UPDATE: SOUTH AFRICA: Seardel to cut up to 1,500 jobs
South Africa's largest apparel and textile maker, Seardel Investment Corporation Limited, may cut as many as 1,500 jobs at its operations in Western Cape and KwaZulu-Natal as part of efforts to narrow losses at its clothing unit.
The company is consulting with the Southern African Clothing and Textile Workers Union, the Business Report newspaper says.
It adds that Seardel plans to dismiss 1,000 workers from its Western Cape factories and 500 workers from the Ladysmith factory in KwaZulu-Natal - with chief executive Stuart Queen vowing to "eliminate low-margin production across the board."
The company's latest results for the six months to 30 September single out the clothing segment for its "disappointing performance," with operating loss more than doubling to ZAR50m (US$6.6m) from ZAR20m in the same period the year before. Increases in raw material and production costs were blamed.
The manufacturing unit is "plagued by all the issues that have weighed down the entire sector for a number of years," the company said.
It added: "Unfortunately, the turnaround of the clothing division has been slower than we first anticipated. Any improvements that have been made have been lost to reduced margins and declining volumes.
"Our production facilities in the high-wage metro areas are of particular concern as over time these factories have lost more and more of the long-run work without which factory efficiencies suffer. This has resulted in further restructuring being required in these areas."
The company said it is also trying to turn around the division through a revamp of the IT backbone, upgrading the material resource planning system and rationalising its product portfolio.
This would be the latest in a series of closures at Seardel, which wound down the spinning, weaving, finishing and denim divisions of its Frame Textile unit in 2009 and shuttered its men's suit factory in Durban at the beginning of 2010.
However, Seardel has also asked just-style to point out that the job cuts relate to its clothing manufacturing business - and are completely independent of its Brand ID division, which manages apparel brands including Speedo, Brooksfield, After Eden, Elle Macpherson Intimates and Maidenform.
Indeed, this unit remains a key strategic focus area for the group, and moves are underway to launch the new 46664 fashion and lifestyle label internationally.
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