South Africa clothing factory owners warn of collapse as migrant workers leave

“Our sector will one hundred percent collapse if migrants suddenly disappear from our factories,” says Iqbal Ismail, a third-generation clothes maker and the chair of the eThekwini Clothing and Leather Association.

Ismail employs 150 workers, only 30 of whom are South African.

In May, the association called for a “complete shutdown of CMT factories in eThekwini” in the second half of June to raise awareness of the sector’s dependence on immigrant workers. CMT stands for Cut, Make and Trim (CMT), and refers to factories – most of them in KwaZulu-Natal – in which clothes are made on behalf of clothing retailers.

The shutdown did not materialise, but factories are closing anyway, says Ismail, as immigrant workers flee the country.

Ismail said the association, representing 102 CMT businesses, was founded “in response to ongoing demands that no foreigner be allowed to work in factories”.

“We are simply trying to survive,” he says.

To more closely investigate claims of an impending collapse of CMT businesses, GroundUp travelled to Newcastle.

Depending on who you ask, it is home to between 140 and 300 CMT factories. Almost all are owned by citizens of Taiwan and the People’s Republic of China, living in South Africa with permanent resident status.

“It is true, if you take foreigners out of the factories almost every CMT will have to close,” said Alex Liu, who has for years been the unofficial spokesperson of the Newcastle factory community and is also a PR councillor.

“The main problem is we simply don’t have enough skilled machinists. When you make pants, the local machinists can do overlocking and most of the other operations, but very few know how to insert the zipper, which is a specialised task that is mostly done by foreigners. With investment in the training of local machinists, this could change, but the sector needs time and support, which is the opposite of what is happening now,” he said.

The town’s CMT sector is currently reeling from the sustained exposure of “sweatshop” type factory conditions, following high-profile government inspection raids in September 2025 and February 2026.

The raids revealed wages well below baseline rates, squalid worker dormitories, unsafe factory floors, and a reliance on immigrant workers from other countries in southern Africa.

The impact on business has been severe.

“Since February, most factories, if not all, have been on short-time,” said Liu.

In nearby Madadeni, in the industrial park run by the Ithala Development Finance Corporation, Ronghua Yan, better known in the industry as David Old (derived from the name of his business, David Old Tailor), is struggling to keep the doors open.

“When I arrived here in the early 2000s, the industry was down; tall grass and broken windows everywhere. I invested, and others followed. We were supported, and business started to bloom. About ten years ago, the storms really started: low-prices storm, union and Bargaining Council storm, load shedding and looting storm. Now, foreigner storm,” said Yan.

All CMT factory owners in Newcastle are facing the same difficult choice, he said.

“Either we leave while we still can, or do something different, like marketing our own brands. We cannot continue like this. The retailers are not going to pay more, because they have their own problems – all over the world, consumers simply don’t have money to buy clothes right now,” he said.

He used the Chinese term 轮回 (lun hui) – meaning a cycle of death and rebirth – to describe his experience in South Africa.