In the early 2000s, soft furnishings supplier Republic Umbrella was in dire straights with competition for customers stifling its business. This forced company management to rethink their business strategy, which resulted in the creation of a new division called NG Screens.
“We needed to find a point of differentiation and this is where we came up with the idea of NG Screens to backward integrate our business in Republic Umbrella,” explains managing director Guy Humlin.
A capital injection
After the company heard about the MCEP incentives, it applied for funding and was granted an injection that allowed Republic Umbrella to bounce back.
Humlin says it used the roughly R5 million in funding to buy capital equipment and set up the newly-created NG Screens division. This led to 15 new jobs being created, and the rapid scaling from zero production to making nearly 65 000 units a month.
This new division, which is located on the same premises as Republic Umbrella, manufactures everything from patio and scatter cushions, to umbrellas and pet accessories. Crucially, it’s secured distribution through popular retail chains including Mr Price, Makro, Game, Edgars, Woolworths and Builders Warehouse.
NG Screens also has an art unit that designs prints for the cushions.
Local creativity wins customers
“We present our artwork to various customers who then select what they want and then we go ahead on their orders to print the fabric,” Humlin says.
This has been a key point of differentiation for the business that has allowed it to produce something unique for its customer base.
“They can’t go and import this product from the Far East or elsewhere. It is uniquely South African from South African artists. Our cushions feature typical things like ‘Love Our RSA’, the rhino, buffalo and Mzansi colours.”
None of this would have been possible, however, without the funding from MCEP, he adds.
“That is absolutely for sure. We would not have had the courage without their backing to go ahead and embark on this venture, bearing in mind that at the time when we conceived of the strategy we were not making even one cent in turnover in that particular field.”
Besides creating 15 new jobs, the MCEP funding has helped the company to be more competitive, Humlin says. The incentive helped to bring down the capital cost of the investment “to within a competitive realm to dissuade our competitors from going to purchase overseas”.
“In some instances, your unique design is simply not enough to differentiate you from your competitors. It has to be not only a design but also on price.
“We fulfilled one leg on design and then the price was the next issue which the dti helped us to fulfil. If you supply Mr Price you know you are globally competitive.”
Of the company’s future, Humlin says it is investigating the purchase of another machine to effectively double their capacity. And there are talks with British and Australian suppliers who are keen to buy soft furnishings from NG Screens. “We will design, print and manufacture for them,” he says.