South Africa in 2000 – a year in review
In its ‘state of the industry’ report for the year 2000, the South African Council of Tanners paints a picture of an industry struggling to come to terms with the continuing decline of the domestic footwear manufacturing sector, and overcapacity in its second main market of the automotive sector.
While the country’s footwear manufacturer sector continued to decline, demand from the leather trade’s other major market – the automotive sector – showed signs of levelling out. Though demand from the automotive sector remained strong, overcapacity within the industry meant prices for hides remained depressed.
South Africa’s footwear production declined by another 8% in 2000, continuing the trend that had already seen domestic output drop below the level of imports (both legal and illegal). Of those still producing, most were considering importing instead.
The removal of the temporary import quota on footwear from non-WTO countries (for which read ‘China’) was also seen as having worsened the situation, causing panic among the trades unions, whose support pact with the government appeared more fragile than ever.
At the end of the year, the last significant leather producer consolidated its production and down-sized to approximately half is size (in output terms) of three years before.
In the automotive sector, demand generally remained stable with four large tanneries supplying an average of 10,000 finished hides daily to country’s car plants. However, the spectre of overcapacity was never far away, with the result that downward pressure on prices remained constant, and manufacturers were allowed to become more selective about who they dealt with.
Raw material exports, mainly to Türkiye and Italy continued unfettered, the main export items being sheepskins, lower grade wet blue and hand flayed dry salted hides. Despite its problems, the South African leather trade managed to end the year on an optimistic note, with the signing of the African Growth and Opportunity Act (AGOA) by the outgoing US President, Bill Clinton, bringing the promise of much greater access to the US market for South African-produced footwear and clothing.
