Directors Report

EXECUTIVE DIRECTORS REVIEW, 2018

In April 2017 and after two consecutive quarters of contracting growth our economy entered into a technical recession, for the first time since 2009. The business confidence index also dropped to around 29 basis points. Then the cabinet reshuffle on the 30th of March 2017 with the firing of the finance minister (Pravin Gordhan) and his deputy minister resulted in a downgrade (by the ratings agencies) to South Africa’s foreign and local currency debt. Unemployment also reached a 14-year high.

As a result, it should come as no surprise to see that for the first time in 6 years our annual production did not grow year on year and actually declined by 1.7%. However, despite this there were manufacturers who showed nice growth. So, all was not gloom and doom.

If anything, it shows our reliance. Of some concern was the increase of 14.9% on imports (some 27 million pairs) all of which was for very cheap footwear.

The issues at the SABS still remain a concern and it appears that interventions are finally taking place. The NFLC saga has still not ended and the new FLIC is still to be set up.

The terms of office on the SAFLIA board for André Compion (Deputy chairman) and Mark Gibbings comes to an end and they have volunteered for re-election.

Most of the other activities of SAFLIA are contained in the various sections in this report and all that remains, is for me to express my thanks to all the members and the Board for their continued support.

EXECUTIVE DIRECTORS REVIEW, 2017

Although 2016 was a tough year it turned out to be a very special and momentous one in that a new record of 66’865’440 pairs of footwear was produced. The previous record of 62’963’500 pairs was produced in 1981. This works out to 3’901’940 pairs more or 6.20%. Quite a noteworthy achievement. This was achieved by an increase in production outputs of 5 major producers. This will surely be pleasing to the DTI who selected our sector (together with a few others) as a potential growth area and replacement for imports and hence the CIP & PIP.

Still of significant concern is the ongoing struggle with the SABS & NRCS but in particular the ineffectiveness of the SABS to carry out all the testing required and timeously, thus placing huge restrictions and challenges on those producers who require these in order to get the necessary LOA’s from the NRCS. If anything, it has made importing similar product easier, as there is no problem in getting tests done overseas. Therefore the incentive and advantage to produce locally is quickly being taken away.

The NFLC has now been replaced by FLIC (Footwear & Leather Industry Cluster). However the structure, registration etc. still needs to be finalised.

At last years AGM Noel Whitehead, Francois Strydom, Mahomed Mahomed and John Comley were re-elected and Jacky Hay was elected to the Mancom Board. At the subsequent Mancom meeting in December, Noel was re-elected as Chairman. They will all serve full terms.

In conclusion and as always I wish to thank, all of our valued members for their continued support, the Board for volunteering their time and efforts and also a special thank you to all the other structures involved in out industry.

Jirka Vymetal

Executive Director

EXECUTIVE DIRECTORS REVIEW, 2016

Each year comes with new challenges and I have come to realise that despite our small size, our industry is quite resilient compared to some of the bigger ones. This is thanks to the cooperation of all the structures involved – details of which are contained towards the back of this publication and therefore no need to include in this review.

Of significance were and still remain 2 challenges, being those of the NFLC and the SABS. It was decided to dissolve the NFLC under the current format and a new structure is being worked on, so that its mandate can be effectively and properly implemented. Our industry was not getting the benefit which was intended.

With regards to the SABS, an up-gradation programme is currently being drafted, in order to address the shortcomings with regards to some testing required and the unavailability of partial testing. Escalating costs of testing are of great concern and are also being addressed. I am confident that these will be resolved in the not too distant future. The steep decline over the years in State tenders is also of great concern.

The terms off office on the SAFLIA Board for Noel Whithead (Chairman), Francois Strydom, Mahomed Mahomed and John Comley (co-opted) are up for re-election. Sanjay Pattundeen who has served on the Board for many many years, some of which were as Chairman & Deputy Chairman has resigned. On behalf of our members and the Board, I extend a special thank you for his efforts and valued contribution. As a result, there are vacancies on our Board and it was decided to try and fill it to it’s capacity of 9 members. Nomination forms were sent to all members.

Lastly and most importantly, I wish to thank all our valued members and the Board for their continued and growing support.

Jirka Vymetal

Executive Director

EXECUTIVE DIRECTORS REVIEW, 2015

I am just going to touch on a few significant and noteworthy events that happened during this period, as most other important issues are contained in the message from Noel Whitehead our Chairman and at the end of this report under the various headings of Multi and Bi-lateral Agreements, labour affairs, membership etc. So it’s needless to repeat what has already been said.

One of the biggest changes was the decision for SAFLIA and SAFLEC to go their own ways mainly through the Dti’s initiation so that “the Export Promotion Agencies (E.P.A’s) or Export Councils are independent and can fully concentrate on the task at hand”. This gave us the opportunity of moving into smaller more cost effective premises and also to establish a special toll free number 0800SAFLIA.

Last year three of our Management Committees (Mancom) terms of office had come to an end. They were Sanjay Pattundeen, Mark Gibbings and Andre Compion, our Vice Chairman. Fortunately all three made themselves available for re-election and this was unopposed. John Comley was again co-opted.

At the subsequent Mancom meeting in November, Noel Whitehead and Andre Compion were re-elected as Chairman and Vice-Chairman respectively.

In closing I wish to extend a sincere thank you to our valued members for their continued support.

I’m really looking forward to the next chapter as there are some exciting projects and programs to come.

Jirka Vymetal

Executive Director