R200 Million Grant for Cotton Industry

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The Sustainable Cotton Cluster (SCC), created in 2014 to increase the southern African cotton industry’s competitiveness, has already enabled product value in excess of R2,4 billion through the participating supply chains, according to Thomas Robbertse, CEO at IQ Logistica, the company which developed the cloud-based SCC Operations Visibility Platform.

Thomas says that much of this activity has been made possible by the introduction of their operations visibility platform that not only integrates the cotton supply chains, in terms of data capture and information processing and reporting, but also ensures that traceability and sustainability within the chains can be proven through visible transparency.

5 000 Jobs

The SCC was funded with an initial five-year grant of R200 million from the Department of Trade and Industry’s (DTI) competitiveness improvement programme

Since then much progress has been made, among others, almost a 200% increase in South Africa’s cotton production, an increase of just over 40% in local beneficiation, the establishment of close to 1 300 small cotton farmers and the creation or retainment of about 5 000 jobs.

Reporting in one of its recent newsletters, Cotton SA said the SCC set out to test a retail business model that effectively combined sustainable sourcing with quick response through virtual integration of the entire supply chain, from farm to retail point of sale. This led to the establishment of the Integrated Supply Chain Programme (ISCP) model.

“The ISCP model was tested with Mr Price Group and was successfully demonstrated on a commercial scale. Subsequently, Woolworths and Edcon also joined the SCC.”

Over-arching

Dr. Hennie Ras, of IQ Logistica adds that cloud-based traceability platform integrates the cotton supply chain that deals in different commodities, from seed cotton to finished garments, each of which needs to be tracked differently, yet all using the same over-arching IT platform and within the same database in the cloud.

“The beauty of the system is that it can handle all transformations and value adding processes that cotton fibre undergoes in the value chain. This means a cotton T-shirt can be traced back to the farms on which the cotton was grown. When it comes to quality issues, the system can drill down to a specific event to identify the problem or to recall products.

“This item-level traceability is unheard of in the textile industry and gives the SCC a real value proposition to sell to retail partners and brand owners,” Ras added.

Compliance

Another feature of the operations visibility platform is that the requirements for local cotton to comply with the global Better Cotton Initiative (BCI) standard are built into it. The system monitors compliance on a continuous basis and gives the retailer and each participant all the information necessary to communicate with clients and consumers about the items they buy.

The success with the platform, especially regarding its ability to gage if BCI standards are adhered to, has already drawn interest from other cotton-producing countries in Africa. “Furthermore, our expertise in the local cotton industry allows us to extend similar solutions to supply chains in other textile industries.”

Thomas commends the DTI on its vision for seeing the potential of a reignited local cotton industry, not just to boost an important agricultural sector in South Africa’s economy and the concomitant direct and indirect creation of employment, but also in playing a role in contributing to increased sustainability.

The biggest yet

GroCapital recently reported in their outlook for the cotton industry that the revival of the industry has enabled price stability and increased local offtake, which in turn has fueled production and processing efficiencies throughout the value chain.

“Growth is further evident in the increased number of hectares being planted, as well as the drive towards improved technologies, especially in the harvesting, hauling and transport nodes of the value chain. The 2016/17 season is projected to yield the biggest seed cotton crop since 2004/5 at 18 599 hectares planted.

“This represents, respectively, an increase of 19% in irrigated hectares and a mammoth 364% increase in dryland hectares compared to the 2015/16 season, and will result in a 64% increase in lint bales from the previous season.”

IQ Logistica,

www.iqlogistica.com