Timex-Fergasam Group

Sri Lanka's Timex-Fergasam Group likes to calls itself a "quiet" company. It is only upon closer listening that one hears the buzz of activity.

 

At a time when many garment companies are bowing out of the business in Sri Lanka, Timex-Fergasam, specialists in women's dresses and intimate apparel, is exploding with activity.

 

Over the past two years, it grew from 10 to 18 factories and doubled its work force. The growing heat of competition from regional manufacturing giants such as China, Vietnam, India and Bangladesh has not cooled the company's interest in the apparel business. In fact, it's done the opposite: the company is turning regional threats into business opportunities.

 

A little history The Timex-Fergasam Group is among the oldest garment manufacturers in Sri Lanka. The family-owned company dates its origins to the early 1960s, the beginnings of the garment industry on the island, when managing director Arshad Sattar's father, Abdul Sattar, started a garment factory called Fergasam Garment Industries.

 

"The factory manufactured men's shirts for the local market," says Arshad Sattar.

 

In 1972, the company made its first export shipment of men's shirts to Sweden and from then on, started aligning itself with export market opportunities.

 

During the era of garment quotas, in 1982, Fergasam acquired Timex Garments and used the quotas as an opportunity to expand into additional export markets and product ranges.

 

The group also began expanding its international presence. Marketing offices were set up in New York and in the United Kingdom, while fabric and accessory sourcing hubs were set up in Hong Kong and China.

 

Then, in 2005 and 2006, the company added eight more factories and 4,950 employees.

 

Today the company's primary markets are the United States, the United Kingdom and Germany. A major share of output (70 percent) is in ladies' dresses (ranging from low- to high-end brands), followed by intimate apparel.

 

Major customers include brands such as Maggy London, Donna Morgan, SUZI Chin, SHANI, MUSE, Castehill, Alfred Dunner, Jessica Howard, Positive Attitude, Gerson & Gerson, PVH, Talbots, Red Cats, Victoria's Secret, Next, Marks & Spencer, Dorothy Perkins and Wallis and Principles.

 

Focus on the front end
While many Sri Lankan companies are working on streamlining the back ends of their operations, Timex-Fergasam's main focus is on the front end.

 

The company already has strong links throughout the back end of its supply chain, "so now we are looking at front-end [processes such as] marketing, branding and retail," says Sattar.

 

Last year the company went into a partnership with U.S.-based Maggy London as part of this plan, which resulted in the formation of a new company, Landmark Fashions UK, which markets Maggy London designs, manufactured in Sri Lanka, to retailers in Europe.

 

"It has been very successful. In fact the retailer Next had a best seller from us - a black and white dress that was their number one selling item in 2007," says Sattar.

 

Regional expansion plans
Timex-Fergasam also is aggressively following a regional expansion strategy to synergize on the different strengths and opportunities in the Asian region.

 

In South Asia, it is looking to India as both a market and a manufacturing base, and is also tapping into the low-cost production opportunities in Bangladesh. It has its eyes on east Asian locales such as China and Hong Kong as sources for fabrics, accessories and high-quality retail goods.

 

Additionally, the company has just entered India with its "own brand" women's lifestyle label and retail store, the first of which opened in the bustling metropolis of Bangalore last month, to be followed by others in Bombay and New Delhi in early 2008.

 

"We are targeting a high-end, lifestyle niche. We will offer our'own brand' label of high-end lingerie and dresses. We will also be sourcing products from Hong Kong and China, so [we are offering] a complete shopping experience," explains Sripathmanathan Sriketheeswaran, general manager, finance and administration.

 

In mid-2008, the company will further expand its presence in India to take advantage of Indian fabrics and embellishments, with the opening of an 85,000-squarefoot factory in Chennai at the Mahendra World City, says Sriketheeswaran.

 

Likewise, the company will enter Bangladesh in 2008 with a 48,000-squarefoot factory at the Chittagong Export Processing Zone, to be expanded to 200,000 square feet by 2009.

 

"We are going to Bangladesh because of the lower cost of manufacturing. This way we will be able to retain our customers that want lower cost products," says Sriketheeswaran.

 

Corporate ethic: garments without guilt
Despite all the changes during its 44 years of existence, Timex-Fergasam says core values have not changed.

 

"There have been a lot of changes, especially over the last two years. But we are still a family company and our employees are part of the family," says Sattar.

 

Today the Timex-Fergasam family is a large one made up of nearly 8,000 individuals in Sri Lanka. The group says it will take its corporate ethic of family-style caring wherever it goes.

 

What form does that caring take? "We don't ask our workers to do late night shifts. We pick [up] and drop [off] our workers because the mass transport systems are not so good. We encourage married women to continue working and we arrange transfers if they are pregnant. Anyone can walk into our chairman's office and talk to him about anything," says Sattar.

 

Also, training and development are an important part of the work culture, which has allowed those that began at the bottom, on the factory floor, to make it to management levels, says Sattar.

 

As part of its corporate social responsibility, the group is involved in many community and social service projects such as providing assistance to tsunami victims and internally displaced families in waraffected areas in Sri Lanka, and providing cash and material assistance to schools, hospitals and public and private welfare institutions.

 

 

CORPORATE ETHIC
The company is a big supporter of Sri Lanka's "Garments without Guilt" ethical manufacturing position, and plans to employ the same practices as it moves its operations into other countries. "This means decent working conditions and no child labor. Also good environmental practices," says Arshad Sattar, managing director, Timex-Fergasam Group.

 

FINANCIAL STRENGTH
The company holds a strong financial position and as such, does not depend on banks for financing. Over the past 10 years, its turnover increased from US$4.6 million to US$75 million, and it expects a US$100 million turnover this year.

 

TECH STRENGTHS
The company is using technology to reduce its lead times, including Tukatech's e-Fit software to reduce the sampling process time for fitted garments. It also has an ERP system linking all of its factories.

 

CORPORATE GOAL
To be a global "own name" brand for women's dresses and intimate apparel, within 10 years.