Sanjay Pattundeen - SAFLEC Chairman

Sanjay Pattundeen
SAFLEC Chairman

It’s my pleasure to welcome you all to SAFLEC’s annual general meeting. It is the first AGM using this virtual format. We hosted great events previously and the feedback was always positive and encouraging. Members always looked forward to the interaction and catching up with colleagues. However, under the COVID-19 circumstances this is the best way to have the AGM.  Great turnout – thank you for making time. Your presence is most valued and appreciated.

SAFLEC’s main aim is to facilitate growing of exports in Footwear, bag and leather goods sector. Through continuous interaction with various stakeholders, we are able to develop and enhance our export promotion strategy. SAFLEC is without doubt a significant, serious, credible and noteworthy organization, representing a large number of footwear, handbag, belts and related manufacturing companies.

As per export data obtained, Africa is still our major export destination. These exports are made up predominantly of safety footwear, and school shoes. The high level export figures are:

Details are in the AGM report.

SAFLEC is increasing its focus on Africa. Lots of research has been done and some valuable information has been compiled. This AU economic integration process has identified the leather and related value chain products as one of the initial focus areas. It certainly looks promising for SA manufacturers.

Since 2018, there has been a decline in the volume and value of exports to Africa, non BLNS regions. The drop noted in June of last year was largely due to infringement of safety footwear sector’s intellectual property rights by Chinese manufacturers who had opened in Africa and were selling their product up to 50% less to their customers in Africa. This sabotaged the efforts that were being made in other regions to a great extent.

South Africa nevertheless has an opportunity to acquire a bigger part of the exports into AFRICA. We are in the process of enhancing our export endeavors into this huge market. Amongst other we are prioritizing the following:

  • Encouraging retailers to buy more for their African stores.
  • Assessing the fact that Africa is largely informal in this sector with limited retailers aside from South Africa.
  • Assisting manufacturers to be ahead of the game in the design and collection building for the African market.
  • Sharing competitive intelligence with other members.
  • Creating groupings (Africa Clusters) who are currently investigating opening distribution warehouses in Africa to feed the informal market.
  • Attending to foreign retailer’s compliance requirements.
  • Participating with numerous organisations (eg. WESGRO, TIKZN) that exhibit / fund exhibitions in the African Continent.

Asia, Europe and North America have different trade agreements which require a somewhat different approach and cannot be overlooked. We focus on:

  • Ensuring we are on trend with this sectors fashions and seasons.
  • Engaging international world expert trends analysists to upskill our local manufacturers. (Arsutoria Seminar’s)
  • Pre-event market intelligence.
  • Country (or region) specific compliance requirements are shared with members.
  • Inward buying missions to allow international buyers to see for themselves SA’s infra-structure and our manufacturers capabilities.
  • Negotiating with shipping lines to support the export flow more efficiently and at preferential rates.
  • Ensure the efficiency of the factories and to make sure that they are ready and prepared for international buyer inspection.
  • Liaise with the Local Clusters and National cluster to support and grow skills within the sector.
  • Continue making International buyer list available to members
  • Encourage the Component Cluster through the sector desk to manufacture components that fill the supply chain gap in the industry.

Currently, due to Covid 19, SA has lost almost 6 months in the Global exhibition platforms. We endeavor to achieve a target of 7% (as per TISA directive) increase in sales, subject to possible global economic downturns beyond our control.

We are currently working on:

  • an interactive virtual showroom to showcase our manufacturers and their products to the world.
  •  E-commerce partnerships like USA Amazon
  •  Virtual outward selling missions showcasing videos or factory capabilities, technology and products, coupled with B2B interactions with our worldwide DTI Offices and Embassies.

