clothing company's exports represented 22.5 per cent of total production in 1992. In terms of units. another firm's exports represented 70-75 per cent of total production, while in value terms they represented 50-55 per cent of total production during the same year. This increase in the export share came about as a replacement for the loss in the local market.

The smallest firm in the sample, Femina Garments, concentrated solely on the domestic market until 1987, when small numbers of garments were exported to Germany. A serious export drive started only in 1990, with increased exports to Germany and small volumes going to Botswana.

The sudden rise in exports in recent years can in part be explained, paradoxically, by the drying up of foreign currency allocations to importers by 1988/89 and by the introduction of the ERS (see pp. 146-7). The ERS enabled exporters to earn the much-needed foreign currency. In other words, in order to get imports, companies had to be exporters. The introduction of the Economic and Structural Adjustment Programme (ESAP) and the decline in the domestic market as a result of the current drought have helped to accelerate the programme.

External factors affecting export growth

As shown above, the recent growth in exports in the textile and clothing sub-sectors has been quite impressive despite the difficult circumstances faced by individual companies. The principal external factors that were found to be adversely impacting on the export growth of textile and clothing sub-sectors are (1) inability to obtain export finance at a competitive cost and (2) problems of obtaining competitively priced raw materials. Other factors adversely affecting firms' export growth are connected with infrastructural problems and bureaucratic and policy obstacles. Whilst the supply side of the most important inputs is not competitive, the companies cannot pass on these high and rapidly rising input costs because both the domestic and export markets are intensely competitive.

Ability to mobilize export finance

In the Zimbabwean case, company size is a significant factor in determining the firm's ability to mobilize financial resources in general, including export finance. This is mainly because the larger companies deal with larger volumes compared to their small counterparts. Thus whilst the smallest firm in the sample (Femina Garments) increased its exports by an astronomical figure of 218 per cent from 1990 to 1991, this was in value and volume terms far less than the larger firms in the sample. During the same period, the slowest export growth in the sample, in percentage terms, was that of Concorde Clothing at only 8 per cent but because of Concorde's size this represented a greater increase in terms of value than Femina achieved.

On the other hand, Fashion Enterprises combines both large volumes and high export growth: 129 per cent from 1990 to 1991 or an increase of US$31 million compared to Femina Garments' increase of US$48 000. In Zimbabwe, where resources, and especially finance, are not freely available in the market on a competitive basis, larger companies have more access to these resources than the smaller firms. A company that has successfully exported before is further assured of the critical foreign exchange resources for upgrading and replacing its machinery and equipment and procuring spare parts through its utilization of the ERS. Such resources are not easily available to new exporters and especially not to small firms, which can only obtain ERS funds at a premium price. At the prevailing interest rate of over 30 per cent, access to export finance becomes prohibitive.

However, all exporters face similar problems with regards to mobilizing export finance, which is a major problem for textile and garment exporters. It normally takes 90 days for export orders to be paid, and local companies insist on obtaining an irrevocable letter of credit. But in practice textile mills say that it takes up to 9 months from the time cotton is purchased from the CMB to the time when export proceeds are received. Cotton purchases have to be paid for within 7 days. One garment manufacturer said it normally has an 8-month cycle for exports to the US and 2-3 months for Europe because of airfreight arrangements. In the meantime the companies have to finance their production through bank bills, which is expensive given the high interest rates prevailing in the economy. Before the domestic market collapsed, companies financed export activities from the more lucrative domestic market.

Raw material problems

Both the textile mills and clothing companies face problems with regard to raw materials, although in different ways. The main raw material problem faced by textile mills appears to be the pricing structure of cotton from the CMB, while that of the clothing companies is related to the price and delivery quality of fabrics from the textile mills.

As shown above, the problem of cotton prices and deliveries from the farmers is an historical one dating from the 1980s, when a number of farmers abandoned cotton growing because of the low price paid by the CMB, This in turn has led to rationing of cotton to the textile mills. By June 1992 they were allocated only 60 per cent of their requirements.

