Africa’s inspired apparel sourcing hotspot

Employment, wages & working conditions

The combined, textile, apparel and footwear manufacturing industry remains Lesotho’s largest formal private sector employer – employing around 46 500 workers. Its current employment is below its early-2003 peak of about 54 000 workers. The industry suffered large declines in employment in the period after the phase-out of the Multi-Fibre Arrangement (MFA); and, in the aftermath the 2008 global financial crisis. As with other garment industries about 82% of all industry jobs are occupied by women.

The contribution of the industry to Lesotho’s economy goes beyond the sector itself – there are important employment and economic multipliers. A range of formal/informal sector activities occur that feed into/off the industry, e.g. a small packaging industry, road freight transporters, courier services, clearing agents, security, passenger transport, traders that sell food to workers, residential accommodation, water, electrical and telecommunication utilities, etc.

The wages earned by employees engaged in Lesotho’s textiles, apparel and footwear industry are of vital importance to Lesotho’s economy. It is estimated that sector production workers alone could collectively earn basic wages of about US$50m per annum – incomes would be higher taking into account that some firms pay wages above the minimums (e.g. to workers with special skills; and, for over-time payments).

With effect from April 2016 skilled garment workers are paid a monthly minimum wage of about US$94, and an unskilled worker’s monthly minimum wage would be approximately US$86.

Lesotho’s labour laws enshrine all aspects of the ILO’s core conventions (no child or forced labour; non-discrimination; freedom of association), regulate maximum working hours (45 normal & 11 hours overtime per week); and guarantee minimum paid leave.

While the application of Lesotho’s labour laws is regulated by the inspectorate of the Lesotho Ministry of Employment & Labour, many retailers/brands (including Levi Strauss, The Children’s Place, the Gap, etc) that source garments from Lesotho also monitor factory conditions in their Lesotho vendors. Recently (in 2016) a donor driven ILO programme “Betterwork Lesotho” wrapped-up an eight year programme involving factory compliance with the local and global standards. Currently six Lesotho factories (all US exporters) have Worldwide Responsible Apparel Production accreditation.

Sub sectoral value chain producers – firms, jobs & production volumes

	Firms	Jobs	Approximate Units of Basic Garments Produced Per Annum
Textile	1	1 220	Yarn - 18 000t Fabric – 15.6m linear meters
Denim (woven bottoms)	9	13 124	23 304 000
Non–denim Woven Fashion	4	1 580	6 360 000
Industrial Workwear	6	4 696	11 003 800
Knit Garments	33	24 513	115 143 600
Footwear	2	1 253	7 200 000 pairs
Supporting Industry	11	218	-
TOTAL	66	46 604	155 811 400 (typical clothing units) 7 200 000 (pairs of typical shoes)

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Source: Lesotho’s textiles, apparel and footwear manufacturing industry (2017)

Textile manufacturing in Lesotho

Lesotho has a single vertically integrated spin-yarn dye-weave textile mill that specialises in the manufacture of denim fabrics. Formosa Textiles (headquartered in Taipei; established in 2004; current employment about 1 200 people) sources cotton lint (in 2015 105 000 bales) from a range of Southern African countries including: Zimbabwe, Zambia, South Africa, Mozambique and Malawi. It uses this cotton to make about 700t of open end (OE) yarns per month (typical counts 6-12Ne), and 800t per month of ring spun (RS) yarns (generally 40% combed; 60% carded; with an average count of 25Ne (it does make blended yarns).

100% of the OE yarns are utilised in-house to make denim fabrics; 30% of the RS yarns are used in-house and 70% are sold in South Africa (mainly), Swaziland and Mauritius. Much of the fabric (typically the plant makes about 1.3m yards per month; 40% are 8-10oz fabrics; 60% are 13oz fabrics) is used by the parent company’s related jeans manufacturing operations that are located in Maseru. Limited quantities of fabrics are sold in the Southern Africa marketplace. Formosa has the space to install additional spinning equipment and looms.

Denim jeans manufacturing in Lesotho

Lesotho’s jeans manufacturers make approximately 23.3m pairs of typical (average styled) jeans a year (9 firms employing about 13 100 workers).

The industry is dominated by the Nien Hsing corporation’s three garment plants. The Nien Hsing group also owns Formosa Textiles which makes denim textiles in Lesotho. These garment plants export >98% of their production to North America – mainly to the United States, but limited volumes also enter Canada. The plants make jeans for well-known brands such as: Levis Strauss, the VF Corporation (Lee and Wrangler); and, The Children’s Place – two of the plants are accredited Gap Inc. suppliers.

The remaining jeans manufacturers concentrate on supplying the South African market place. The largest of these is the CGM group (comprising two manufacturing units). For four of these South African orientated plants wet finishing is not undertaken in Lesotho due to the fact that there are no publicly accessible effluent treatment plants that can reprocess denim water wastes. From time to time some of these plants also make limited volumes of cargo pants, chinos and industrial workwear.

Most of the jeans orders are managed via the brands/retailers themselves.

