Protective clothing manufacturer Sweet-Orr & Lybro has risen above the global financial crisis to buy out its equity partner African Merchant Bank’s 44,5% share in the company.
Sweet-Orr & Lybro MD Bob Griffiths says: “It is a statement of how well this company is doing. Our highly qualified and experienced management team is confident that it will continue to do so even in recessionary times.” The buy-out of its equity partner became effective in February, after eight months of negotiations.
Sweet-Orr took on an equity partner when it was looking to expand its business and establish its black economic-empowerment deal in the early 1990s. The company has since become self-financed with virtually no debt. “We have gone from a highly geared situation to an almost ungeared situation, managing not only to be profitable but also to grow,” comments Griffiths.
He notes that being wholly owned means that the company now has more flexibility to take higher risk type decisions on an exploratory basis and grow its market share locally and overseas. “We can be more aggressive in the marketplace now that we don’t have an equity partner, and we can put money into the new avenues that we are exploring,” adds Griffiths.
The company’s growth has been the result of its taking a larger share of the local market; however, exports have also become an important focus for the company. Griffiths points out that the company has been selling predominantly throughout South Africa, but that it is selling more and more into Africa, the Middle East and overseas. “The overseas market is looking exciting and there are opportunities the company is looking at,” adds Griffiths.
He reports that the company has not yet felt the effect of the economic slowdown, but that it is likely to at some stage. He notes however, that the company’s turnover is significantly up on last year’s figures and the company will deal with the effects by becoming more market and service driven, holding higher levels of stock to ensure quicker turnaround times on orders. The company will continue to keep overheads under control, exercising cost control during the difficult times ahead. “We’ve got a good spread of representatives throughout the country, catering to customer needs, and we will continue to penetrate the local market and keep close to our customers,” says Griffiths.
Since the start of operations in 1931, the company has faced and overcome a number of financial storms and survived in the clothing industry, which has been hard hit by cheap Chinese imports.
Sweet-Orr closed its nonprofitable leisure- wear division when Chinese imports domina- ted the South African market. The company replaced its leisurewear division’s 40% turnover with more protective clothing and increased its profit in the same year, significantly increasing the protective wear’s turnover. Griffiths adds: “We have developed our own way of operating, consistently supplying big customers and growing profits year-on-year.”
Situated in Elsies River, Sweet-Orr & Lybro was established to service the mining community in South Africa. The company has since grown and now services the petrochemicals and automotive industry as well as industry in general and has become one of the biggest protective clothing manufacturers in South Africa.