The problem has been further compounded by the commitment of the CMB to export part of the lint instead of supplying all that is available to the local mills. The export parity price of cotton has been more attractive than the domestic price paid by the mills.6 On the other hand, the clothing sub-sector's biggest and most long-standing problem is obtaining suitable raw materials, especially fabrics for both the local and export markets. The position faced by the clothing manufacturers was recently summarized by the Zimbabwe Clothing Council as follows:

Locally-produced fabrics are in the main unsuitable for the clothing export market, increasingly so since world fashion trends have dictated a swing to fabrics with a high proportion of special weaves, blends and finishes not available from local textile mills. Even the few types of fabric local textile mills can produce frequently cannot be used for export because of unreliable quality and deliveries and the unfortunate practice adopted by most mills of refusing to hold prices at contracted levels. (Zimbabwe Clothing Council, 1992, p. 2)

This creates insurmountable difficulties for clothing manufacturers attempting to cost their exports in a rational manner. An equally insurmountable problem is the high reject rates on local fabrics, which can exceed 15-20 per cent. These rates have become a norm and sometimes as much as 50 per cent of fabric delivered is unusable even at the lowest-budget end of the local market. The two firms interviewed confirmed these high rejection rates. Reject garments due to fabric flaws, especially poor weaving and dyeing standards, often lead to the cancellation of export orders. Even in the local market, such garments are sold at a considerable discount and in some cases at well below cost.

Such problems would generally not exist where there is competition among producers. Free competition would normally ensure that suppliers would adhere to quoted prices irrespective of subsequent increases in their own input costs, and that their products would be competitive in terms of quality and delivery times. Lack of competition in the textile sub-sector is likely to permit the industry to continue to increase prices at will without any improvement in quality, variety and reliability in deliveries.

However, as a result of the rationing of foreign exchange, local clothing manufacturers cannot readily obtain the imported fabrics which are demanded by both domestic and export markets. The representatives of the clothing sub-sector are, therefore, arguing that their inputs should be brought under OGIL as soon as possible, so there can be a realistic adjustment period before they have to face competition from imported finished clothing when that is finally put on OGIL.

In the Zimbabwean case these problems are made possible by the foreign exchange shortages and an almost monopolistic textile industry, in which over 250 clothing firms are effectively supplied by just five textile companies, of which two provide 60 per cent of the total textile output of the country.

Some of the textile mills recognize some of the problems faced by the clothing industry. As a step towards supplying the varieties of cloth required by local clothing firms, at least one textile mill has contemplated reducing style choice at the level of spinning and weaving by concentrating on continuous processing, while introducing more varieties or ranges at the level of dyeing and finishing. In Zimbabwean production conditions, to be competitive in terms of cost-effectiveness, a mill must produce a minimum run of 3000 metres of fabric at a time. This strategy is meant to enhance the competitiveness of textile mills by responding to customer requests within the minimum threshold of a company's production programme.

Textile mills confirmed that 30-35 per cent of the fabrics they produce would not pass international standards. As a result these are normally sold to local clothing firms. Their suggested solution is to invest in laboratory and shade-matching equipment. Two of the firms interviewed claimed that they already had plans to improve the quality of their products, as demanded by local garment manufacturers. This is becoming more important given the lack of competitiveness of local gray-cloth fabrics in the world market, a situation which is turning more textile mills to develop 'indirect exports': supplying good-quality fabrics to local clothing firms which, in turn, manufacture garments for export.7

Technology, productivity and human resources

Characteristics of demand in target markets

In the past, Zimbabwean textile and garment manufacturers failed to take advantage of the abundant raw cotton, low labour costs and reasonably good experience of textile manufacturing to exploit international markets. Only towards the end of the 1980s were the more entrepreneurial firms prodded into action by the decline in sales on the domestic market and the desire to earn more foreign currency, which could be obtained through the export incentive scheme and more recently through the ERS. But by this time the availability of raw materials had become a major problem and domestic labour costs had escalated following the introduction of minimum wages and a general increase in wages during the 1980s.

Production costs escalated during the 1980s, mainly due to increases in wages and other inputs. The opening up of the economy and general reduction in subsidies paid to public utilities (e.g. energy and transport) have also contributed to rising costs of production. This is in addition to the unpredictable price hikes by the local textile mills and the 1991 devaluation of the Zimbabwean dollar, which has increased the cost of imported raw materials, mainly fabric and the trim content of the garment.

Despite these problems, the textile and garment firms, especially the larger and more entrepreneurial ones, are aggressively seeking and establishing contacts in both the regional and overseas markets. Various methods have been used in order to penetrate these markets. Export contracts have been obtained through personal contact with overseas agents, chain stores, or posting independent agents in those markets. The more established enterprises have their agents in these markets, while others are in direct contact with the importers. More recently Zimtrade, a trade promotion organization co-sponsored by the government and the private sector, has assisted newcomers in the export market by organizing exhibits for Zimbabwean exporters in both the regional and overseas markets.8

Whilst in certain cases such markets are receptive, Zimbabwean manufacturers come under tremendous price pressure. More subsidized products from countries such as Pakistan and China take advantage of the falling price of fabrics in overseas markets. For example, the price of gray-cloth fabric has fallen from US$1.15 in 1987 to US$0.79 in 1992, a situation that is not helped by the near-monopolistic price of raw materials in Zimbabwe.