The manufacturing industry is relatively stable. Manufacturing has become highly efficient over the last decade, with the ability to maximize both the productivity of the workers and machines. South Africa has world-class infrastructure. It is also actively involved in the development and roll-out of new green technologies. Government support for the industry is growing. 3 key associations, SAFLEC, SAFLIA and FLIC are here to assist in taking the industry forward in all areas. Our minds need to be applied so that the 3 associations are optimally functioning for best outcomes for members. A key objective of SAFLEC in the coming year will be to engage with relevant stakeholders to find the best solutions. Let us aggressively pursue the MOTTO “TOGETHER WE ARE STRONGER”. Costs can be understandably high. However, this is a medium to long term investment. Efforts to minimise costs are key and SAFLEC is continuously exploring means to minimise costs and maximise return on Investment.

Government
Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Financials
Marwick & Co were the auditors again for the March 2020 financial year end. They were satisfied with the audits. On behalf of the board I thank Prenisha who has prepared her first full year of compiling the accounting function meticulously. The detailed audited financials are available. The summarised financial situation is in the AGM report. I will go through them later. The board is satisfied with the income and expenses.

Staff
Nerisha Jairaj, the Executive Director of SAFLEC has been the driving force. Her contribution and performance has yet again been outstanding. During the COVID 19 lockdown she did not stop networking and applying her mind to fulfil her role. On behalf of the board and SAFLEC members I thank Nerisha. With continued support from the Board and SAFLEC’s members, Nerisha will ensure all aims and objectives are met with certainty. Thanks to Priya who drives the eThekwini funded programmes. These programmes as you are aware is for upskilling members. Appreciation to Sarah, Nerisha’s PA who I can say makes Nerisha as good as she is.

Conclusion
It has been a very rewarding experience to serve as chairman of the SAFLEC board. I sincerely thank my fellow board members for all your contributions, for attending meetings and helping drive SAFLEC to successfully meet its objective. To the new board members congratulations and wish you well to take SAFLEC, to greater heights.

It’s my pleasure to welcome you all to SAFLEC’s annual general meeting. Great turnout – thank you for being here. Your presence is most valued and appreciated.

I am delighted to report that the organisation has achieved significant progress over the past 12 months. Not surprisingly the interest in wanting to participate in SAFLEC activities continue to increase. SAFLEC’s main aim is to facilitate growing of exports in Footwear, bag and leather goods sector. Through continuous interaction with various stakeholders, we are able to develop and enhance our export promotion strategy.

As a consequence of this progress, SAFLEC is without doubt a significant, serious, credible and noteworthy organization, representing a large number of footwear, handbag, belts and related manufacturing companies.

Exporting is never an easy task. Especially in a globally competitive industry like ours, however, SAFLEC continues export promotion activities, exposing members to many parts of the world. The SA footwear and Leather good manufacturing industry has been recognised as a stable industry with potential to be a growing global market player. The exhibition costs are understandably high. However, this is a medium to long term investment. Efforts to minimise costs are key and SAFLEC is continuously engaging with stakeholders (Government being the major one) to explore means to minimise costs and maximise return on investment.

Exports
The details are in the annual report. According to figures released by SARS, exports shrunk by 8% in 2018. Some due to the long strike in the industry. In addition, payment issues from Zimbabwe (our largest export destination) discouraged manufacturers to release goods. In attempting to analyse the data obtained from SARS too many inconsistencies surfaced. The integrity of the data is being investigated.

As per export data obtained, Africa is still our major export destination. SAFLEC is increasing its focus on Africa. Lots of research has been done and some valuable information has been compiled. In addition, an industrialisation programme for SADC region is being formulated by Government with participating countries showing keen interest. This regional economic integration process has identified the leather and related value chain products as one of the initial focus areas. It certainly looks promising for SA manufacturers.

Capacity Building
SAFLEC encourages SMME’s to be part of its export initiatives. This is Governments key focus area and they are pushing for us to involve SMME’s. We are persevering, networking and partnering with many institutions to create educational platforms, especially for SMME’s to prepare to deal in the international arena. The Arsutoria workshop is an example. This provided valuable trend information and was hugely successful. Dear members, we urge you to come forth, and participate in similar initiatives. There are competent staff members at SAFLEC, who will be ever so willing to assist.

