 STRATEGY |
| INTERVIEW OF
MR VIGIER DE LATOUR, DIRECTOR OF FLOREAL KNITWEAR AND CHAIRMAN OF THE MAURITIUS EXPORT
PROCESSING ZONE ASSOCIATION |
10th NOVEMBER 1998.
Q. Could you give to our readers a brief historic of background of your company,
Floreal?
A. We are in fact one of the oldest established and one of the largest textile
groups in Mauritius and we are also a pioneer in the regionalisation of the textile
industry because we were one of the firsts to invest in Madagascar in 1989. Floreal
started its operation in 1972, it was Chinese and Hong Kong owned, in fact the company was
owned by OPE ( Oriental Pacific Export) and those first owners run the company for two
years and wanted to sell the company in 1974 this is when Deep River Beau Champ which is a
sugar industry in Mauritius, established for more than 100 years, decided to buy the
majority of the shares of Floreal Knitwear by the end of 1973 beginning of 1974,Floreal
Knitwear became 100% Mauritian and our primary product is knitwear, we manufacture
sweaters we have a reputation mostly for 100% wool and now 100% cotton ; so it’s
more like natural fibres oriented manufacturing industry. We are vertically integrated
with a Spinning Mill, which was set up in 1978 known as Ferney Spinning Mills. We buy the
raw materials from Australia, New Zealand and South Africa and spin the yarn in Mauritius
and provides the yarn to Floreal to knit and make up the sweaters, so the whole production
process of knitwear from spinning to delivering to our final customers.
Q. Not too precisely but what were the financial results of your company last year in
terms of turnover?
A. When we talked turnover we talk of the group I have just talked to you about the
knitwear production now let me talk to you about the diversification that we have done
within Floreal and then I will tell you the turnover because apart from the Ferney
Spinning Mills and Floreal Knitwear which is the knitwear operation integrated with the
Spinning Mill. We have bought in 1988 a T-shirt factory called Tropic Knits making cotton
T-shirt and polo shirts in primarily 100% cotton. This factory has grown very rapidly and
become a major exporter of the group so we have two exports NTT which are Floreal Knitwear
producing: 4.5 million sweaters in Mauritius and 2.5 million sweaters in Madagascar makes
a total 7 million pieces of knitwear and then we have Tropic Knits which produce 8 million
pieces of T-shirts and polo shirts and all kinds of jersey and light knit cotton in
Mauritius and 5 million pieces in Madagascar, so in terms of number of pieces Tropic Knits
is bigger today than Floreal but in terms of turnover of course because of the unit price
of the articles Floreal is still bigger than Tropic Knits and also own a brand name in
France, Harris Wilson which operates 12 shops and about 100 concessions in big department
store like the Galeries Lafayette and the Printemps. We therefore come to a total turnover
of about 120 million US dollars.
Q. Your Company has been demonstrating a real leadership in your sector could
you tell us where is your main guidelines of your main guidelines of your strategy and the
best opportunities for the future growth of your company?
A. From the right beginning we have insisted on the diversification of our
marketing network, which is of course oriented towards Europe because of the LOME
convention. Our products can go into the European market duty free and quota free among
the European countries where France has always been our number one market but we have made
the effort since the beginning of the 80’s to sell to the US although we have been
under the quota as from 1981 – 1982. We are paying the same duty the same as a legal
producer far east of the countries in the world. So we have made a marketing effort to
sell to the United States, so today Europe still represent about 80% and 85% of our total
export but US represent over 15% and is growing towards 20%. We forecast 20% turnover for
the group into the American market for the next year.