The firms interviewed are succeeding in varying degrees: exports accounted for between 20 per cent and 75 per cent of their production. Besides maintaining market shares in the more established markets, both textile and clothing firms are establishing footholds in new markets, especially in European and North American markets, where some of the larger firms have established solid export contracts. All the firms are seeking to raise their market share urgently in order to replace the shrinking local market.

Companies involved in the search for these markets are confident of increasing their market shares. Wage rates at least became competitive following the currency devaluation of September 1991, although this has been eroded by recent pegging of the exchange rate during a period of significant inflation. Managers are confident of maintaining the present levels of skills and production quality in Zimbabwe's textile and garment industry. The larger companies with access to modern equipment and technical expertise are able to maintain market shares and even increase them.

However, only the larger white-owned enterprises are in a position to take advantage of such opportunities, because of the concentration of experience, skills and overseas contacts required to make export contracts possible. The smaller operations do not have the resources to engage consultants to explore overseas markets. Because the price of exports must cover all the exporter's direct costs, including administrative costs, the higher the volumes exported the lower the production costs. Even when they are able to get export orders, small delivery volumes mean they cannot use containerized cargo, which is cheaper than airfreight cargo. There is, therefore, a need for government policy to facilitate the development of exports among the smaller enterprises.

Design capabilities

Zimbabwean textile and garment manufacturers have, over the years, developed design capabilities. Design was initially for the domestic market but some of these designs have been progressively adapted to the demands and specifications of external markets. Textile mills often have technical development departments which, beside their long-term project development, look into market requirements, especially the need for new varieties and styles of fabrics. In general R&D is done on a small-scale basis.

Most of the garment manufacturers said that they had no designers to speak of, especially in men's garments. Instead, a typical Zimbabwean firm needs a good merchandiser to put together a collection of colours and new styles for each approaching season. On the basis of this market information and trends the designer and factory pattern makers put up new patterns for the market. Once the market needs are identified and assessed, development takes the form of designing the product to suit the specification of the market. In other words, the local designers only copy fashions and trends from overseas.

Fashion Enterprises, the leader in women's clothing, have, however, acquired CAD/CAM facilities for their long-run production for the export markets. The company's design capabilities have been developed jointly with overseas customers or through promoting its in-house designs for both the domestic and export markets. Alternatively the exporter's own designed ranges can be promoted side by side with those of the customer. Because of changes from season to season, the companies maintain their in-house capability to design and develop new products in accordance with the desires and whims of the market.

Technology and productivity

In most of the textile and clothing firms, management positions are occupied by people who have been with the firms for a long time. In one garment manufacturing firm, the production manager has been with the firm for over thirty years and has thus seen all the changes and transformations in the production processes over time.

These have involved changes in aids to manufacture, fusing processes and the introduction of automatic markers.

There are, however, quite glaring differences in the technological processes adopted by companies in the sample. They range from firms with outdated plant and machinery to a few companies that can boast of the most modern plant by any standards. For instance, the Fashion Enterprises plant is comparable to any plant of its kind in Europe and North America. Modernization has not been limited to processing fabrics: advances have also been made in the area of merchandising, which is crucial for the development of the firm's own export ranges and when working with overseas-based agents to develop and quickly respond to customers' requirements.

Productivity has steadily improved because of improvements in technology and management techniques. One textile mill reported that in those areas where labour accounts for around 90 per cent of value added, e.g. in hemming, there have been many improvements in labour productivity. Both the textile mills said that the wage cost of the conversion of raw materials into finished products has been kept low while volumes produced have increased. This has been made possible by a number of factors including improved training of labour, improvements in production programming and reducing the varieties and styles produced in the production runs.

Two companies in the sample reported using an incentive bonus system to achieve higher levels of productivity. In one, the management sets an output target for every section. Any production above this point is rewarded by a bonus system on a percentage basis. The second bonus system rewards the department that achieved the best results at the end of each year. A third is the general bonus, which is awarded to all the workers depending on the general performance of the firm. This is given at the discretion of the board of directors of the company.

There are, however, still problems of low production quality because of old machinery, which would have been replaced long ago if foreign currency had been available. This is especially the case in the spinning of yarn. Despite these problems, in the regional context Zimbabwean textile firms have a competitive edge, even over their South African counterparts. This is mainly due to a prolonged history of protection of the textile industry in that country.