Our industry is fairly structured and formalised. 3 key associations, SAFLEC, SAFLIA and FLIC are here to assist in taking the industry forward in all areas. Our minds need to be applied so that the 3 associations are optimally functioning for best outcomes for members. A key objective of SAFLEC in the coming year will be to engage with relevant stakeholders to find the best solutions.

eThekwini Saflec Project
The formalisation of this project was concluded in Dec 2018 where the Economic Development and Planning Committee of the eThekwini region agreed to support the footwear and leather industries through targeted interventions stimulating growth and allowing the sector to increase their competitiveness, locally and internationally. SAFLEC is to manage the programmes for the 2018/19/20 &21 financial years.

Government
Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Financials
Marwick & Co were the auditors again for the March 2018 financial year end. They were satisfied with the audits. The detailed audited financials are available. The summarised financial situation is in the AGM report. I will go through them later. The board is satisfied with the income and expenses.

Staff
Nerisha Jairaj, the Executive Director of SAFLEC, has been the driving force. Her contribution and performance has once again been outstanding. On behalf of the board and SAFLEC members I thank Nerisha. With continued support from the Board and SAFLEC’s members, Nerisha will ensure all aims and objectives are met with certainty.

After more than 10 years of dedicated service to SAFLEC and the Industry, sadly, we bid farewell to a very dedicated staff member of SAFLEC, as she moved into retirement at the end of May 2019. SAFLEC’s, Louise Pelser has stood the test of time and she leaves a mark of her efforts to help build our industry and exports. We wish her well in her retirement and she will be sorely missed by our team here at SAFLEC.

Prenisha Dukhipersad, who has dedicatedly served as the PA to Executive Director, has taken over Louise’s duties from 1 May 2019. Prenisha has a B.Com degree and the board is confident she will perform the administrative and financial function well. Sarah Thambiran is the newly appointed PA to the Executive Director. SAFLEC thanks you for your kind patience during this transition.

Conclusion
It has been a very rewarding experience to serve as chairman of the SAFLEC board I sincerely thank my fellow board members for all your contributions, for attending meetings and helping drive SAFLEC to successfully meet its objective. To the new board members congratulations and wish you well to take SAFLEC, to greater heights.

Not surprisingly the interest in wanting to participate in SAFLEC activities continue to increase. SAFLEC’s main aim is to facilitate growing of exports in Footwear, bag and leather goods sector. Through continuous interaction with various stakeholders, we are able to develop and enhance our export promotion strategy.

Exports grew by 13% in 2017, from 4.31m pairs to 4.88m pairs in 2017. FOB prices were down by 4.5%, hence export FOB value only increased by 7.9%. Africa is by far the largest export destination. Zambia portion is just under 50% of total exports. The interpretation of data, especially to BLNS region is still being finalised. SAFLEC is engaging with retailers to assist with the breakdown of footwear exported in this region. The final analysis will be shared with members once completed.

SAFLEC continues export promotion activities, exposing members to many parts of the world. The SA footwear and Leather good manufacturing industry has been recognised as a stable industry with potential to be a growing global market player. The exhibition costs are understandably high. However this is a medium to long term investment. Efforts to minimise costs are key and SAFLEC is continuously engaging with stakeholders (Government being the Major one) to explore means to minimise costs and maximum return on Investment.

SAFLECS continued presence at International trade shows and Events and the recent attendance by executive director Nerisha together with many Industry Captains, to the World Footwear Congress in Portugal has resulted in a request for SA to host the World Footwear Congress in 2022. This is great news!
AS pert actual export data, Africa is still our major export destination. SAFLEC is increasing its focus on Africa. Lots of research has been done and some valuable information has been compiled. In addition an industrialisation programme for SADC region is being formulated by Government with participating countries showing keen interest. This regional economic integration process has identified the leather and related value chain products as one of the initial focus areas. It certainly looks promising for SA manufacturers.

