Quality clothing, straight from Botswana
Quality clothing, straight from Botswana Editorial: Christian Jordan Production: James Clark
B&M Garments opened in Botswana in 2000. Since then, the company has become a major supplier to the South African clothing industry and gained some high-profile clients. MD, Krishna Chinniah tells IndustrySA more about this challenging industry.
When producing something that requires quality, an eye for detail and, eventually, becomes part of your portfolio, you need a supplier that can be relied on; a supplier that can work to your schedule and fit into your way of doing things. Take the clothing industry for example; when a big name brand outsources its manufacture, there are strict requirements that have to be met or that manufacturer will not gain that order again. Your manufacturing partner becomes almost an extension of your business and if their product is lacking then your product is lacking, hence the need for a reliable partner who you can trust. Our manufacturing focus for this month comes from Botswana and B&M Garments, a clothing manufacturer with a long history in the industry. The company is now vertically integrated and Managing Director, Krishna Chinniah tells IndustrySA that even though times have been tough, the
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business is now performing well with some major South African brands trusting B&M to produce their merchandise. “Since 2008 we have focussed on the regional market which is South Africa, Zimbabwe and Botswana,” says Chinniah. “Today, Mr Price is one of our biggest customers. We also work with Style/Beaver Canoe, Exact, Fashion Express, Keedo and the Foschini Group. We also have some corporate customers in South Africa. “One of our biggest advantages is that we are vertically integrated. We import our cotton yarn and make our own cloth. This allows us to be slightly more competitive than the rest,” he says. “One of our other great advantages is that we are right next to South Africa so we have a shorter lead time compared to others. This has been one of our main marketing tools for the South African market. “We don’t compete on all types of goods. Our price is too expensive for large volume orders so we like to offer small orders with more added value that can get to the shop quickly.
With orders from China or India, you’re looking at a three to six month lead time but with us and the flexibility that we have, you could change colours and still get the delivery through in four weeks.”
INTERNATIONAL HISTORY B&M Garments has a long history and has worked for some of the biggest and most well-known names in the industry. However, following the global recession of 2008, the business was forced to re-evaluate its strategy and subsequently chose to focus on more local markets. “Originally we are from Mauritius,” explains Chinniah. “In the late 90’s there was a textile boom in Mauritius and buyers were looking for more capacity. At that time we were working for European buyers, specifically H&M. At the time, there was not enough labour in Mauritius so we looked at either Madagascar or Botswana as two alternatives. Labour was available in both these locations. “In the end we chose Botswana as the government was
offering labour subsidies, so for every job that was created, they would offer financial assistance hence we opened our factory in Botswana in 2000. “Our relationship with H&M continued until 2007 and the start of the recession. This put a lot of pressure onto prices and we could not meet the price expectations and price targets of some of the European buyers,” he says. “We had another European buyer, Bonprix from Germany, part of the Otto Group and at the beginning of 2007 everything was booming but it all came to a standstill in 2008 when the recession hit hard. “When we lost our European customers, we restructured the company and said ‘forget Europe, forget USA, we have a huge market next door – South Africa’. It was very difficult in the beginning but we slowly built it up.”
EFFECTIVE TRANSPORTATION Clearly, choosing South Africa as a target market creates many opportunities for a Botswana based company. The
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CompANY PROFILE facilities are closer, there is more flexibility and the lead times tumble thanks to B&M’s effective transport department. “Transport in Africa is very expensive and this forms a big part of our costs. “Working with South African retailers, all goods have to be transported into depots. For example, with Mr Price, all goods have to go through Durban. With Foschini, all goods have to go through Cape Town,” explains Chinniah. “We have our own trucks and this was one of our major investments. Having your own trucks gives you much more flexibility in your transport and logistics arrangements. “We take all our goods in our trucks to Johannesburg when we hand the goods over to a South African transporter and they will take the goods to Durban or Cape Town.”
“In the late 90’s there was a textile boom in Mauritius and buyers were looking for more capacity” Equally as important as timely deliveries, B&M represents its client’s brands so a focus on quality control is important. “A customer will give us their label to go onto the t-shirts so we are responsible for their brand,” says Chinniah. Even though this places a lot of pressure on B&M, you get the sense that Chinniah is not fazed; after all the company has years of experience working with huge brands from around the world. Having said that, Chinniah does report that textiles is a tough industry but he would be willing to invest should the correct opportunity present itself. “Textiles is a very difficult and complicated business. There
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are a number of factors that are beyond your control; for example, the Rand moving the way it is puts pressure on our prices and operations. “We can predict a very good year for 2014 in terms of our order book being full but the Rand depreciating will affect cash flow,” he says. “When expanding you have to be very careful. You have to think twice before making decisions on expansion in textiles. You have to look at what you have and maximise what you can use. Our expansion will probably come through us developing more product lines. “Investment into new equipment will come and it depends on the demands from our customers. If our customers require something new or there is an opportunity in a market to add to our turnover then we will always consider investing.”
GROWTH B&M Garments produce currently finds its home mainly in South Africa (70%), Zimbabwe (20%) and Botswana (10%). However, while the current economic climate doesn’t lend itself to trading in European markets because of the weakness of the Rand, Europe certainly does offer vast opportunities for a company like B&M. And with Chinniah, and his years of experience, at the helm you would suspect that any growth opportunity would be well thought out and planned meticulously. “I have a chemical engineering degree,” he says. “I worked in the UK for seven years and then moved back to Mauritius. There were not many opportunities for a chemical engineer so I had to join the textile industry. I started as a quality assurance manager and then moved into production management.”
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Clearly, the markets over the borders have tremendous potential. In the local market in Botswana, there are only 1.6 million people. South Africa has 50 million people and Zimbabwe has 12 million people hence much more opportunity for expansion. To date, B&M has invested around P20 million in its operations in Botswana and with global economic conditions now beginning to look more favourable, it seems as though B&M has a bright future in southern Africa, and potentially further afield.
“If our customers require something new or there is an opportunity in a market to add to our turnover then we will always consider investing” FEB 14 PAGE 5
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