Woven garments manufacturing in Lesotho (non-denim; non-workwear)

There are four Lesotho garment plants which specialise in making woven garments – that do not fall into the categories of denims or workwear. One firm makes higher end garments destined for two of South Africa’s premium apparel retailers; another two only make shirts typically worn by school students in Southern Africa. The owners of all of these plants, all headquartered in South Africa, collectively make approximately 6.3m clothing units per annum; and they employ about 1 580 workers.

It must be noted that a number of Lesotho’s traditional knit garment manufacturers occasionally make limited amounts of woven workwear (e.g. Shinning Century, CMT Trading, Leo Garments). Long River has the ability to make knit garments too.

Knit garments manufacturing in Lesotho

The Lesotho knit garment industry is the largest component of Lesotho’s apparel industry – with 33 firms currently employing approximately 24 500 workers. This employment is set to grow as newly established manufacturing enterprises are scaling up their production. A diverse range of products are made. From commodity cotton t-shirts, dresses, tracksuits, through to sportswear,

12 firms (employing approximately 6 200 workers) concentrate on supplying the South African market place. Most of these orders are given to Lesotho plants by a number of garment design/sourcing houses based in (mainly) Durban or Cape Town; only a limited number of orders are given directly by the Southern African retailers.

21 firms (employing about 18 600 workers) focus on the United States’ (US) market place. US orders are generally secured via sourcing agents based in the east (mainly Taiwan). An important feature of the knit garment manufacturing industry focused on the US market is that there is a core of firms that are able to secure orders from the agents – should they have excess orders they share this production with a number of plants (who have Asian origin owners) that only undertake CMT work.

In the past five years there has been a significant shift away from producing cotton knit garments for export to the US; now many firms tend to concentrate on making commodity garments whose fabrics are mainly composed of man-made fabrics (i.e. chief value synthetic – “CVS”). The reason for this switch is that CVS type garments typically attract US Most Favoured Nation (MFN) customs duties of between 25-35%; as opposed to cotton commodity type garments whose US MFN duties are much lower.

Many of the US orientated knit garment manufacturers have in-house laundry and embroidery facilities (e.g. Tai Tuan/J&S Fashions, Lesotho Precious Garments, Shinning Century and TZICC). Six knit garment manufacturers have obtained Worldwide Responsible Accredited Production (WRAP – Eclat Evergood, Hippo Knitting, Lesotho Precious Garments, Supper Knitting, Tai Yuan and TZICC) certification.

Two of Lesotho’s knit garment manufacturers are directly connected to textile (spin/knit/dye) manufacturing operations located in South Africa – Basotho Leisurewear (linked to Tradelink Industries – a vertically integrated knit fabric mill located in South Africa’s Western Cape province), and Fantastic Clothing (linked to Tai Yuen – a spin-knit-dye fabric mill based in South Africa’s KwaZulu-Natal province).

It must be noted that some of the predominantly knit garment manufacturers are versatile enough to undertake the production of woven garments (e.g. CMT Trading, Leo Garments, Shinning Century), while some of the woven manufacturers do undertake knit garment manufacture (e.g. Jonsson Manufacturing, Long River Garments, Middle Sky Lesotho, etc).

Industrial workwear manufacturing in Lesotho

The Lesotho industry currently comprises six firms that collectively employ about 4 700 workers; who make about 11m units of workwear per annum.

The workwear produced in Lesotho is typically used by workers in the mining, agricultural and manufacturing; and some retail operations. For example: one/two piece overalls/boiler suits, hi-visibility products, freezer-wear; as well as products used by fast food restaurant staff, retail store assistants, etc).

Aside from two small producers that focus on supplying the domestic Lesotho workwear market, most of the firms concentrate on supplying the South(ern) Africa marketplace. Jonsson Manufacturing employs 2 800 people and is a fully supported by a substantial in-house design centre which develops Jonsson’s branded products. Jonsson’s exports mainly into South Africa, but to a number of destinations within Southern and Eastern Africa; as well as into Australia.

Footwear manufacturing in Lesotho

Lesotho’s footwear industry currently consists of two footwear manufacturers; industry employment is approximately 1 253; and these firms produce about 7.2m pairs of (typical) shoes a year. Jaguar Shoes (formally “Springfield Footwear” used to make branded pool sandals for Puma – until Puma decided to exit this market niche) is now establishing itself with other retailers and scaling up production.

Lesotho’s textile-clothing-footwear industry support firms

The garment industry is supported by: two commission embroidery firms and two commission garment screen-printers; a limited packaging industry exists (two firms make corrugated cartons for garment exporters); and one coat hanger factory makes hangers for garments destined to be exported to the US. There are no commission laundries (although some firms have their own in-house laundries which can be rented), garment dye facilities, garment label printers, zip manufacturers, thread dye firms, etc. Most garment trims are imported into the country – from South Africa and the East.

This synopsis publication was shared by Mark S Bennett, Advisor in the Lesotho Ministry of Trade and Industry, at tralac’s 2017 Annual Conference on 6-7 April in Cape Town.

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