Earlier this year, SAFLEC hosted the first fully funded Inward Buying Mission, consisting of buyers USA. This mission was a two way learning session. Their expectation was far exceeded by what they saw. IBM are quite a cost effective manner to expose SA manufacturers. SAFLEC will be exploring more IBM.

SAFLEC encourages SMME’s to be part of the export initiatives. This is Governments key focus area and they are pushing us to involve SMME’s. We are persevering, networking and partnering with many institutions to create educational platforms, especially for SMME’s to prepare to deal in the international arena. The recent ARSUTORIA workshops, as an example, provided valuable information and was hugely successful. Dear members we urge you to come forth, and participate in SAFLEC’s initiatives. There are competent staff members at SAFLEC, who will be ever so willing to assist.

Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Marwick & Co were the auditors again for the March 2017 financial year end. They were satisfied with the audits. The detailed audited financials are available. The summarised financial situation is in the AGM report. The board is satisfied with the income and expenses.

Nerisha Jairaj the Executive Director of SAFLEC has been the driving force. Her contribution and performance has been outstanding. On behalf of the board and SAFLEC members I thank Nerisha. With continued support from the Board and SAFLEC’s members, Nerisha will ensure all aims and objectives are met with certainty. Prenisha, the PA to our Executive Director has also done a sterling job.

In conclusion, a huge thanks you to Louise who efficiently and ever willingly executes the financial and administration functions of SAFLEC. The Board appreciates your contribution.

It has been a very rewarding experience to serve as chairman of the SAFLEC board. I sincerely thank my fellow board members for all your contributions, for attending meetings and helping drive SAFLEC to successfully meet its objective. To the new board members congratulations and wish you well to take SAFLEC, to greater heights.

Not surprisingly the interest in wanting to participate in SAFLEC activities continues to increase. SAFLEC’s main aim is to facilitate growing of Footwear Exports. However we did have an ever increasing interest from the bag and other leather goods manufacturers. Through continuous interaction with various stakeholders, we are able to develop and enhance our export promotion strategy.

Local pairs manufactured continued its upward trend in 2016. Indications are this will continue in 2017. This is encouraging seeing we are operating in an economically challenged environment. This can be attributed to local retailer’s appetite to buy more local. Adding to this, exports grew by 27% in 2016! Unfortunately, due to technicalities and interpretation in statistics it is difficult to do a comparison and trend analysis over last 5 years. Going forward, we will be using 2015 as the base year. Let’s watch this space for 2017 export figures.

SAFLEC encourages SMME’s to be part of the export initiatives. This is Governments key focus area and they are pushing us to involve SMME’s. We are persevering, networking and partnering with many institutions to create educational platforms, especially for SMMe’s to prepare to deal in the international arena. Dear members we urge you to come forth. There are competent staff members at SAFLEC, who will be ever so willing to assist.

SAFLEC has been around for more than a decade, experienced a period of no activity, and revived 6 odd years ago. Soon thereafter we became more independent – moved into own offices with our own staff, led by our own very capable executive director, Nerisha. Efforts were focused in Africa, while intelligence was gathered in the rest of the world. In a short space of time, the SA manufacturing industries were present in the many most important international exhibitions outside Africa, – Dubai, Moscow, Italy, Turkey, UK, Germany, Tokyo, USA, and Australia later this year. Safe to say all continents have been covered. You would have been updated periodically via SAFLEC NEWSFLASH. More details are in the AGM reports.

Exporting to USA and most European destinations is not an overnight accomplishment. It does indeed take effort and perseverance. Nerisha has yet again displayed her talented networking skills. Numerous contacts have been made with important footwear organisations throughout the world. The SA government embassies and FER’s are also actively communicating and assisting with the networking process.

Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Marwick & Co were the auditors again for the March 2016 financial year end. They were satisfied with the audits. The detailed audited financials are available. The summarised financial situation is in the AGM report. The board is satisfied with the income and expenses.

