South Africa's garment workers fight for survival as factories embrace homegrown manufactu

SOUTH AFRICA’S MANUFACTURING REVIVAL: WHY LOCAL PRODUCTION MATTERS FOR JOBS AND COMMUNITIES

The clothing industry in South Africa tells a stark story. In 2000, about 200,000 formal workers stitched garments in factories across the country. Today that number has collapsed to roughly 75,000. Imports decimated the sector, but Irshaad Kathrada, CEO of the Localisation Support Fund, believes the potential to rebuild remains substantial and largely untapped.

Kathrada and his team at the LSF have identified a concrete opportunity: approximately 81 million garments worth about R8 billion in annual production could be sourced locally. Retailers have already signaled interest in specific categories. Denim demand is growing in South Africa. Athleisure is expanding rapidly. These are not abstract market trends. They represent real production runs that could employ people in factories and supply chain roles across the country.

The mechanics of localisation are straightforward in principle but require careful execution. The LSF works with major retailers and fast-moving consumer goods companies to map their current procurement patterns, then approaches local manufacturers with concrete demand signals. The goal is to match what businesses actually need with what South African producers can supply at competitive cost and quality. Kathrada is clear that this cannot work through mandate alone. If local goods cost significantly more, arrive late, or fail to meet quality standards, no company will sustain the switch. Businesses need localisation to solve real problems: faster delivery times, reduced inventory carrying costs, and the agility to respond when products succeed or fail with consumers.

Manufacturing creates economic ripples that extraction does not. Research shows that for every factory job created in South Africa, four additional jobs emerge throughout the broader economy. A manufacturing business requires accountants, engineers, marketing specialists, and supply chain professionals. It demands raw materials from upstream suppliers and generates demand for services and infrastructure downstream. Simply extracting resources and shipping them abroad, by contrast, generates few jobs beyond extraction itself.

This multiplier effect explains why Kathrada and others view a healthy manufacturing sector as foundational to economic growth. The pattern holds globally. South Korea, Germany, China, and India all built prosperity through coordinated manufacturing strategies, not by competing in every sector, but by identifying areas where they possessed genuine advantages and focusing resources there.

South Africa faces formidable competition. China alone has more than a billion people and financial resources that dwarf South Africa’s capacity. As a small country in global terms, South Africa cannot win through scale or spending power. Success requires coordination among government, private business, and manufacturers, with each sector understanding the others’ constraints and capabilities. Protective barriers have enabled growth in other small economies, but Kathrada stresses that collaboration offers a more sustainable path forward.

The journey that brought Kathrada to this work was personal and circuitous. He studied finance and economics at the University of Cape Town, then spent nine years at JPMorgan, mostly working abroad. He eventually felt pulled back to South Africa, wanting to apply what he had learned internationally to problems at home. He joined government, worked with then Department of Trade and Industry Minister Ebrahim Patel, and helped develop the early strategy for the Localisation Support Fund before becoming its CEO.

When asked why he returned when he could work almost anywhere, Kathrada rejected the assumption that opportunity lies only abroad. He describes South Africa as chaotic and complex, requiring patience, dedication, and careful navigation. The work, he argues, is necessary if the country is to reach its potential. South Africa possesses significant advantages: diverse agricultural climates suited to different food production and, by global standards, excellent education. When Kathrada entered JPMorgan alongside graduates from Cambridge, Oxford, and Harvard, he found his South African education competitive and in some respects superior. South Africans, he observes, bring practical problem-solving skills, work ethic, and lateral thinking to challenges.

The Localisation Support Fund was established in 2021 as a public benefit organisation through a partnership between the Department of Trade, Industry and Competition and Coca-Cola Beverages South Africa. It operates at the intersection of government and business, bringing manufacturers, buyers, and policymakers together to commission research and provide technical expertise that transforms localisation targets into viable projects. More information on the LSF’s approach and Kathrada’s thinking is available at https://explain.co.za/2026/08/25/can-south-africa-make-things-again-irshaad-kathrada-thinks-so/.

The challenge ahead is substantial. Building sustainable local manufacturing requires not just identifying demand but ensuring that local producers can meet it consistently and cost-competitively. In the short term, businesses may accept slightly higher prices as local manufacturers build economies of scale, and as production volumes increase, costs typically decline. But that transition period demands patience from retailers, investment from manufacturers, and coordination from policymakers. The potential to rebuild sectors like clothing and create thousands of jobs in the process is real and measurable. Whether South Africa can sustain the commitment long enough to get there is the question that will define the next decade of the country’s industrial story.