Q. Which part of America was it East or all America ?
A. It’s all America, we work with big retailers like the GAP, like Eddie
Bauer, The Limited, Abercrombie & Fitch ,J Crew. Those people have thousand of stores
all over the United States we work mostly directly with the specially stores and with the
catalogues. We have also always insisted in the quality of the products that we are
offering to the market from the beginning. We have a good reputation in terms of quality,
not only quality of the product but also quality of service. We have "strong"
marketing teams with also a lot only quality of product but also quality of service. A lot
of emphasis is put on communication with customers; we have people travelling around the
world shopping for new customers. We have a design team, which has also been strength from
the beginning that we have always made research of new yarns, new products, and new styles
that we gather information on other countries of the world specially Europe and US and
this team in Mauritius backed up by stylists from France or stylists from England is
making two collections per year, so we have made the effort to create our range –this
has nothing to do with Harris Wilson. Namely Floreal and Tropic the factories themselves
are presenting their range twice a year to customers for autumn/winter spring/summer
besides that we have as I told you before a brand name which we have bought in France two
years ago called Harris Wilson and this brand name has its own styling team and also
developing shops giving us more ideas and more motivation within the factories to go
further ahead on the development of our products.
Q. The policy of the MEPZA is to improve competitiveness to control quality, to improve
innovation do you think that Mauritian textile is still competitive and what could be done
to improve competitiveness of your sector?
A. I think the best proof that Mauritian textile is competitive has been the growth
seen in our sector. We have been growing nearly every year except there was a stagnation
period between 1991 and 1995 where about hundred companies have closed down in Mauritius
some of them were very small but anyway we have seen companies closing down or moving out
of Mauritius since 1995, 1996 it seems that the Export Processing Zone which is primarily
textile 85% of the export are textile; 89% of the employment is in textile companies, we
have seen a growth of between 7 and 10% every year of the Export Processing Zone and this
growth has been mainly through the textile exports our growth of exports to the United
States from 1997 to 1998 is going to be over 25% in terms of volume so this prove that
even though we are on a level playing field in US because as you know the Africa Bill has
not been voted we are considered we are being seen by American retailers as being a very
valuable place I would insist more on the value of the product beyond the price of the
product today ; customers do not only look at the price they look at the service the
flexibility, the security, the innovation, also the communication all these factors are
very important in the global textile trade business.
Q. What were the results of your last visit to the US?
A. You know I go the US once or twice a year. Last time I went was quite special I
was accompanying the Prime Minister on an official mission just after he spoke at the
United Nations, we went to Washington to meet some senators and congress men and people
from the State Department to talk to them about this Africa Bill and the actions that we
have been doing in Mauritius and all the benefits that could be brought from that bill for
Africa telling us what role Mauritius has been playing since few years that we have
started here with the textile industry and what role we can play in the future we see
ourselves more like a sort of catalyst like a central platform that can control and
mastermind the logistics behind the manufacturing.
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Q. There is no doubt that Mauritius is a bridge
between Asia and Africa
A. Yes, but also a country that already has a know how, has the marketing ability
and the production techniques if you want has built up a very strong reputation as far as
a textile producer we are the first textile manufacturer and exporter in Africa and with
this know how and reputation we think that we can develop further the textile business in
those African countries which are neighbours of Mauritius to carry on what we have already
started in Madagascar we are now looking at Mozambique, Lesotho, Botswana, Namibia,
Swaziland all those countries which have large pool of unemployed labour and which America
want to help by trade.
Q. By trade or may be also by investment in those regions?
A. Investment as well as we said when I was in Washington before I had the occasion
to meet representative of the American domestic industry the ATMI and we have invited them
to come to visit us in Mauritius we have encouraged them to invest in Africa because you
also have a lot of know how in terms of textile in US specially in the spinning, the
weaving and the dyeing in all those capital intensive operations and we hope that the
Americans will invest in those African countries which represent a real potential today.
Q. Are there already some results, some contacts?
A. Not yet, we have not seen any US textile industry coming to see us in Mauritius
or wanting to go through us for example investing in Africa may be they are in contact
with other counter parts in South Africa.
Q. I would like to know how far is this regional development project for the moment and
specially the textile industry?
A. You know it’s just starting as I told you we have made the first move as
Floreal in 1989 when we set up Floreal Madagascar today we employ in Madagascar about
5,000 people in our with the knitwear and the T-shirt and overall Mauritian investors in
Madagascar and also Chinese people who were here, who have now partly moved to Madagascar
employing 20 to 25 thousand people in the free zone in the Export Processing Zone of
Madagascar an this is namely textile the movement has already started in Madagascar, there
are also some projects in Lesotho as I told you we are looking at other countries.
