Zorbatex

Z O R B AT E X

ZORBATEX

Zorbatex Excited About Future

in Southern Africa PRODUCTION: David Napier

Zorbatex towels are sold around the world. Their quality is recognised as some of the highest in the industry. The KZN-based company stays at the forefront of the market in terms of design and innovation, and it has a workforce that is the envy of many competitors. Managing Director, Mike Wood tells Enterprise Africa that rather than looking bleak, like much of the industry, the future is looking exciting…

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While South Africa’s textile industry continues to face challenges the likes of which it hasn’t witnessed before, there are a handful of companies that are bucking the trend and managing to thrive in these extremely tough times.

And make no mistake, times are tough. Minister of Economic Development, Ebrahim Patel wrote an

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article for the Journalist describing the decline of the industry in the past two decades: “At the beginning of 1996, South Africa had about 266,000 clothing, textile, footwear and leather (CTFL) workers. By the end of 2011, the numbers had more than halved; we had only 100,000 workers,” he wrote. “For some time, local clothing, textile and footwear factories had not adequately invested in

new machines and processes or trained workers sufficiently. Nor did most of them develop competitiveness against cheap imports through improvements in design, innovation, quality and speedto-market,” he added. Imports from the East (mainly China) took up the residence on store shelves as SA produced goods fell away. But thanks to a new industrial policy, introduced by government in

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INDUSTRY FOCUS: TEXTILES

2009, SA players have managed to recapture some market share. As an industry that has the ability to create a lot of jobs very quickly, the manufacture of CTFL in SA had the potential to boost the entire economy, hence the government’s intervention. Since 2009, a number of initiatives have been put in place to protect and enhance the industry and it has had some positive effects imports from China have slowed, job numbers have stabilised and sales of locally manufactured CTFL products have increased.

But there remains much more to be done to improve the future outlook for the industry.

One of the companies managing to realise success in these tough times is KZN-based Zorbatex, SA’s leading manufacturer and distributor of towelling products. In order to capitalise on the success it has created in the past few years, Zorbatex is looking at strategies to increase and strengthen its presence in continental markets, mitigating against any further slowdown at home in SA. “Make no mistake, the economic environment in SA is tough,” says Managing Director Mike Wood. “The retailers are not trading particularly well and that’s why we’ve intensified our export focus. We need to diversify in terms of markets, hence our focus on Africa.

“We have a strategy and we’re fighting the good fight. We’ve been subject to the vagaries of volatile currency and politics but you have to get your head down and focus on sound business principles to move forward. It’s been hard work and we’ve had to ensure we make the right decisions.”

EXPORT Wood explains that expansion into African markets fits the focus of Zorbatex as an African business.

“I’m excited about the future and I’m excited about Southern Africa. We see it as the market of the future and we’re seeing rapid development from an

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infrastructural and trade point of view.

Levels of disposable income are rising and being right here in Africa, we are well-positioned to service the market.

“We’re very African-centric and we source all of our raw materials from Southern Africa. We’re very keen to grow our market in Southern Africa and we’ve already realised opportunities in Namibia and Zimbabwe and we want to move further north into Zambia, Tanzania and Mozambique. We have a presence in those markets through third parties – wholesalers who have taken our products there. Other countries, like Ghana and Nigeria, we haven’t even touched and they present huge opportunities,” he says.

As a turnkey supplier of products including beach towels, bath sheets, bath towels, hand towels, guest towels, baby napkins, face cloths, dishcloths, and many more, Zorbatex’s reputation has taken it into international markets.

“We’ve recently started supplying to the Netherlands,” explains Wood.

“Other areas in Europe can be highly competitive but we have set our sights on improving our share in Europe.

Previously, we exported to the USA although that has cooled recently. We supplied five chain stores in the US on a regular basis and we hope to regain that business soon.”

The slowdown in the SA economy (entering technical recession in 2017’s first quarter and still rated at junk investment grade by some international credit agencies) has resulted in adaptation by many textile manufacturers as retailers and wholesalers look for speed and turnaround time to fill quick-changing consumer needs.

“The average South African has less disposable income and we’re seeing food and groceries taking a bigger portion of spend. Retailers want to take less risk and are moving into quick supply arrangements with suppliers who can offer it. It’s about fast fashion; being able to design something and move it in and out quickly. They are ordering more often

but smaller quantities and more bespoke and, in some respects, that plays to our strengths,” details Wood.

QUALITY Over the past 30 years, Zorbatex has developed a continuous improvementstyle approach to business. It invests constantly in new machinery and seeks endless product innovation to ensure that quality and customer satisfaction remain as high as possible. Right now, the company is working on a number of projects to improve quality and prepare the business for a long-term future.

