Local manufacturer thrives despite eastern competition

Through a number of investments, innovative technology and some forward-thinking strategies, management has developed the company into a best practice case study of how the local clothing and manufacturing industry can be sustainable.

"Cheap and often illegal imports have compelled domestic manufacturers to step up performance," says Cape Union Mart CEO, Andre Labuschaigne. "Because we've always refused to compromise on quality, yet offer value for money, our brand had to evolve in an innovative and forward-thinking way.

Price is not everything

He says local manufacturers are competing with the Asian market's cutthroat prices mainly due to its industry's low labour costs, large production runs and subsidies offered by the state and other government authorities. However, he believes that price is no longer the only determining factor of competitiveness in the industry.

"These markets offer low-complexity products, which see all added values removed and so we cannot compete with them on price alone, without sacrificing quality. However, we have succeeded in building a sustainable advantage by manufacturing the best top-end technical adventure clothing, using the latest production technology methods and by focusing on highly efficient operational capabilities."

Innovation and efficiency

Over the past eight years, demand for the company's products has increased substantially, with sales increasing more than five-fold over the period. Getaway Magazine's 2012 Readers' Choice Gear Awards recently revealed that out of 100 garments owned by readers, 43 carry the K-Way brand.

By remaining at the forefront of innovation, it has been able to stay ahead despite a challenging manufacturing sector. To enhance design and production capabilities, more than R2-million was recently invested in equipment and machinery. The size of the factory's production floor was also increased by 700 m² at a cost of more than R3 million. In addition, a skills development programme was refined to ensure a strong skills base on a technical and organisational level.

"The company remains committed to product development and design. We were the first manufacturer in Africa to introduce sew-free technology, which allowed us to make rain- and waterproof seam-sealed clothing. That's just one example of the many design innovations that have allowed us to lead on the development of technologically advanced garments able to withstand the harshest conditions on Everest, while simultaneously being comfortable enough for weekend warriors," adds Labuschaigne.

LEAN Manufacturing Programme

As part of its commitment to be in line with international best practice, it focuses heavily on waste identification and reduction. The business is also part of the Clothing and Textile Competitiveness Improvement Programme's (CTCIP) LEAN manufacturing project, which helped it achieve the following:
• The factory's repair rate has improved from more than 10% to less than 2%
• The reject rate has improved from more than 2% to less than 0.8%
• Absenteeism has been reduced from more than 5% to less than 3%
• Efficiency levels have improved from less than 65% to more than 85%
• On-time delivery has improved significantly
• Employment opportunities increased by 8%

Its specialist skills and/or equipment means it is equipped to offer laser-cutting, embroidery, sew-free and rainwear seam sealing.

Government support

With its factory based in Ottery in Cape Town, the company has taken advantage of the Western Cape Government's funding assistance to the Cape Clothing and Textiles Cluster (CCTC). The CCTC, a partnership between the Western Cape government and 16 manufacturers in the province, aims to improve the competitiveness of the clothing and textile industry, to ensure its future success.

Western Cape Minister of Finance, Economic Development and Tourism, Alan Winde, recently visited some of these CCTC factories, including K-Way, which he commended for world-class manufacturing excellence.

Winde says, "The success of local manufacturers, such as K-Way, shows that sustainable development in the clothing and textile sector is possible when companies grab hold of all opportunities offered to find innovative and economical ways of manufacturing."

Labuschaigne says provincial government initiatives like CCTC and national government incentives are essential for success in local manufacturing.

"However, we will continue to encourage government to scrap or lower import duties on fabric, while it finds solutions to bolster the local textile industry. This in turn would see further growth of the manufacturing sector.

"The company's success in establishing itself as an iconic South African brand is the result of our commitment to measured and sustained growth. We pride ourselves on the part we continue to play in developing a healthy and competitive manufacturing sector," concludes Labuschaigne.

History of a brand

Cape Union Mart dates back to 1933 when the grandfather of the current chairman, founded the business on the corner of Corporation and Mostert Street in Cape Town. The third generation of the family now runs the group, with the fourth generation already making their mark.

K-Way was established in 1981, when Cape Union Mart made its first significant commitment to local manufacturing by acquiring the Hepworths manufacturing operation in order to ensure flexibility and faster production times. This followed its decision in the early 1980s to secure its own sources of local supply. At this time, Sparks and Ellis, the uniform contracts company within the Cape Union Mart group, was supplying traffic, fire and security forces with garments that were typically produced by outsourced tailoring suppliers.

Arthur Krawitz, the second-generation leader of the business, was affectionately known as 'Mr K'. During his time in the business, everybody in the company knew there was only one right way of doing things and that was Mr K's way. It was therefore natural to name its locally made range of outdoor and travel clothing after the way in which it is made, the K-Way. It scooped the prestigious 'Best Practice Award' for showcasing excellence in World Class Manufacturing at the Cape Clothing & Textile Cluster's AGM in March 2010.

Today, it employs almost 190 people, a level that is ahead of DTI targets. Due to high demand, the factory works to capacity and continues to outsource production work to Cut Make and Trim (CMT) operations that collectively employ another 100 staff. It has never retrenched a single staff member, which is also part of the group's employment philosophy.

Cape Clothing and Textile Cluster

This was launched in 2005 because of the considerable pressure the industry was facing over trade liberalisation and increased global competition. The cluster is a Section 21 company and is governed by an executive committee, which comprises of industry leaders. The executive committee therefore plays an oversight role as well as ensuring that the fiduciary and administrative codes of good practice are met. Furthermore, World Class Manufacturing and Value Chain Alignment programmes are governed by technical steering committees that comprise of executives from member firms. These technical steering committees determine focus areas and activities within each of these programmes. In this way, the cluster is designed and driven by industry. This also ensures that the content of the cluster is dynamic and meets the ever-changing needs of the industry.