It is possible to flourish in the struggling textile industry, writes Hendri Pelser

Michael Rademeyer had no other choice but to start a business when the company he worked for shut down.

And he was determined to succeed.

Michael Luke Clothing came into being in 2006 through a series of coincidences, good luck and sheer determination.

That one call

Michael explains that he had worked for a large clothing manufacturer for 16 years. The company closed down and he found himself working for a small manufacturer with a slightly unorthodox view on salaries - he did not get paid.

In the meantime, the clothing and textile industry in South Africa had been hammered by cheap imports and manufacturers were closing down.

"People thought I was mad (to start a clothing manufacturing business) - the clothing industry was in ruins and businesses were closing down," Michael says.

"Although my trade is a sinking ship, it is all I have ever done. I studied fashion and pattern making and I can't become a mechanic now. I had no choice."

But luck was on Michael's side. He received a call from an old client.

Navada manufactures and distributes clothing to independent retailers and they needed a subcontractor to make formal men's jackets.

"When the opportunity presented itself, I grabbed it. There is not a lot of manufacturers left who can make jackets - it is quite specialised."

Getting Started

With his order in hand, Michael secured a loan and with his wife, Brigetté, set up a factory in Hammanskraal, north of Pretoria.

He says they found themselves in a tricky situation: if they did not start the business, they would have lost everything they had; if it didn't work out, they would also have been wiped out financially. But, he says, this challenge created motivation and determination.

With his eight staff members and a couple of second-hand machines, the newly established Michael Luke Clothing got its first order out in time.

"The orders then started coming in because my client saw that quality was good and the deliveries were on time."

Michael's second-hand machines kept breaking down and he seemed to be spending more time fixing them than working on them.

"It was just a nightmare. I decided that every time I did a deal I would buy two new machines to replace the old ones," he says.

He adds that suppliers in the industry are paid weekly. This allowed him to generate enough cash for the new acquisitions.

Put the basics in place

Hammanskraal had once been a textile and clothing hub and Michael says setting up the factory in the area meant having access to skilled workers immediately.

Nevertheless, he still had to compete with cheaper imports and established local manufacturers but this is an area where he could differentiate: turn-around time.

Whereas his local competitors take between four and six weeks to complete an order, Michael Luke Clothing does it in two. Then, it takes a while for imports to be shipped to South Africa and if there is a problem with quality, it takes even longer to sort this out.

In addition, Michael Luke Clothing can immediately respond to changes in the fashion market by modifying garments as opposed to the lead time importers face.

Michael is also a stickler for quality and he believes this is a major cornerstone of the business: "There are a lot of people who think they can manufacture good-quality jackets, but there are few who can really deliver quality garments."

He adds that retailers and importers have even approached him in the past to fix imported garments with defects.

Becoming Sustainable

While Navada makes up 95% of the business's order book, Michael has been able to spread the risk and bring more clients on board. New product lines, such as women's skirts, coats, waist coats, corporate clothing and business uniforms, have also been introduced.

Michael is well on his way to create a sustainable business but he is definitely not out of the woods yet.

He says last year there were six clothing manufacturers in his area. Today, only three are left, while Michael Luke Clothing produces more than 200 jackets a day.

"Honestly speaking, I can go bigger (and expand) but I am weary. There will always be slumps in the market and if the expansion is too big, you sit with workers without any work to do."

As a result, he keeps his 100 workers busy and carefully manages his order book to ensure constant work comes in.

"It is a labour-intensive trade, so there are a lot of people problems to take care off. But, during the clothing worker's strike last year, the industry closed down while we carried on working.

"I have never had a stay away or a strike. If people need to work late, they work late. We have worked together for a long time and understand each other."

Thinking Cap

These nuances do not mean Michael is complacent. He is constantly looking for ways to beat competitors.

One area where he can compete is quality and he is looking at new machines to improve the garments produced.

Constant product development is another achievable differentiator.

"You always have to reinvent the wheel to have one up on a competitor in this trade. It is very easy to copy a garment, so you constantly change the pattern and change elements such as the collar.

"I want to be known as the top jacket manufacturer in South Africa."

This drive led Michael to make one of the scariest decisions a few years ago when a large order hit the factory. He had only eight employees when a large order came in - and Michael was unsure how he would be able to meet the delivery date.

"My manager and I went out and hired 60 people and it was the best decision I ever made - we got the order out on time and simply went on from there," he says.

This workforce grew to more than 140. But when the recession hit, Michael had to cut back his staff numbers.

"It was probably a bit of neglect on my side," he says, explaining that the workforce had grown beyond the manufacturing capacity.

He embarked on a productivity study and streamlined the manufacturing process to fully utilise the remaining staff members.

As a result, the business survived the crunch and is poised to grow again.

Your word is your bond

Service is a cliche in the business world, but it means a lot to Michael: "In South Africa, in my opinion, people don't take pride in their work and service is lacking.

"If you give someone your word (on a delivery date), then stick by it and deliver on time. I might be wrong, but it has worked for me."

This philosophy is not just applied to customers, but to suppliers as well, because a business cannot make anything if it doesn't have any raw materials.

"I speak to them every day and they are comfortable with me and trust me.

"They know that when I place an order, they will be paid."

He adds that maintaining a good relationship with suppliers also creates room to manoeuvre during difficult times as arrangements can be made more easily.

"To me, success is not having R1-million in the bank. Success is measured on how long you stay in business. I would rather trade immediate profit to be in business in 10 years' time."