The South African digital printing sector has struggled over the past few years to compete with the lower prices of textile manufacturers in Asia, while the Covid-19 pandemic has hit the sector hard. But for the companies that have survived the disruption, business is getting back to normal, with the post Covid-19 localisation trend of shorter supply chains giving orders a boost.
“Local sales have taken a beating the last few years, and there are only half a dozen larger players. There is no real export market as we’re are not able to compete with the likes of China. We don’t have the capacity, equipment or manpower,” says Craig Whyte, CEO of ArtLab in Cape Town, which does small digital print runs of around 2,000 metres.
“Agents for Chinese companies are offering US$1 a metre, but how the hell can we install a US$368,000 machine, run it, print it, and wash it at a dollar a metre? We can’t do it,” he adds.
Depending on the fabrics and volumes, digital print runs in South Africa typically cost around US$5.21-US$18.40 and over per metre, he says, although Digital Fabric Solutions – part of Star Trimming and Textiles in Durban – has more machines and capacity and is able to produce at US$3-US$7.30 per metre.
This cost differential has meant South Africa’s textile & garment sector, including its finishing portion, has declined over the past decade, with manufacturing costs higher than in Northern Africa or Asia, with the minimum monthly wage being the equivalent of US$214. Digital printers especially have struggled to get work in what has been a weak economy (GDP was up just 1.5% in 2019) with local retailers and brands sceptical about the value of sourcing locally.
Obviously, with the South African economy reeling from the Covid-19 pandemic as a result of a strict lockdown imposed by the nation’s government, digital textile finishers in the country have found life especially tough this year.
However, “many textile and garment companies were already struggling prior to the pandemic,” says Remo Gorlei, owner of Imaterial rotary and digital printers in Cape Town, which has two digital textile printers from MS Printing Solutions, traditional rotary machines, and padding and fabric printing machines. Imaterial has print runs of over 10,000 metres and plans to acquire two new Italian printing machines if there is an uptick in business.
“Cheap rip-off imports have been our biggest threat,” says Gorlei. “Some potential clients still order their digital prints from Europe and Asia as they don’t realise that we have the same equipment and technology, if not better than some of the digital houses they are using abroad.”
And while local digital textile printing competition had been increasing, many of the smaller printers, mainly doing sublimation printing, have not survived the pandemic, says Whyte: “A lot of companies have hit the wall.”
South Africa’s strict lockdown shuttered factories for two months through stay-at-home measures from March, with restrictions gradually easing by August. But despite the easing of these restrictions in the summer, it was still unviable for many print houses to reopen commercially. In total, the sector was shut down for over three months.
The economy has taken a serious hit in 2020. GDP is forecast to contract by 7%, according to South African Reserve Bank figures, and more than two million South Africans have lost their jobs which brings the official unemployment rate to an eye watering 42%.
During the first months of the lockdown, big chain stores and smaller outlets cancelled orders. “Post lockdown, the industry has been slow to start up again,” says Gorlei. “Our industry will only succeed if local companies are supported over imports.”
Smaller clothing and fashion companies have also suffered, which had been a mainstay for smaller digital print runs: “We deal a lot with independent designers and stores, and they’ve had no income for months,” says Whyte.
To spur sales, ArtLab is slashing prices by half for the last few months of the year. “We have to do something to stimulate the textile side as it is a depressed market,” he adds. “We are trying for quicker turnarounds and medium runs. We are relatively busy, with a good turnover, but others out there are starving.”
Digital Fabric Solutions (DFS) recently upgraded its European and Asian machinery to gain market share, with print runs of 100-15,000 metres: “It is a growing industry but it’s a matter of increasing the customer base,” says Reshma Harilall, DFS marketing manager.
The company prints for leading South African chain stores and retailers. Moreover, one benefit of the pandemic has been the pandemic’s impact on logistics – international flights only re-started in October: “Customers cannot get orders from abroad, so they are sampling local production,” says Harilall. “We forecast an increase in business, sourcing local digital printers in the long-term.”
DFS is trying to secure more market share through emphasising the advantages of local production. The government is also promoting local production through a campaign: ‘Local is lekker’ meaning local is good in Afrikaans.
“We can get a bulk order out in three or four weeks, compared to six weeks from abroad. We can also do top-up orders for just-in-time deliveries,” says Harilall. Half of DFS’ print runs are man-made fibres; the rest is cotton.
Sportswear and babywear are doing particularly well, as is home décor. There are also bespoke orders. “People want to produce their own ranges of clothing,” says Harilall.
Gorlei notes a similar trend in his orders. “About half of our digital prints are based on South African themed designs, such as prints of our ‘fynbos’ flora, which is especially unique to the Western Cape,” he says. Such sales are highest in trendier Cape Town, where the country’s fashion sector is primarily based, followed by the country’s largest city, Johannesburg, and the third largest, Durban, says Harilall. Exports of local fashion are increasing too: “We have customers that sell overseas, in New York and London,” Harilall adds. “This is a growing segment.”
While the sector has experienced a V-shaped recovery, the sector is facing pricing challenges due to the depreciation of the Rand this year against the US dollar and Euro. This has impacted the potential to cater to fast fashion, explains Gorlei. “The pricing is still too high, despite our machines being capable of producing large bulk runs, as we have to buy inks at European prices,” he says. “Maintenance is also very costly, with a new quality print head costing €5,000-€8,000, and we have to add airfreight and duties. Unless you have a spare in stock, you could lose a few weeks in production.”
