New dye house boosts job creation
In 2009, the company embarked on an expansion project that would see it build a new dye house over the next five years to expand its product offering. But subsequent to installing the first machine, Rotex saw an immediate benefit and wanted to complete the project sooner.
"At the time, the Industrial Development Corporation (IDC) through its textiles and clothing strategic business unit began offering funds to local companies in the sector who were expanding their businesses. We applied and, after completing their due diligence, the IDC made approximately R13.9-million available to us," says Sam Schaffer, the managing director of Rotex Fabric.
The funds allowed Rotex to complete the installation of the dye house within a year. This resulted in the company becoming more efficient and competitive in challenging market conditions.
"The support of the IDC in the sector is critical to aid companies in their expansion and regeneration of capabilities. It has been very difficult for the local textile industry in the past decade but through the assistance of the clothing and textiles competitiveness programme of the department of trade and industry managed by the IDC, and several of its initiatives, we have been able to weather the storm," adds Schaffer.
The manufacturing competitiveness enhancement programme of the IDC offers incentives for existing manufacturers that are designed not only to promote competitiveness in the manufacturing arena, but to ensure job retention.
It consists of industrial financing loan facilities managed by the IDC and production incentive (PI) grants administered by the department of trade and industry. While the finan- cial injection plays an important part, the PI grants are critical for the growth of the sector in South Africa.
The PI grants comprise several elements. On the capital investment side, it is designed to support capital investment in equipment upgrading and expansions that will lead to increased productivity and competitiveness. There is also a green technology and resource efficiency improvement cost-sharing grant to support enterprises with green technology upgrades that lead to cleaner production and energy efficiency.
The enterprise-level, competitiveness improvement, cost-sharing grant is designed to enhance conformity assessments and to improve processes, products and energy. It is also designed to produce cleaner production audits and related skills advancement through the use of busi- ness development services.
"This has enabled us to get new equipment that is more energy- efficient, develop new products, and remove unnecessary costs from the process to offer our customers better value," he says.
But despite these interventions, Schaffer says the industry is still battling with the high number of illegal imports.
"This needs to be addressed so that we can operate on a level playing field with the rest of the world. After all, manufacturers are all using the same water and the same equip- ment for the most part. The difference comes in with input costs," says Schaffer.
He feels that ever since Rotex has moved to just-in-time manufacturing it has been able to compete better with the overseas manufacturers. What has also helped is the fact that Rotex is a niche player in the market.
"The dye house has enabled us to dye fabrics within 11 days of receiving an order from our customers. In turn, they can supply the retailers with finished products within 21 working days, resulting in a 32-day cycle. This is in sharp contrast to the five to six month cycle of Chinese manufacturers," he says.
Ultimately, without the support of the IDC, this reduction in turn-around time would not have been possible.
This article was supplied and approved by the Mail & Guardian's advertisers. It forms part of a larger supplement.