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Q3 2023 - (released November 2023)

SA's quarterly Private Equity & Venture Capital magazine


Alitheia IDF weaves growth and resilience into the local textile industry

by Michael Avery

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Since the advent of democracy in South Africa, imports have had a significant influence on the apparel and textile manufacturing business. But according to a manufacturing study released by Statistics South Africa in July 2023, nearly 121,000 jobs in the textile and garment industry were lost between 2005 and 2021.

That’s why news of a strategic alliance between IVILI Group, a woman-owned textile enterprise, and Alitheia IDF, Africa's pioneering gender-focused private equity fund – injecting a substantial US$5m investment into the industry – is welcome. This landmark partnership is set to bolster local manufacturing capacity, foster employment, and rejuvenate expertise within the sector.

The textile industry in South Africa has a long history of contributing to the national economy and is a key source of employment, particularly for women. Although the majority of textile manufacturing facilities are located in the Western Cape, KwaZulu-Natal, Gauteng and the Free State, the industry's economic advantages impact South Africa on a national scale.

The industry is founded on a distinct heritage of cultural traditions from the country's numerous provinces. Many families gain by selling clothes, fabric and traditional designs in many distant places where the textile industry is one of the only sources of official employment.
In 2019, an industry-wide master plan was created to assist sector expansion and procurement. This master plan also described how the government would deal with illegal material imports and encourage native industrial capabilities. The industry's future was clearer after its debut, but then the global epidemic struck.

The textile industry was immediately affected by COVID-19. Lockdowns had a significant economic impact on the supply chain, and sales and commerce fell significantly, though the industry has recovered since the pandemic's conclusion. During this time, e-commerce and internet shopping were big industry develop-ments, but mostly for apparel, garments and fashion, rather than textiles and fabrics.

However, as the world grows more environmentally conscious, the future of sustainable fabrics seems promising, with trends towards sourcing and procuring locally manufactured clothing and textiles. 

Comprising IVILI Loboya, a distinctive wool and cashmere processing facility situated at Ibika Industries in Butterworth, Eastern Cape, and IVILITEX, a state-of-the-art garment manufacturing plant strategically located at the heart of Cape Town's clothing and textiles hub, the IVILI Group stands at the forefront of textile innovation.

Co-founded by the late Dr Vuyokazi Mahlati, IVILI Loboya embodies a legacy of South African social entrepreneurship. Meanwhile, IVILITEX – with its expansive garment manufacturing facility in Epping, Cape Town – is primed to produce high-quality jeanswear for the local retail market. This facility features a cutting-edge jeans wash unit, integrating advanced technology from Spain, in collaboration with industry leader, Jeanologia. The result is a production process that maximises efficiency and output while minimising environmental impact.

With a commitment to bridge the divide between locally produced and imported apparel in South Africa's garment production landscape, IVILITEX stands poised to offer a solution for local retailers seeking large-scale, domestically manufactured garments. Since COVID, the push towards near-shoring or reshoring has certainly helped. 

Lilitha Mahlati, CEO of IVILI Group, says that the Group is setting its sights on becoming Africa's premier textiles conglomerate, with the aim of increasing the proportion of locally-produced apparel in the domestic retail industry from the current 44% to an impressive 65% by 2030.

"For us, leading the textiles charge on the continent means uncompromising quality and delivering a technologically advanced, sustainable product to global markets," says Mahlati. 

Alitheia IDF, a visionary $102m private equity fund co-founded by South African trailblazer Polo Leteka and Nigerian luminary Tokunboh Ishmael, strategically aligns with IVILI Group's ethos. The fund's investment strategy centres on empowering women-owned, women-led, or women-serving Small to Medium Enterprises (SMEs) with potential for regional scale and socio-economic impact.

"We are the first private equity fund manager in Africa prioritising growth-stage companies with gender-diverse teams across the entire business value chain, poised to lead regional expansion and foster economic and social transformation," says Leteka. 
Recognising the pivotal role of the clothing and textile sector in sustainable industrialisation, employment creation and export growth, this deal underscores its strategic importance. 

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