"Between Restructuring, Offshoring, and Sustainable Innovation", 26 February 2025

The recent layoff of 240 employees at the Star Knitwear textile factory, due to "a decline in production, increased costs, and a relatively low level of competitiveness," highlights the sector's fragility. The company is forced to restructure and respond "to strategic imperatives aimed at adapting the company's operations." This harsh reality is felt throughout the sector, forcing many operators to seek opportunities elsewhere...

Employment, business creation, contribution to national wealth, industrial growth, and foreign direct investment are all showing a downward trend...While textile exports grew by 28%, clothing exports declined by 14%, resulting in an overall decline of 4% for the textile and clothing industry in 2024.

This sector experienced a notable slowdown in 2023, with a 15% drop in revenue at the end of September compared to the previous year. Furthermore, the main export markets, Europe and South Africa, are directly impacted by global economic instability, declining purchasing power, and inflation. In particular, there is uncertainty surrounding the expiration of the African Growth and Opportunity Act (AGOA) in the United States in 2025, although an extension is being considered. According to the Mauritius Export Association (MEXA), production costs are the sector's biggest challenge...

Despite several decades of activity on the island and constant investments to improve quality and maintain the company's operations, a new direction seems to be emerging: a shift to Madagascar. "Given the high cost of production in Mauritius, the option to continue expanding or sustain the business is to create a sister company that can support the business in Mauritius while establishing a presence in Madagascar," says the operator, who wished to remain anonymous. According to him, faced with rising costs in Mauritius, it is only natural for companies to turn to Madagascar.

..."A bitter reality to digest," he confides, "is the fierce competition on the international market, which forces operators to sell their products at lower prices." According to him, obtaining raw materials has become increasingly difficult, with the depreciation of the rupee and import costs remaining very high. "Furthermore, the wage increase, when you take all this into account, means the company is operating at a loss." He adds that, although the government has provided incentives for textile companies, it is crucial that it continue to support them, as wage increases have had a significant impact on companies in the sector...

The labor shortage is a serious issue for the company. Mauritians with experience in the textile sector have become "rare gems," which is forcing the employer to seek foreign labor..."The Mauritians aren't particularly interested in the textile industry because it's a fairly demanding sector...Therefore, we decided to turn to foreign labor; unfortunately, recruiters don't provide us with workers who match our specific needs. Therefore, we are forced to train the...workers who arrive at the company...."...

[Translation via Google Translate]