OHI Garments Company, which registered impressive business growth in 2000, is confident it will be able to show good results this year as well. It is also eyeing increases in production capacity, encouraged by purchases from loyal buyers and the prospects it sees when export quotas will be abolished as part of a World Trade Organisation programme of markets liberalisation. The company has now fully automated its production process, a development it says was achieved without any layoffs as the affected staff was moved to sections that needed extra hands. "By all accounts 2000 was our best year, said OHI Garments general manager MK Leenus. "And 1999 was better than the previous year by 35 per cent." OHI stands for Oman Holdings International, one of the country's prominent industrial groups. The company is enthusiastic of the purchaser base it has developed over the years, particularly the acceptance of its garments by well-known fashion labels including Tommy Hilfiger, Express and Gap.
OHI Garments has a staff of 450 of whom 30 per cent are Omanis. It has been churning out gents and ladies woven apparel at the rate of 2.1 million pieces per year. The company is also planning a hike of 25 per cent in production capacity and will buy Japanese machinery to accomplish that. The company first began production in 1989 and broke even in 1992, making profits since then.
Most production goes to the US with Japan, Europe and South America accounting for the rest. The company deals directly with companies that have their own labels unlike many other garment firms that depend on sales through import agents who then distribute the apparel in the markets they represent.
According to Leenus, Tommy Hilfiger, US, snaps up 50 per cent of the garments with OHI Garments being the only manufacturer in the Middle East to supply to that label. Gap, US, takes 25 per cent of the production and Express, US, 20 per cent, while the rest is accounted for by others. The company maintains strict quality standards so as to meet with the approval of labels representatives who regularly visit the factory to check consignments before shipment.
"The abolishing of quotas by 2004 will be both an opportunity and a disaster," comments Leenus. "With no quotas to follow, many will want to jump on the bandwagon for a slice of the pie. Existing companies might find they are losing out to competitors who might cut corners."
The company's best selling items are mostly cotton trousers. This year there has been a fashion shift with denims back in demand. OHI Garments made no denims last year and in fact, demand for denims had dropped drastically from the boom denim years of 1995 and 1996. Equipment though did not lie idle as heavier machinery such as the kind used for making denims can also be used for making lighter material.
This year OHI Garments installed a Unix-based automated system called Mover. The equipment was supplied and installed by the US company Gerber. Automation was introduced gradually, starting with designing in 1995. In 2000 were installed spreading machines and in 2001 a cutting machine and the mover system were put in place, thereby completing the computerisation of production. The technological improvements, quality of production and market strategy have helped the company to succeed, says Leenus.