Q. Is the quality of your products the same in Madagascar as in Mauritius?
A. Exactly the same we make sure that is why if you want Floreal has been
successful on the international market because we have always maintain a very a high of
quality and we would not allow our production units in Madagascar to make an inferior
quality right from the start we have set up a standard we got the license from the IWS
(International Wool Secretariat) we have been a license from the beginning of the
operation there and I must say the labour in Madagascar has given very good results is
very conscientious, very dextrous but they are slower than Mauritius, they do not have the
same productivity as here overall we can say that they are 20% less productive than the
Mauritian workers but in terms of quality they are may be even more cautious.
Q. Mr Lapidus came here just few weeks ago I am sure you have met him what was his
opinion about your company?
A. I have met him when he was here, he was quite impressed by the overall not only
by our company, by the textile industry in Mauritius he was impressed by the level of
product we are making the technology that we are using in the factories we used to say
that the textile is low skill industry but when we see the type of electronic machines
program by computer with screens with immediate transfer from the screen to the machines
or even we receive a fax from customer with a new design within 24 hours this design is
transformed into a sweater not low skill anymore for me its high skill. Into a lot of
electronics like your computer here we are linked with customers by e-mail they are
sending us faxes and we are transforming these faxes into sweaters or into T-shirts within
a few days due to the electronic systems that we have now in our factories so Mr Lapidus
was impressed by that he was impressed by the level of quality and the sense of innovation
the effort that Mauritius industry is doing always remain very close to the fashion trends
we are not just sitting there in our showroom, in our factory and telling the customer you
can do whatever you want bring us some samples, bring us ideas and we will produce them
for you, we do not have this attitude so we are just of course we produce what the
customer wants, extremely well organised in terms of his package but we offer to the
customer a range of design, style and Mr Lapidus has some ideas in Mauritius normally so
we are just analysing the ideas at the moment .
Q. Mr Vigier De Latour our readers are always interested in new business opportunities
in which areas of the activities are you interested to have partners or interested to
attract investment?
A. We are in the textile business as I say from the beginning we intend to stay in
this business so but we know that it’s moving ahead which is like we have to work for
constantly upgrade the level of the product in Mauritius because of the wages, because of
production cost at the same time we are integrating other countries which are lower cost
countries as I just told you the neighbour countries of the African region, so we are
interested to make joint ventures with the European producers who want to invest further
with us in those countries or we have been talking also to Indian producers because we buy
a lot of yarn in India so we are as I say at the beginning also inviting any American
producer to come to Mauritius to visit us to see what can be done not only with Floreal
but also with the other companies in Mauritius we are buying machines from America
licensees like Monarch/Fukuhara.
Q. You have been a expert in that textile industry but as more personal issue what have
been your more satisfying personal achievements since you have been the director of
Floreal Knitwear.
A. I am the director in charge of marketing and international operations you know
so my personal satisfaction has always been to sell to a greatest number of customers to
have a great commercial and also personal relationship with our customers and to really
build up a partnership and today we have partners we do not have only customers we have
partners in Europe in the US with whom we grow successfully together so my greatest
satisfaction has been more on this commercial side and has been creating true partnership
with customers.
Q. As a final issue what would be your final message to our readers?
A. A message could be that we say at the beginning Mauritius is not only good for
the beach or the coconut trees there is serious industry on this island which mean
business and we hope to be able to attract in the years to come more and more customers,
investors and partners as our intention is to keep alive here a manufacturing base. That
the manufacturing will give way to the financial services and information technology and
tourism but I think that as long as we will make textile in Mauritius I think it will be
for a long time. I do not see any sunset in the textile industry at the horizon I think we
will keep alive a manufacturing base in Mauritius and we hope that your readers will not
only come visit us and relax on our beaches but will come to invest and do business with
us but they have to know that they can do both. |
