Thinking outside the box

Thinking outside the box

MASERU – IN 2016 Justin Lebesa heeded CGM’s call for locals to partner with the factory to open outlets selling garments manufactured by the firm.
An employee of the firm and an entrepreneur on the side, Lebesa did not have the necessary capital to kick-start the project.
“I was rearing some broilers and selling eggs but the money I had was little. I could not afford the project,” Lebesa says.
However, CGM lent him a helping hand and thankfully, he did not need to seek a loan from the bank.
“I received three containers and M2 000 worth of stock to start my business,” Lebesa says.

Two years later, Lebesa’s business is doing well and he does not hesitate to encourage other young Basotho to grab this and similar opportunities.
In 2016 when the opportunity was availed, CGM also opened a shop at its premises and used one container.
Satisfied with the two pilot projects, the firm extended its shop and is still calling on locals to engage and grab the opportunity.

CGM, like many other textile manufacturers in the country, used to be dependent on the African Growth and Opportunity Act (AGOA), which enables African countries to export goods to the US duty free.

In 2012, the uncertainty surrounding the renewal of the agreement forced CGM to think out of the box and came up with a strategy for sustainability with or without AGOA.
“The delay in renewal of AGOA made us very jittery, we even had one buyer telling us that for the orders that were already placed if AGOA failed to be renewed, we would have to pay the 17 percent duty for the order of two million jeans,” says Madhav Dalvi, Group CEO of CGM.

“This could have forced us to close shop within a couple of months. It really pushed us to think and do away with the dependency on AGOA.”
Dalvi added that a strengthening South Africa rand, coupled with uncertainty of the agreement’s renewal and competition, made it difficult to export to the US.
After research and strategizing the company made the decision to stop exporting to the US. “Since 2013 we have not exported a single garment to the US. We have tapped into our regional market and we do not regret that decision,” Dalvi said.

Dalvi elaborated that the firm focused mainly on market and product diversification. Exploring the regional market, the firm decided to focus on worn bottom pants.
“We learned that in a year South Africa imports 700-800 million garments and realised that there was really no reason to remain dependent on AGOA. We then redirected our five and a half million garments to South Africa.”

CGM is now one of the biggest worn bottoms in the southern hemisphere, producing five million garments a year for big retailers like the Edcon Group, Donna Claire, The Fix and Miladys.
According to Dalvi, the firm decided in 2016 to start a factory shop outlet to avail the precious garments to the factory staff and locals who did not enjoy the facility when the company was exporting to the US.

“Buyers would dictate what they wanted and then garments would be shipped, the workers who made them had no access to these pieces. When we started exporting regionally we started having our own styles and we only think it is fair to make them available to the locals who sweat to make these garments and for the locals to wear them proudly knowing that they were produced here,” Dalvi says.

He indicated that the idea to open an outlet for locals was reinforced when a lady used to go to the factory to buy garments from as little as M300 but with time the amount increased to between M3 000 and M4 000. “We saw that our people also love our products. We even have a local label called Khabane for men and Nubolt for work-wear,” Dalvi says.
Dalvi says those who are willing to start outlets should approach the firm.

“We are not just creating jobs here at the factory but we also want to create jobs through outlets selling these garments,” Dalvi says.
He pledged that the firm will donate 2 000 garments to orphanages.
Speaking at the launch of the new programme, the Minister of Finance Moeketsi Majoro said that it is time for textile manufacturers in Lesotho to bring back the control of their companies into the country.

He said this is important so that they do not remain beholden on Asia, the United States or Taiwan.
Majoro said there are currently seven textile companies that are working hard to reassert their independence.
He urged locals to get involved in the industry.

Majoro said producing for the United States comes with several risks such as that of not having control over garments as such control would lie in the hands of buyers in the US and operators in Asia.

Lemohang Rakotsoane

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