A new feasibility study released by the Localisation Support Fund (LSF) has identified a clear commercial pathway to significantly expand local garment manufacturing in South Africa, with the potential to source an additional 81 million garments per year by 2030.
If achieved, this would increase local sourcing by 20%, add nearly R8bn in annual manufacturing output and create up to 34,000 new jobs across the clothing value chain.
Bridging the gap to Masterplan targets
Commissioned by the LSF and conducted by industrial development consultancy BMA over a year, the study assessed retailer demand, mapped local manufacturing capacity and capability, and developed a commercial business case with practical action plans to drive localisation.
The findings align with the objectives of the Retail-Clothing, Textile, Footwear and Leather (R-CTFL) Masterplan, which targets 65% local sourcing by 2030.
While progress has been made — with local retailer orders increasing from 250 million units in 2019 to 389 million units in 2024 (34% of total sourcing among Masterplan signatories) — this remains well below the 2030 target. Current sourcing levels support approximately 75,000 formal sector jobs.
Strong demand concentrated in key categories
The study highlights substantial unmet demand among major South African retailers for locally produced garments. Increasingly, localisation is being driven by commercial factors rather than social compact commitments, including:
- Shorter lead times
- Greater replenishment flexibility
- Supply chain risk mitigation
Although demand was mapped across 32 product categories, approximately 50% of the identified opportunity is concentrated in three key areas: t-shirts, denim and athleisure.
The report suggests that targeted, category-specific strategies are more likely to deliver impact than broad-based interventions.
Existing capability, but scale constraints
A survey of nearly 200 garment manufacturers confirms that South Africa has established technical capability and depth, particularly in KwaZulu-Natal and the Western Cape. The alignment between local capability and high-demand categories presents a strong foundation for growth.
However, price competitiveness remains a central constraint. While many manufacturers have improved cost structures, further alignment is needed — especially in basic knit categories — to meet retailer pricing requirements.
A key structural challenge identified is scale. A significant portion of the supply base operates at sub-optimal scale, limiting overhead recovery, constraining investment and weakening price competitiveness. The study’s modelling indicates that scaling operations and introducing more adaptive shift models could materially improve competitiveness.
A coordinated implementation agenda
The report outlines a commercial pathway to unlock growth in high-potential categories such as basic knits, emphasising the need for coordinated action across:
- Demand commitments from retailers
- Compliance and standards alignment
- Skills development
- Upstream investment
- Firm-level scaling and shift optimisation
- Targeted incentives
Irshaad Kathrada, CEO of the LSF, described the study as the most comprehensive of its kind undertaken in the sector.
“We undertook this study to understand how we move, in practical terms, from current sourcing levels to the ambitions set out in the Masterplan — which product categories to prioritise, what price and compliance requirements need to be met, and where we can harness capability that already exists in South Africa,” he said.
The LSF plans to work with industry stakeholders to pilot the recommended measures and support policymakers in implementing enabling tools.
Industry support for localisation push
Industry leaders have welcomed the findings.
Michael Lawrence, executive director of the National Clothing Retail Federation, said the study opens doors for renewed investment in regional and local manufacturing.
Simon Eppel, executive director of Research at the Southern African Clothing and Textile Workers Union (SACTWU), noted that improved visibility between retail demand and manufacturing capability could enable more deliberate growth and job creation.
Graham Choice, chairperson of the Cape Clothing & Textile Cluster, emphasised that localisation is no longer merely aspirational.
“Apparel customers and retailers are ready to source more locally where price, quality and responsiveness meet market needs,” he said. “Success will require determined, coordinated action by all stakeholders.”
From ambition to execution
The report concludes that South Africa’s garment industry possesses both the demand base and technical capability to expand significantly. However, unlocking the additional 81 million units will depend on addressing competitiveness constraints, scaling operations and aligning policy and industry action.
If executed effectively, localisation could shift from policy aspiration to measurable economic impact — delivering higher manufacturing output, stronger supply chain resilience and tens of thousands of new jobs by 2030.
The full Feasibility of Garment Localisation under the R-CTFL Masterplan report is available for download.