Nerisha Jairaj the Executive Director of SAFLEC has been the driving force. Her contribution and performance has been outstanding. On behalf of the board and SAFLEC members I thank Nerisha. With continued support from the Board and SAFLEC’s members, Nerisha will ensure all aims and objectives are met with certainty. Prenisha, the PA to our Executive Director has also done a sterling job. She has been working on contract and as at January this year a permanent employment contract was finalised.

In conclusion, a huge thank you to Louise who efficiently and ever willingly executes the financial and administration functions of SAFLEC. The Board appreciates your contribution.

It has been a very rewarding experience to serve as chairman of the SAFLEC board. I sincerely thank my fellow board members for all your contributions, for attending meetings and helping drive SAFLEC to successfully meet its objective. To the new board members congratulations and wish you well to take SAFLEC, to greater heights.

Each year just gets busier than the previous. This year was no exception. In fact, SAFLEC has exposed its members to Europe, USA and Middle East. The move to new offices in Westville was completed, and everyone is settled. With the increase in activities, it was necessary to employ an additional staff member. A warm welcome to Prenisha, who I am sure many of you are aware of and spoken to or have received one of her many e-mails. With regards our new offices, if you have not already done so, please make an effort to visit. Nerisha, Louise or Prenisha will happily receive you. Not surprisingly the interest in wanting to participate in SAFLEC activities continues to increase. SAFLEC’s main aim is to facilitate growing of Footwear and Leather Exports and through continuous interaction with various stakeholders, we continue to develop and enhance our export promotion strategy. While we have presented ourselves in Europe and USA and other non-African countries, Africa remains the largest export destination.

There are some concerns regarding export figures. We continue to work closely with SARS in this regard. With considerable effort the relevant export information had to be re-analised and recalculated. Interestingly Botswana, Lesotho, Namibia and Swaziland, (BLNS Region), is part of the export figures. SA national chains have outlets in this region. Goods sent from these chains are recorded as exports. The challenge is what percentage is SA manufactured and what percentage is imported and sent across the borders. Unfortunately,
with a different approach to the compilations this year, comparing with previous years may be inaccurate.

The Trade Exhibition to Las Vegas early this year was a very fruitful one. We are aware that exporting to USA and most European destinations is not an overnight accomplishment. It will however take continuous effort and perseverance to achieve desired goals. In this regard Nerisha has yet again displayed her talented networking skills. You would have been updated on the status via SAFLEC NEWSFLASH.

REPORT BY THE CHAIRMAN

Numerous contacts have been made with important footwear organisations in the USA. The SA government embassies, and FER’s are also actively communicating and assisting with the networking process. Among the many positive outcomes, I must mention FDRA, which is the Footwear, Distributors and Retailers Association in the USA.

This association represents mostly, if not all, the major retailers and distributors in the USA. The FDRA Board members are the Presidents and CEO’s of major companies to who SAFLEC exposed the SA manufacturing industry. In May 2016, Nerisha attended the FDRA’s conference held in Washington. With more networking, SA has been further exposed. We hope to sooner rather than later have the first inward buying mission from the USA.

The SA Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Marwick & Co were the auditors for the March 2016 financial year end. The approved detailed audited financials are available. The summarised financial situation is in the AGM report. The board is satisfied with the income and expenses.

The large surplus reflected in the financials is as a result of the DTI funding that was paid into our account in the 2016 financial year, although the contra expense was incurred in 2015 financial year end. Hence the deficit in 2015, and large surplus in 2016.

It is almost 2 years that Nerisha Jairaj has joined SAFLEC. Her contribution and performance has been outstanding. On behalf of the board and SAFLEC members I thank Nerisha. It was for this reason the board decided to promote her to Executive Director of SAFLEC. With continued support from the Board and SAFLEC’s members, Nerisha will ensure all aims and objectives are met with certainty.

In conclusion, a huge thanks you to Louise who efficiently and ever willingly executes the financial and administration functions of SAFLEC. The Board appreciates your contribution.

