This is how Falke's SA factories survived the invasion of cheap Chinese imports, hired 100s of workers and made 24 million socks a year
- The German company Falke's two South African factories have survived the meltdown in the local textile industry in the 2000s by developing a niche market.
- The local operation produced over 12 million pairs of socks and fine hosiery in 2017, increased its workforce by over 50% in the past 10 years and is planning to expand to Australia.
- The company's biggest challenge is keeping up with local demand, and finding the right skills to operate its machinery.
By developing a niche market, Falke South Africa managed to survive the arrival of cheap Chinese imports and grew its operations exponentially over the past five years, says Martin Grobbelaar, the group’s general manager.
The 40-year-old company, a subsidiary of the German-owned Falke, produced over 12 million pairs of socks and fine hosiery in 2017, increased its workforce by over 50% the past 10 years and recently announced that it is expanding to Australia.
In the early 2000s, heavily subsidised, cheap Chinese textile imports made Falke products uncompetitive in the local market.
“We soon realised that to get the 'price respect' for the quality of ur product, we would have to not only concentrate on clearly differentiating our brand from commodity imports from the East in the local market, but also look at markets beyond our borders,” Grobbelaar told Business Insider South Africa.
“By continuously building on our brand pillars of quality, innovation, modernity, reliability and consistency, we have been able to create and grow a niche market that did not compete with the commodity products from the East."
“Our biggest challenge at the moment is to supply the demand - which is a good problem to have.”
Falke’s first South African operations started in 1974 in Atlantis, Cape Town. Initially, the factory produced high-quality yarns for the local carpet industry.
In the early 80s, a decision was made to enter the local sock market and build a factory in Bellville.
The company currently employs over 450 people in Bellville to operate 350 knitting machines, and 185 people in Atlantis to operate 78 knitting machines to specifically produce fine hosiery.
Some 74% of Falke SA’s socks are sold locally, and 26% exported to markets such as the USA, New Zealand and now also Australia.
Grobbelaar says the biggest challenge to the South African textile industry, apart from growing local demand, is a national skill shortage.
He believes the government has done a lot through various incentive programmes to help the local industry gain access to the latest technology, but skills are required to manage and use the technology effectively.
“With the local textile industry shrinking to the degree it has over the past decade and a half, employment and growth opportunities for young, talented individuals have also been limited,” Grobbelaar says.
“Although we still attract some of this talent, we desperately need more [employees] who we can equip with the required skills.”
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