Batting for local manufacturing
Because of the need for teams and clubs to brand themselves in their own unique colours and logos, the sportswear industry lends itself perfectly to CTC Sports’ business approach of incremental growth based on high quality and intense customer service.
You wouldn’t guess that the small CTC Sports factory in industrial Maitland, Cape Town, is one of the few places in the world – and only one of two in South Africa – where cricket balls are made.
The unassuming façade of the three-storey building also hides an amazing success story of manufacturing growth in an era of importation and decline. 57-year-old sportswear and equipment manufacturer Reg Amos started his business from his lounge seventeen years ago while the first flood of cheap Eastern imports were decimating the local clothing industry and later the sports equipment industry.
Today, he employs 39 people in his factory and outsources regular work for a dozen other small workshops around Cape Town. Niche manufacturing, says Reg, is the key ingredient of his success. “I have done well in the clothing industry because I don’t target making a T-shirt. I make a T-shirt that is niche, where someone wants a T-shirt with one blue sleeve and one red sleeve. You cannot buy that in a shop.”
Because of the need for teams and clubs to brand themselves in their own unique colours and logos, the sportswear industry lends itself perfectly to CTC Sports’ business approach of incremental growth based on high quality and intense customer service. But as Reg’s story illustrates, it is a difficult business path to follow, requiring patience and years of persistence.
Reg grew up in Salt River, the heart of the Cape clothing industry and the son of a clothing worker father. He never even dreamed about owning his own clothing business one day, and trained as a boiler maker. “I was always a bit ambitious,” says Reg, describing how he quickly moved to the business side of the engineering companies he worked for, ending up as an estimator. Meanwhile, he also studied HR and production management in order to get into management.
Sure enough, in a break that shaped his life, he landed a job as factory manager for a small company that made cricket balls. It was later bought by rugby legend Morne du Plessis who was building a diversified sport manufacturing company at the time. Reg did not know it then, but it was the perfect learning curve for starting his own business. “I managed the factory from buying of the toilet paper to the leather, the hiring of staff. He gave me carte blanche: ‘there’s the factory – you sort it out’,” says Reg, and he set about producing everything from cricket balls to boxing gloves.
Apart from the nuts and bolts of running a business, he also learned a lot from Du Plessis’ inspiring vision to manufacture locally and the way in which he empowered people to build the company with him.
However, when Du Plessis sold the business, the vision changed, many of the lines were shut down in favour of imports, and Reg had to go through the humiliating process, along with his colleagues, of having to reapply for their jobs in the business they built. It was time, he realised, to do his own thing.
Because his new bosses did not have the appetite to take on new, niche products, they didn’t mind if Reg made small orders such as high-jump mattresses and karate mats at home. So, by the time Reg resigned and cashed in his policies and savings, he already had a small operation going in his lounge at home.
He had also built up a substantial network in the sports industry, which proved crucial from the start. Rugby coach and businessman Alan Zondagh helped to set him up in a small workshop and got him started with regular orders.
He began with sports equipment, but soon started taking on sport clothing orders, asking his retired father for advice on the making of clothes.
The main struggle as a new small company was to break into the corporate market, where the marketing departments constantly need to put their logos onto sports equipment, and to have sportswear and bags made in their colours. He was up against very established service providers, and Reg struggled for no fewer than seven years in a kind of hand-to-mouth existence. Two years in, he had to sign his home over as collateral for a bank loan to keep the business running.
His big break came in 2006. By that time, he had been knocking on the insurance giant Metropolitan’s door for years, and finally got a call one Sunday from a buyer asking if he could have 200 track suits made in corporate colours for delivery on Tuesday. They were let down by another contractor. Reg and his team worked through the night and delivered on time. Impressed by the quality and service, the buyer told Reg that he was the fourth business he had called for placing the emergency order. The three others said it simply could not be done.
The breakthrough put CTC Sports on a whole new trajectory, and over the next few years Reg found himself fulfilling more and more clothing orders, acquiring several state-of-the-art embroidery machines. It reached fever pitch as the World Cup approached and every corporate was ordering soccer jerseys for their staff. Reg found that he had to stop all his sport equipment lines to focus solely on clothes.
Meanwhile, bursting at the seams, Reg had to find new premises. He identified his current Maitland workshop and chose Business Partners as financier. Although by that time he could have chosen between many banks and financiers, he preferred Business Partner equity deal, where the financier took 30% co-ownership of the building instead of a hefty deposit, which he could put to better use in his operations.
After a period of being “consumed” by clothing manufacturing, Reg has started diversifying once again into the production of sport equipment. The opportunity came when the only local manufacturer of cricket balls went out of business. Recruiting the skilled production staff from the insolvent company, Reg set about building a production line and launched the brand Indwe last year.
Again Business Partners was his financier of choice for the R500 000 working capital he needed.
Seventeen years into his own business, Reg counts among his clients Western Province Cricket, Western Province Rugby and Supersport International. He is still brimming with ideas. His next project is to manufacture the cork innards for cricket balls, which are imported from India at present.
And Reg finds it outrageous that in a country as sport loving as South Africa, not a single rugby or soccer ball is made. He is determined to do something about it.