It has been a very rewarding experience to serve as Chairman of the SAFLEC board. I sincerely thank my fellow board members for all your contributions, for attending meetings and helping drive SAFLEC to successfully meet its objective. To the new board members, congratulations and I wish you well in taking SAFLEC to greater heights.

It has been yet another busy year for SAFLEC! From Exhibitions, to meetings with members of government, as well as finalising the process of making SAFLEC an independent business unit. The relocation to new offices in Westville, Durban was complete (it was sad to part company with SAFLIA). Please make an effort to visit the new office. Nerisha and Louise will happily receive you.

I feel it’s appropriate and as a mark of respect to mention that we are deeply saddened by the passing away of two dear members, Zane Zwart and Dave Bromfield. Zane from Ubergruvi was a respected member. Our thoughts and prayers are with Milton, Ashley and the rest of the Zwart family.  Dave Bromfield was a director of APECO and a Director on SAFLEC Board. Dave had dedicated over 40 years to the industry and had been a pillar of strength and knowledge to SAFLEC, its Board and staff.  SAFLEC expresses our deepest condolences to Dave’s wife, Morag and their two children.

May GOD give the Zwart and Bromfield families’ strength.

There has been renewed and increased interest and participation in SAFLEC activities. We have also extended membership to include the bag and belt sector. A few of them joined the footwear manufacturers in several outward selling missions in the past year. SAFLEC’s main aim is to facilitate growing of Footwear Exports. Through continuous interaction with various stakeholders, we are able to develop and enhance our export promotion strategy. While we have presented ourselves in UK and Middle-East (and soon Russia in September 2015, and USA next February), Africa will continue being the primary focus area.

Exports grew from 3.2 m pairs to 4.03 m pairs, a 25% increase in pairs. Zimbabwe is still by far the largest export destination followed by Zambia. With more interest from South African manufacturers participating in export promotions, I am confident, the 2015 year will see an even higher percentage increase in exports, in both pairs and value.

In a DTI and Chinese government organised project, SAFLEC was asked to nominate prospective students from its members for a 90 day fully paid for course in design and manufacturing in China.

All names were taken through to a shortlisting process and 30 lucky students were sent to China for the course that began in June. We await some positive feedback on their return.

The DTI, Team Export South Africa conference was held between in June 2015 in Pretoria. SAFLEC had the opportunity to present challenges to Minister Rob Davies.  SAFLEC, was publically complimented for its efforts in the strides that it has made for its members and Footwear and Leather,

We are all aware of the various DTI funding available, including support for local exporting initiatives. SAFLEC plans and assists member to access these funding. On this note we are exploring engaging a full time person to tap into various funding available, not only for export promotion  but funding  to enhance capacity building in all disciplines of business.

As a matter of fact the DTI support for local manufacture is indeed such a good one our fellow SADC neighbours (Zimbabwe and Zambia) have engaged with us, enquiring about the processes and structures involved. In the long term the final outcome would be to contain most if not all footwear manufacturing in SADC region and ultimately in Africa. We need to engage and lobby Government, motivating them to see the value (especially in employment creation).

Government is an important partner to SAFLEC. As a Section 21 company and as a part of government requirements of export councils, SAFLEC has complied fully. All reports are submitted and the financials are fully audited.

Marwick & Co, were the auditors again for the March 2015 financial year end. They were satisfied with the audits.

It is almost a year since Nerisha Jairaj, the Executive Manager of SAFLEC, has been appointed. She settled in quite nicely and delivered. The board is quite pleased and certain that those that have worked with her agree. Nerisha is indeed a valuable asset to SAFLEC. She has engaged successfully with all stakeholders and ensured Saflec reached its goals.

Huge thanks to you as well Louise who efficiently takes care of the financial administration.  In addition, she performs all the secretarial duties of SAFLEC. The Board appreciates both of your contributions. Ladies, you really make my task as chairperson a pleasurable one. Finally, thank you to the Board members for attending meetings and helping drive SAFLEC to meet its objective. I look forward to working with the new board. Together with Nerisha and Louise we will continue experiencing high export growth