Only a few years ago, Floréal Knitwear was deemed the world’s third largest manufacturer of pullovers. Today, this is part of history. The recent decision of Floréal Knitwear to lay off a quarter of its workforce is a clear testimony that the days of pullover manufacturing are numbered in Mauritius.

This signals the end of an era. Mauritius has lost its edge in the low end of the market. Unless there is real effort to move to higher value addition, the future of the industry is bleak. Restructuring and innovative products are the key to survival, even if job losses are inevitable in the process.

Basic garments are the first to be hit by fiercer international competition. Nowadays, the major retailing firms in Europe and the US resort increasingly to online auction buying to source their pullover shipments. Internet technology has helped displace Mauritius as a major source of pullovers. Low-cost producers in Asia have already eaten a lot into our market share and are poised to add on more pressure as Mauritian quotas and duty preferences dwindle with world trade liberalization.

Floréal Knitwear is also showing the way of how to cope with the new predicament. Local operations are being re-engineered with fully independent units that will handle production from start to finish. At the same time, the more labour-intensive activities are being shifted to Madagascar where cheap manpower is in plenty. It takes Rs 70 less to produce a pullover in Madagascar than in Mauritius, according to an educated guest. Current monetary and exchange rate conditions in the neighboring island are all the more another big motivation to move manufacturing offshore, though political instability risks are very much likely to be factored in such decisions.

The textile industry as a whole is sailing in rough waters. More factory closures are unfortunately in the pipeline as the tough times are to last some time. According to the latest Central Statistics Office (CSO) figures, the export-processing zone (EPZ) will experience a contraction rate of 1% this year, when EPZ sales to the Freeport are excluded from the calculation (some Freeport operators consolidate consignments sourced from various factories before they are shipped to export markets).

The good news is that investments in new textile technologies, especially spinning, are growing healthily. According to the CSO, overall investment in the economy, which is mainly due to high investment in spinning mills, is expected to grow by 13.2% compared to 0.9% in 2003. This augurs well for the future years and may hopefully be laying down the new contours of the industry. The core of garment manufacturing that will survive the present restructuring phase will be more technology and innovation intensive and will create jobs for a semi-skilled labour.

Investments in spinning, apart from having a cost-saving goal, will also help Mauritius bid to satisfy the rules of origin criteria that are necessary for exports under AGOA (Africa Growth and Opportunities Act) to the US.

Investors still have faith in the clothing sector as shown by investment figures. But handsome pay-offs can only be guaranteed by innovative and value-added products that are manufactured by productive and efficient methods and sold on the world market at competitive prices.