Manufacturing
Lesotho is among the top four (4) producers of textiles and garments in Africa and has well established footwear industry. There is a growing position in automotive components, electronics and electrical products. Good transport links give better access to wider markets and pure water in large quantities is vital in the industry. Subsectors in manufacturing.
Mabataung Tsinyane
Investment Promotion Manager
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Investment Opportunities
- Lesotho is among the top 4 producers of textile and garments in Africa and has a well-established footwear sector for notable companies such as Levis Strauss in the international arena.
- Lesotho also producers knit garments and woven garments which are supplied to the South African market, including high-end apparel retailers. The footwear industry is comprised of 2 manufacturers who produce Jaguar Shoes formally Springfield Footwear) that used to make branded pool sandals for Puma.
- The Clothing and Footwear sector employs the highest number of people in Lesotho and the country is aiming to align its economy and social development in its key sectors, including the textile sector. Lesotho is also known for the fair and ethical labour standards in the textile industry.
- Lesotho represents an attractive hub for investors looking to invest in the production of denim garments and has a higher potential for export and trade.
Investment Opportunities
- Lesotho has a growing proposition in the automotive industry, strategically focusing supplying labour-intensive automotive components to South Africa’s strong automotive industry. The country’s competitive advantage in manufacturing, lower fuel costs, relatively competitive wages and overall lower production costs, allows it to produce automobile components for companies such as Volkswagen, BMW, Nissan, Toyota etc.
- Lesotho’s automotive industry also benefits from lessons from the textile industry and has the potential to develop capacity for service export markets such as the manufacture of leather car seat covers, plastic and leather interior accessories and electrical components.
- Since the implementation of South Africa’s Automotive Production and Development Programme (APDP), which aims to increase vehicle production to 1.2 million vehicles per annum and substantially diversify and deepen the component supply chain, demand for automotive productions has increased, creating greater opportunities for increased manufacturing in Lesotho, whose automotive products qualify for local content under APDP.
Investment Opportunities
- Lesotho’s manufacturing sector also provides opportunities in the electronics component and appliances market. The sector currently produces switches, relays, fuses, surge suppressors, plugs, sockets, lamp holders etc. which it exports to China, EU and the UAE.
- For the electronic appliance sector, Lesotho produces TV sets, sound recorders and producers, and related accessories which it exports to Southern African countries.
- The sector also provides opportunities for the manufacturing of automotive components, men’s and women’s high value garments; leather and footwear, woven cotton fabric; hosiery and hotel linen.
- Investors could benefit from double digit returns in the electrical appliance and components sector.
The anchor industry in this sector is textile and garment manufacturing which has existed in Lesotho for 30 years competently servicing the US and regional markets. For the past 5 years Lesotho has been the number one exporter of garments to the US under the African Growth and Opportunities Act. Areas of investment include automotive components, textiles and garments, plastic products, consumer electrical and electronic appliances, packaging material and garment accessories such as zipper and buttons.
Opportunities exist in the following products:
- Automotive components
- Men’s high value garments
- Leather and Footwear
- Electronic apparatus
- Woven fabric of cotton
- Ladies high value garments
- Moulds (Injection or Compressed)
- Hosiery: panty hose and tights
Textile and Garments
Automotive Components
The Automotive Industry in Lesotho is fairly new. While the country is not yet ready for an overall assembly of vehicles, the plan is to pluck Lesotho into the regional automotive value chains. The country’s competitive advantage lie mostly within the high labour intensive automotive components manufacturers. South Africa’s strong automotive industry provides such an opportunity for Lesotho to explore value chain opportunities within the industry in line with the competitive advantages of abundant and effective labour at competitive wage rates. With introduction of the new Automotive Production and Development Programme (APDP), South African Automotive Strategy aims to increase its production volumes to 1.2 million vehicles per annum by 2020 and substantially diversify and deepen the component supply chain. Lesotho automotive products qualify for local content under the APDP.
Opportunities for Lesotho lie in the manufacture of small components of finished products to support the South African Automotive Industry (OEMs) and in the long term develop capacity to service export markets. Examples of these are the manufacture of leather car seat covers, plastic and leather interior accessories and electrical components.
Lesotho is also geographically central within South Africa and well positioned to supply all automobile manufacturing plants in the RSA:
- 600km from East London (where Daimler-Chrysler/Mercedes Benz is located)
- 750km from Port Elizabeth (Volkswagen & General Motors/Delta)
- 500km from Pretoria (BMW & Nissan)
- 600km from Durban (Toyota)
Leather and Footwear
The leather industry in Lesotho is in its infancy stage. The country has 2 shoe manufacturing factories despite the fact that shoes qualify for all benefits under AGOA. The 2 companies produce mainly for export while a large share of the domestic market has to rely on imports from South Africa.
Foreign direct investment opportunities in this sector would include leather tanning and finishing, footwear and footwear components, leather garments, leather goods including bags, car seat covers, wallets, belts, gloves and other accessories.
Electrical and Electronic Components
The country boasts a pool of labour resource which includes people who have graduated with different technical diplomas. The knowledge and skills acquired will enable them to work on subassemblies or the final assembly of an array of finished electrical and electronic products or components.
Opportunities exist in the production of a wide range of finished goods from manufactured parts or subassemblies. These could involve assembly of intricate manufactured products such as engines, computers, electrical and electronic components, radio or test equipment, machine tool controls and prototypes of different types of products to meet the domestic and international markets. Currently only four companies assemble electronic and electrical products such as television sets and circuit breakers for international and regional brands.
Plastic Moulds
Manufacturers in Lesotho consume a lot of finishing accessories and packaging materials. All accessories are imported. Most of packaging materials are also imported into Lesotho. There are opportunities for manufacture of boxes and plastic packaging materials as well as buttons, zippers and other finishing accessories for garments