Textiles seem like a n obvious choice in Zimbabwe’s industrialisation progress, with cotton production being pushed hard and so providing a lot of the raw material, a skilled workforce, even if a large chunk of it is out of work or working somewhere else, reasonable potential local market and clear export markets for the quality end of the industry.
And it is obvious, since we have been down the route before, and we learned a lot about what does work and what does not work.
Up until the late 1990s Zimbabwe had a growing textile and tailoring sector. The history went right back to the Second World War when the reluctance of the Southern Rhodesia Government to invest in at least the early stages of textile processing was overcome and more use was made of the raw cotton that had been grown from the 1920s to fulfil British needs for non-American raw materials.
This saw State-ownership of spinning mills and cotton-wool manufacture and the start of some private sector smaller-scale weaving and manufacture of the cheaper ranges of blankets and cloth, largely for what was unpleasantly called the “native market”, where quality was considered a very distant second to price.
This had certain advantages after the war when it came to the South African market and a customs deal that allowed Zimbabwean textiles to enter South Africa duty free in unlimited quantities. The settlers managed to take over half the lower end of the South African market and that caused growing pressure from South African industry for their government to do something.
Eventually it did. But meanwhile the basis had been laid for an industry here. Certain problems came to the fore. For a start the stress on the lower end of the market had created a lot of consumer resistance since “made in Southern Rhodesia” was a label that implied low quality. Secondly a flood of lower-cost second-hand clothing was crimping the market. This was allowed in if from the Sterling area since there was not much a country in that area could do to limit trade within the sterling area, basically the British Empire and Commonwealth outside the Americas.
The Federal Government intervened, as it had quite a lot of powers when it came to economic matters. IT started privatising its spinning mills, trying to limit second-hand imports and actively seeking investors with enough cash and know-how to produce products of significantly higher quality.
So David Whitehead and Sons of Britain entered the fray. They had the know-how but were short of enough cash, and there was a lot of struggle to arrange the financing, but eventually the better quality mills were in place. A number of local firms could make the clothing, work clothes and uniforms at first, and the blankets. It looked as though Federation was moving into the take-off mode, despite the restrictions on exports to South Africa.
Then came UDI with its sanctions and its advantages. Textiles now had a protected, very strongly protected, local market. Imports were just about banned but currency was allocated to allow more raw materials in, such as the modest amount of synthetic thread to create cotton-rich blends, plus the chemicals to protect cotton fibre and process it to higher levels along with dyes and the like.
The UDI thrust also made it imperative to push quality now, since the middle-class market was largely white and they voted.
Lonrho stepped in and took over the David Whitehead local operations. Roland “Tiny” Rowland was never fanatic about obeying sanctions and did not object when the Rhodesian end of his empire used its non-distributable profits for investment. He must have rightly felt that when things returned to normal he would have a nice fat empire in the country where he had started out as a car dealer before he entered Lonrho.
He was right. Come independence the company he now controlled kept growing and dominated local spinning and weaving. Cotton was seen by the post-independence Zimbabwe Government as a relatively simple way of empowering communal farmers so raw materials were growing in quantity with high-quality hand-picked fibre ensuring quality up the line.
The same sort of UDI-level protection for local industry kept the market guaranteed. AS with so much of the UDI and early independence industrial revolution, the growing problem was very low levels of reinvestment and especially the replacement of capital equipment. But while what was there still worked the profits were reasonable and everyone was happy.
At the same time a number of really go-ahead business people were moving into the export trade, not so much for yarn and cloth but for finished clothing. This made sense. Even lower-wage countries were moving into basic textiles, and in any case the post-independence Government was not encouraging sweated labour.
But with a skilled workforce, which was paid better, and tight management that could switch production runs almost daily, a variety of niche markets were built up. Fashion houses do not want a million items, they want short runs. Some sizes are exceptional and a South Asian factory might not be able to make short runs of say jeans for short and fat people, a small percentage of the market but still a market.
A lot of these deals also allowed foreign and global branding of locally made clothes, and that helped remove the stigma of “local” on a lot of products.
Then came a series of blows. ESAP allowed industry to reinvest, if they had the cash. Textiles were largely in the group that did not. At the same time it opened doors to imports. Some coped, others could not. Lonrho as Rowland ailed and then died dumped textiles, so the main investor was out and the management team that bought David Whitehead had shallow pockets and did their buy out as hyperinflation hit.
The hyperinflation era, followed by the dollarization era, made the textile industry peculiarly unattractive to external investors, even if they had been encouraged, which they were not, at least in that industry and no one had the money locally. David Whitehead missed going into liquidation since it still had potential for resuscitation so got a string of judicial managers.
It also had some extra-difficult shareholders, who did not have the cash but who wanted money. One major entrant even managed to sell off a lot of the equipment as scrap in South Africa. Admittedly most of what went was well-passed its replacement date, but still. Even when a new investor entered in 2019, Agri Value Chain Zimbabwe, under the new pro-investment regime, the now minority shareholders split. Some agreed to being bought out, glad to escape with a bit of cash, but some became ultra-difficult. Charitably they might have believed their company still had value although this would require shareholders to chip in with a lot of cash; uncharitably they might have believed that if they were difficult they could get a better buy-out deal.
Anyway, a string of law suits and other legal challenges meant that it was only early this year that David Whitehead escaped judicial management, and just about the only real asset left was the core of the skilled workforce. Factory buildings could be erected elsewhere if necessary.
This saga also highlights that sometimes resurrecting a company is not always the most easy of routes. Sometimes, as has happened in other industries, it might be best simply to let it die and then build new but send the recruiting agents in to snap up the old workforce.
Regardless of whether Zimbabwe now pushes its textile drive forward by resurrection or new build, probably a mixture of both, it needs to push forward. The old 1980s problem of cheaper producers still applies, so the solution of pushing exports as manufactured products has to be intensified. Some have remained in operation, although perhaps importing the cloth, but can easily grow and be supplied by Zimbabwean cloth, although weavers and spinners need to have detailed talks on types and quality of their intermediate materials.
Once again we are at the sort of point where we need a lot more co-ordination. The Government is pushing cotton growing, and is willing to fix Cottco while it does it. Already it is largely an agency for Government funds, rather than the main production business, and many of us are aware of why it almost collapsed.
The intermediate stages need to be able to access that material. The weird arrangement that the bulk of cotton fibre is reserved for export probably arises from the equally weird currency hassles. Ginners need the export funds, not local purchases. That must be sorted out promptly and probably requires Government intervention; there are several solutions possible, but they must be applied.
With the intermediate materials now on hand, once this level is fixed, manufacture will be almost automatic. It is largely expanding what is there and allowing newcomers easy access.
Of course one long-term problem in the textile industry, some very bad management, needs to be sorted. Zimbabwe has good managers now, 42 years after independence, but the textile industry needs to hire its share and bring them up to speed, fast. We destroyed instead of growing the industry. We now need to rebuild, and quickly.