Textiles firm finds a competitive niche

INLSA

Mike Donegan and Suraya Tewary, the joint owners and directors of Opus1, a local home textiles manufacturing company based in Tongaat.

The SA textile industry may be down, but it’s not out. Many big companies may have closed down in the face of stiff competition and the flooding of imports from the East, but there is space in the market for small and medium enterprises to operate as niche outfits.

That’s the word from the directors of Tongaat-based home textile producers Opus1, Suraya Tewary and Mike Donegan, who have proved that the business can be profitable and create jobs despite the odds. Opus1 has a turnover target of R54 million next year and has secured a small grant from the Gijima KZN local economic development support programme.

The duo have been in the game for three decades and have seen how the industry has been almost decimated with some 50 local companies having closed down and more than 80 000 jobs lost between 2004 and 2010 alone.

Tewary and Donegan were in management positions in various major textiles firms including David Whitehead & Sons, Frame Textiles and Mooi River Textiles. All three eventually closed down.

Now ironically they’ve almost come full circle, operating their business out of Tongaat where David Whitehead & Sons was once based, and have bought the Mooi River Textiles brand after the manufacturing business closed down.

“Following stints at the other companies in 2005 Tewary and I held senior positions at Mooi River Textiles, which was owned by the East London-based Da Gama Textiles Group.

“In 2006, realising the industry was in trouble and not having the power to make decisions to adapt to stay in the game, we decided to go out on our own and started our own small business,” said Donegan.

“We started Opus1 out of premises above my garage at my La Lucia home and later moved to a bigger premises in Glenashley.

“The Mooi River business was close to our hearts and it was sad to see it shut down with the loss of many jobs. It was a highly respected name in the industry,” he said.

“With our combined depth of experience in the textiles industry – Mike in the marketing and management side and I in textiles design as well as marketing – we had serviced the retail sector successfully for many years,” said Tewary.

“We had the contacts and thus could service the immediate requirements of leading home textile retail chains such as Woolworths, Edgars, Mr Price, Wetherly’s and Loads of Living… We started small and did not take on more than we could handle, but these retailers have been very supportive of our business,” she said.

“Initially our product manufacture was outsourced to local cut, make and trim plants. However, when Mike and I were able to buy the Mooi River Textiles brand, we moved to Tongaat, where we could manufacture our own ranges,” added Tewary.

Donegan said: “Three years ago, in a twist of fate, we had the opportunity to buy the Mooi River Textiles brand and the customer base. We did and 18 months ago we moved to these premises with just 11 employees and one manufacturing line. Today, we employ 116 people and have eight manufacturing lines.

“It is a small operation compared to the big vertical textile manufacturers we worked for in the past, but we are flexible and have fewer overheads. We are not top management heavy and operate this business as a family with our workers,” he said.

Tewary said a vertical operation had advantages and disadvantages, especially in a country such as SA. Vertical manufacturers essentially undertook design, then spun the fabric and manufactured products such as sheets and curtains.

She added that the Opus1 business was not afraid to buy quality fabrics that where spun cheaply overseas in countries such as China, Pakistan and India.

“This is one of the ways we have adapted to make our business work, be profitable and create jobs. Our products are South African creations. In fact, Opus1 is a design-led company. We do fabric designs in-house and have secured reputable weavers overseas to produce the fabric. It is then imported, and we manufacture products such as bed linen, curtains and other home decor items out of our factory in Tongaat,” she said.

Donegan said besides Gijima KZN, another perfectly timed industry support mechanism was the government’s special rebate on specific imported fabric for the manufacture of home textiles.

“It came into effect about two years ago. The government’s intervention through rebate provision Item 311.42, has enabled us to be internationally competitive. These fabrics that can be imported duty free from the East has enabled us to beneficiate them here in KZN,” he said.

From a turnover of R8m in 2009, Opus1 more than doubled this to R20m in the last financial year. Last year it produced 410 000 units and this financial year is targeting to double this to 950 000 units. Besides the local market, the company has also just secured a R1m order from neighbouring southern African countries.