Growth amidst niche sustainable product strategy and regional workforce

The Textile and Apparel sector of Mauritius is a model of resilience and preadaptation. It boomed in the 80s, even requiring extra workforce to be sourced from China. However, a decade later it was caught up by severe competition from South East Asia mostly. Today, a few factors are contributing to prove that investment in Textile and Apparel is a sound approach for companies incorporated in Mauritius.

As the Economic Development Board lists, Mauritius benefits from preferential market access through AfCFTA, AGOA, CEPCA, COMESA, EPA GSP, IOC, SADC, China FTA, Turkey FTA & Pakistan FTA. Furthermore, there are no import duties on equipment and raw materials and no export duties. For this sector, the country also proposes “streamlined procedures for the recruitment of expatriates and foreign labour with an 8-year work permit policy for expatriates in the manufacturing sector.”

Furthermore, there is a freight rebate scheme and also tax incentives such as a 3 per cent corporate tax on profit derived from exports of goods and an 8-year income tax holiday for companies engaged in the manufacturing of pharmaceutical products, medical devices and high-tech products. Given these exceptional conditions, it is not a surprise that Mauritian companies are exporting more each year. The primary countries being South Africa, USA, Europe and UK. According to Statistics Mauritius, export-wise the segment “Textile yarns, fabrics, made-up articles” rose by +5.7 per cent. Furthermore, under “Miscellaneous manufactured articles” the exports of “Articles of apparel & clothing accessories” rose by +9.2 per cent.

With regards to ranking of companies, the depreciation of the rupee benefitted the exporters but did not greatly increase their margins due to the cost of freight and purchase of raw materials. Thus, the total PBT only rose by 6 per cent while turnover rose by 10 per cent. The Ciel Textile segment of the conglomerate Ciel Group, occupied 44 per cent of the total turnover and 54 per cent of the total profit before tax. Its turnover rose from Rs 15.5 bn to Rs 17.4 Bn while its profit grew from Rs 744 million to Rs 1.1 Bn.

Year 2022 has been a prudential year for the leading companies. However, they strengthened their workforce, diversifying production from Madagascar and the African continent and other countries. And gearing their efforts towards capturing tomorrow’s market by developing the sustainability aspect of their processes. The EDB itself indicates that the investment opportunities in this sector are as follows: Technical & Medical textiles, Seamless garments, Yarn spinning, Vertical integration in fabric production (knitting & weaving) and high- end sustainable garment production. The niche and high-quality product strategy of the main companies of the Textile and Apparel is giving clear indications that it is a strong and thriving business segment.