The Clothing and Textiles Competitiveness Improvement Program (CTCIP) is a programme of the Department of Trade and Industry (the dti’s) and forms a core part of the implementation of the Customized Sector Programme (CSP’s) for the Clothing, Textiles, Footwear, Leather & Leather Goods Industries. The CTCIP’s core purpose is to assist industry in upgrading process, products and people, re-positioning South Africa to compete effectively against other low cost producing countries and equipment upgrading.
The Clothing and Textile Competitiveness Improvement Program is a five-year plan by the Department of Trade and Industry to stabilize employment and to improve overall competitiveness in the clothing, textiles, footwear, leather and leather goods manufacturing industries.
The Clothing and Textiles Competitiveness Improvement Program (CTCIP)
The Customized Sector Programmes consists of a number of programmes aimed at creating sustainable capabilities and employment in these industries.
It is divided into the Improvement Programme (CTCIP) and the Production Incentive (PI):
- Improvement Programme (CTCIP)
The CTCIP makes 65% grants to individual companies and 75% grants to company clusters.To obtain higher levels of world-class manufacturing, the dti would support competitiveness improvement interventions for clusters through the CIP.
- The Production Incentive (PI)
The Production Incentive (PI) forms part of the overall Clothing and Textile Competitiveness Programme (CTCP) and flows from the implementation, by the dti, of customized sector programmes (CSPs) for the clothing, textiles, footwear, leather and leather goods industries. The PI makes grants pegged at 7.5% of individual company manufacturing value addition.
The R200-million grant fund seeks to provide funding assistance for these sectors to invest in competitiveness improvement interventions.
It will assist the textile industry in upgrading processes, products and people to re-position it so that it competes effectively against other low-cost producing countries, and also stabilize local employment
How the programme works
The Clothing and Textile Competitiveness Improvement Program will require a network of companies (a cluster) to work together to improve the competitiveness of the network by including as many best practice elements that constitute successful clusters as possible.
It would also work towards maximizing production capacity development and value-added processing of local raw materials starting with cotton and then broadening its scope to include all other natural and synthetic fibers.
How the clusters work
The programme is based on cluster formation of either similar manufacturing entities or a value chain cluster, comprising of manufacturers, suppliers and retailers in order to engage in collective improvement activities.
The clusters are separate legal entities registered as a not-for-profit companies that provide regulatory foundation for financial management and project implementation.
Clusters are divided into two categories, with an ordinary cluster being a group of at least five manufacturing companies or a combination of manufacturing and related organizations (e.g. retailers, design houses, component manufacturers) that are jointly working towards obtaining mutually beneficial objectives, and a national cluster coordinated by a national structure.
All members of the clusters commit themselves to a financial contribution towards the activities
The programme incentives
For ordinary clusters, the incentive programme provides investment support to registered entities by offering a cost-sharing grant incentive of 75% of the qualifying project costs. The remaining 25% comes from the cluster participants.
But the incentives do not cover costs pertaining to machinery, equipment, commercial vehicles, land or buildings and grant support for each approved partnership is limited to a cumulative ceiling of R25-million over the period of the programme’s implementation.
For national clusters, the incentive provides investment support by offering an initial investment grant of 100% for the first year, where after it becomes a cost sharing grant of 95% from the incentive programme and 5% from cluster participants in the second year, and depreciates accordingly on that rate for a period of five years
Objectives of The Clothing and Textiles Competitiveness Improvement Program (CTCIP)
- To build capacity among manufacturers and in other areas of the apparel value chain in South Africa, to enable them to effectively supply their customers and compete on a global scale. Such competitiveness encompasses issues of cost, quality, flexibility, reliability, adaptability and the capability to innovate.
- To help combat the decline in South African textile industry, including the loss of jobs and revenue.
- To assist industry in upgrading processes, products and people, re-positioning South Africa to compete effectively against other low cost producing countries.
Benefits of The Clothing and Textiles Competitiveness Improvement Program (CTCIP)
The Clothing and Textiles Competitiveness Improvement Program makes 65% grants to individual companies and 75% grants to company clusters.
The PI makes grants pegged at 7.5% of individual company manufacturing value addition.
Grants may be used for interventions that improve competitiveness, including upgrades and expansion of capital equipment, increasing productivity, enhancing employee skills, improving products and processes, reducing costs and subsidizing interest payments on debt.
Incentives are available to clothing manufacturers, textile manufacturers, cut, make and trim (CMT) operators, footwear manufacturers, leather goods manufacturers, leather processors (specifically for leather goods and footwear industries) and design houses (provided the design house partners with one or more CMT’s).
The Production Incentive Programme specifically excludes goods manufactured for the automotive sector which qualifies for any incentive programme offered for that sector.
Preference is given to cluster projects that are based on world class manufacturing principles and which take an holistic approach targeting all four of the intervention elements: people, process, product and market development
At DTC we understand the complexities of the various funding agencies and the unique application criteria for each. We have assisted thousands of entrepreneurs through the application process to access funding for businesses, and we can assist you with the same.
Contact us for more information and financial assistance on The Clothing and Textiles Competitiveness Improvement Program (CTCIP).