The production costs of clothing firms which have the larger portion of their production geared for the domestic market are badly affected by the uncompetitive prices and unpredictable quality of local fabrics. Though their wage rates and unit costs are not comparable to those in Asian countries, local garment exporters are fairly competitive in the context of Sub-Saharan Africa, including South Africa.9 The strength of local firms has been their reliability in producing quality products and delivery on time.

All the companies in our sample have strict quality control systems in place. Quality is regarded as an important part of production. There is a quality control department in each of these firms, but in addition quality standards are insisted upon at every stage of the production process. In one firm, management said that their in-house training programmes insist that quality and output go hand in hand. A trainee is only brought into the production line after achieving 75 per cent efficiency in both quality and targeted output levels. In other words, the concept of putting quality in the forefront of production is treated as a long-term strategy for companies in the export business.

Production linkages and subcontracting

Though the textile and clothing sub-sectors have quite well-developed forward and backward linkages, most of these linkages are limited to purchasing raw materials and other inputs between enterprises. Companies within the sub-sectors also cooperate closely in the event of machine breakdowns and exchange technical expertise among themselves. One large firm has a record of passing on to other firms those export enquiries they cannot handle.

This leaves out one kind of link between firms - the inter-firm trade in unfinished inputs in the form of Cut-Make and Trim (CMT). CMT is a system under which a producer is subcontracted by another producer or, more generally, a distributor to produce garments to the latter's precise specifications, with the fabric and designs being supplied by the distributor. It has gained importance in recent years but is largely limited to subcontracting between local distributors and micro and small enterprises (MSEs), rather than among exporting firms.10

Most of the larger firms in the textile and garment sub-sectors are less likely to be involved in any form of production linkage because of the high level of vertical integration in their production. Among the garment manufacturers, the more vertically integrated ones (such as Fashion Enterprises), which combine under one roof garment manufacturing, fabric processing and textile printers and dyers, have had more success in processing their export orders. This is because they have better control of their stocks, quality of fabric and delivery times than firms dependent on textile mills for all their raw materials.

Firms are also afraid that if they subcontract on a CMT basis to a competitor, they may in the process lose their market to the competitor. Moreover, the non-exporting firm has no incentive to support an exporter because it will not share the export incentive. The compensation for this must, therefore, be an attractive price for the CMT. Two garment manufacturers confirmed that they have engaged in CMT business when the price offered for subcontracting was attractive.

Human resources and development of skills

Most of the general skills required in both the textile mills and garment manufacturers are obtained internally within the firms. The companies have adopted aggressive training programmes and retain their skilled personnel for as long as possible. In addition to in-house training programmes, promising middle-level personnel are often sent abroad on secondment and for formal training. Taking advantage of its overseas connections, David Whitehead has sent most of its high-level people to obtain the Higher National Diploma in Textiles in Lancaster in the UK

One Bulawayo-based company, Cotton Printers, prides itself on recruiting graduates of the Textile Designing Department of the Bulawayo Technical College. At higher levels the textile mills recruit people with basic skills such as loom mechanics and chemical and electrical engineers. These receive in-house training to become textile specialists. They are often sent for specialized training in South Africa, the UK and other countries. At the management and supervisory levels companies make use of training opportunities provided by the Institute of Management.

In general, the skilled workers required by the clothing sub-sector are designers, pattern makers, cutters and machinists. These core skills are complemented by experienced supervisors and middle and senior management personnel. Skill development is mainly by in-house training. Recruits with either 'O' or 'A' level qualifications are taken on at the lowest levels and are given routine tasks before being trained to perform tasks in all sections of the firm starting. Middle and senior management positions have often been filled by people who started from the lower echelons of the shop floor. There were exceptions to this rule in the past, especially before independence when middle and senior positions were filled by personnel recruited overseas, often people with family connections.

Since the early 1980s this source of recruitment has almost dried up and a shortage of well-trained people at middle and senior levels has become a serious problem. A major problem facing the clothing industry is inappropriate training. The current training undertaken at local public and private colleges does not produce suitable candidates for the industry. These colleges do not use the standard industrial machines employed by firms, a situation that results in college graduates arriving at factories without experience in handling state-of-the-art machinery and equipment.

In order to fill this gap, the Zimbabwe Clothing Council (ZCC) is in the process of setting up a training school for the clothing sub-sector which will complement training at the factory level and provide further sophisticated training for the sub-sector. The new school will concentrate on providing appropriate training in project management, designing and maintenance.