“We’re working on several strategies right now,” details Wood. “From a technical perspective, we’re busy with projects to reduce our environmental footprint - we want to use less energy and water. We want to remain at the front of industry in terms of technology in the textile business and so we’re always buying new machines that can produce something better, cheaper, faster or higher quality. We’ve noticed that the market is becoming more bespoke; every store wants a different brand or different design so we have our own design studio and they’re continually working on product development and technical excellence. Every year we are reinvesting in the company and updating our plant and that’s one of the reasons that we survive against an onslaught from cheaper producers in Asia.

“Importantly, we’re fully automating our dye house in terms of chemical dispensing, water saving and heat recovery and we hope to have that project complete by the end of the year,” he adds.

With demands from retailers become more complex and difficult to satisfy, suppliers need to be nimble and flexible with products. They need to be developed with the end-user in mind, and sometimes before the end-user knows they need them. Zorbatex’s investments into technology and machine upgrades allows the business to remain fast and efficient and this is why Wood is keen to see the company stick to

ZORBATEX

its core strength and not venture out of its lane at this stage.

“We want to stick to towelling; I don’t want to start expanding into sheeting or something new; I’d prefer to stick to our strengths,” he says.

“Consumers want something different and we’re seeing that come through in the home textile industry. For example, the kitchen is now probably the most expensive room in the house and people want fashionable garnishing to go with it; that’s why kitchen towels have become an important part of our business.”

HISTORY The history of Zorbatex goes back further than the aforementioned industry troubles, and so the company and its management has a lot of expertise in dealing with slow markets, political upheaval, and changing fashions and trends.

“The company is 34 years old,” says Wood. “It’s a family run business and was started by my father. He was an accountant and he got involved with a textile company before they asked him to get onboard in a more official way.”

Currently, Wood and his brother head up the management team, taking over from their father and maintaining an appetite for ambitious expansion and sound business principles.

“We’re based in Ladysmith KZN,” details Wood. “The origins of the business are in Pinetown, close to Durban, but we moved to Ladysmith to take advantage of the infrastructural resources that are here. We have plenty of land, plenty of factory space, plenty of labour, plenty of water, and we’re halfway between the two major markets in South Africa on the main transport link, the N3.

“The focus of the business was originally in the kitchen area, doing kitchen towels and tea cloths before expanding into bathroom towels. Our latest expansion has been into jacquard towels. We make high-fashion jacquard beach towels which we supply to all the major chain stores in SA,” he says.”

A major employer for the region, Zorbatex is home to around 400 members of the KZN community. Wood says that the company is a big contributor to the economy by vastly upskilling the local community and this will continue in the future. “In today’s environment, every company needs to be completely ethically compliant in terms of labour regulations, bargaining councils and government laws, and we pride ourselves on meeting all of those and being able to meet the most stringent audits.

“Our policy has always been to train.

We’re heavily involved with SETA and we’re continually putting apprentices though our business – we spend a lot on training. We have people who started out as basic clerks and who are now managing departments and have their degrees or Technikon qualifications,” he says.

Through this approach, Zorbatex has

developed a workforce that can compete with the best. It is adept at changing direction quickly, using different materials and ideas, learning new skills for new machines, and meeting design needs from tough customers. With the growth of the company’s export offering, the business case at Zorbatex looks strong.

With retailers still suffering at the tills, the question is will demand continue to flow through to Zorbatex. Wood is unequivocal in his reply: “We’re very excited about the future and expect to grow year-on-year as we have for the past three decades.”

ZORBATEX (+27) 036-6310526 mike.wood@zorbatex.com www.zorbatex.com

partnering ZORBATEX for all their towelling wet processing requirements

Terry Cloth Process and end-user-related functions | pre-treatment | dyeing | finishing |

RUDOLF GROUP SOUTH AFRICA - RUDOLF CHEMICALS (PTY) LTD. 17, Progress Road - New Germany 3610 - P. O. Box 2395 - Pinetown 3600 Tel.: +27 (0) 31 7058961 - +27 (0) 31 7058962 - +27 (0) 31 7058963 -Fax.: +27 (0) 31 7058964 E-Mail: rudsales@iafrica.com - www.rudolf-group.com

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Issue No.61

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JEGIE PADMANATHAN:

People Are The Power

of Bidvest Prestige ALSO IN THIS ISSUE:

CCI South Africa / Thebe Tourism Group / RPP Developments / ALG Estates

A S F E AT U R E D I N

ENTERPRISE AFRICA

AUGUST 2017