Teboho Kobeli founded Afri-Expo in 2011 and its big operations commenced in 2016. The clothing factory initially employed 70 workers and occupied a floor space of 350 m² at the Maseru Industrial Area. The factory has since moved to a bigger space at the Tikoe Industrial Area and now employs 350 workers operating on a floor space of 2000 m².
“It can be overwhelming managing this kind of exponential growth,” Kobeli said. “But the good thing about this industry is that it can create many jobs and reduce the unemployment rate if the participation of Basotho entrepreneurs was scaled up.”
The floor space at Afri-Expo can accommodate 500 people from machine operators to sewing lines and cutters and he said one of the reasons that deterred growth in the clothing and textile industry was lack of funding for expansion.
“The local commercial banks do not understand how factories operate,” Kobeli said. “There is a lot of secrecy and concealment by the Asian investors who dominate operations of our local firms and that makes it difficult for the bankers to understand our business.”
He said investment in the industry was bankrolled by foreign money that it was not easy for local tax authorities and financiers to carry out due diligence. “The banks need to acquire information about our operations if they are to make an informed decision in their evaluation of business opportunities in the factories,” Kobeli added.
A serial entrepreneur, his plans to run a business of this magnitude were conceived over two decades ago. His first business, Kobeli Business Services (KBS), was the breeding ground of preparation for the leadership challenges he is faced with today.
“It’s a bit complicated if you are getting started but there’s certainly a lot of opportunities in the firms for budding business people,” Kobeli said.
He said this type of business carried risks like any other: “But where in the world do you produce and are assured of buyers?” Kobeli asked. “This is a model of success to follow.”
But he warned that lack of political will in the support of local entrepreneurs by government was another deterrent to stop the industry in its tracks. “There’s not a broad-based strategy to support local business people in this country - let alone the factory owners,” Kobeli said. “The authorities come here, claim it’s a good thing but do nothing about it.”
He is worried that Lesotho will lose its dominant status of producing large quantities of clothing and apparel to the US market under Africa’s Growth and Opportunities Act (AGOA).
AGOA provides beneficiary countries such as Lesotho with a significant competitive advantage to sell to the US market without paying normal tariff rates.
“For instance, countries like Swaziland and Namibia could gain competitive edge over Lesotho for lack of support to the vulnerable Basotho factory owners,” said Kobeli.
But he is no one to surrender.
Kobeli is thinking about possibilities that would streamline his manufacturing business and improve serving the retail market in the Southern African region.
“It’s now expensive for South Africa to import from China given the economic trends of inflation, exchange rates and interest rates,” he said. “Economies of scale dictate that you order at least 10 containers from China for marginal efficiency and it can be very expensive for a retailer.”
Kobeli added that most of the chain stores in the Southern African Development Community (SADC) region were headquartered in Gauteng and its close proximity to Lesotho offered local manufacturers an opportunity to produce to order and on time.
“Unlike importing from China, it’s possible to supply a container from Lesotho to a retailer based anywhere in South Africa in a week or so - as and when there’s an order,” he said. “And it’s so easy to travel anywhere to South Africa from Lesotho to meet buyers in Johannesburg, Cape Town and Durban.
“I highly recommend our government to revisit their investment policies, especially the legislative rules that will expand industry and competitive environments of an indigenous manufacturing business.”
The value chain at Afri-Expo is also constrained by lack of cleaning facilities where clothing has to be transported to Durban for cleaning and back to Lesotho, a costly but necessary activity in the supply chain from the manufacturer to the ultimate consumer.
“It means more investment opportunities for Basotho in the supply chain that links manufacturers, retailers and consumers,” Kobeli said. “While the industry is both challenging and exciting, it can be financially rewarding.”