Introduction By The Managing Member - Puma
Introduction By The Managing Member - Puma
Introduction By The Managing Member - Puma
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CONTENTS PAGE<br />
<strong>Introduction</strong> by the <strong>Managing</strong> <strong>Member</strong><br />
Mission Statement<br />
Our History<br />
Ownership Structure<br />
Management Structure and Governance<br />
Our Most Material Issues<br />
Use of Appropriate Technology<br />
World Class Products for World Class Customers<br />
<strong>The</strong> Vimal Team<br />
Research, Marketing and Procurement<br />
Occupational Health & Safety<br />
Environmental Management<br />
Social Responsibility and Community Investments<br />
Stakeholder Engagement<br />
DTI Codes Of Good Practice<br />
Human Rights<br />
Lessons Learned and the Way Forward<br />
Request for Feedback<br />
GRI G3 Application Level Requirements<br />
GRI Content Index<br />
Non- Independent Assurance Statement<br />
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3<br />
3<br />
5<br />
5<br />
8<br />
11<br />
13<br />
16<br />
21<br />
22<br />
25<br />
27<br />
28<br />
28<br />
29<br />
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31<br />
32<br />
33
INTRODUCTION BY THE MANAGING MEMBER<br />
Vimal Clothing Enterprises cc (hereafter, ‘Vimal’) is a privately owned Durban-based clothing manufacturing<br />
company with a 26 year history. With more than R35 million in annual revenues, we are no longer classified<br />
as a SMME, or ‘Small, Medium or Micro Enterprise’, which brings with it both excitement and challenges.<br />
While extending beyond this economic milestone marks a significant and exciting development in our company,<br />
it also heralds a need for Vimal to ensure that the governance and management of the company moves<br />
from our historical ‘family business approach’, to a more structured ‘corporate approach’. This Sustainability<br />
Report is therefore a demonstration of our efforts to streamline our data management and reporting to<br />
key stakeholders.<br />
Since 1981, our primary manufacturing output has always been apparel, although we<br />
did spend a few years experimenting with furniture making and other initiatives. At<br />
present, our business consists of four business units: Vimal Clothing; Yash Clothing;<br />
Functional Sportswear and Niam Embroidery. Through the acquisition and development<br />
of these four equally important units, we have been able to diversify our products<br />
and services portfolio while identifying and concentrating on products that best<br />
suit our specific core competencies. Each of the business units is unique in its specific<br />
focus, but they ultimately work harmoniously with each other to share in making Vimal<br />
a successful manufacturer of sporting apparel.<br />
As a South African supplier of <strong>Puma</strong> AG, a world class sports brand, Vimal was invited<br />
to participate in a development programme supported by the German Development<br />
Agency (GTZ) and the Global Reporting Initiative (GRI) that taught us how to produce<br />
a Sustainability Report such as this one.<br />
Prior to the first workshop held in Cape Town in July of 2007, we knew nothing about<br />
Sustainability Reporting and very little about ‘Corporate Responsibility’. We knew<br />
that our success over the past 26 years has been based on our ability to focus on<br />
being ‘a good company’, but we never had occasion to understand that our customer<br />
and employee-centric approaches to surviving in a highly competitive market was of<br />
interest to people other than ourselves. <strong>The</strong> reporting process has therefore helped<br />
us understand how well we have been doing, while allowing us a unique opportunity to consider whether the<br />
business as a whole, or specific components within it, could be improved. Specifically, our attention has been<br />
drawn to issues such as environmental performance and improved employee engagement.<br />
However, it should be remembered that Vimal is not a large publicly listed company with endless supplies of<br />
cash or, more importantly, time.<br />
I, as the <strong>Managing</strong> <strong>Member</strong>, am but one man, and while I have a small team of dedicated management support<br />
staff, a task such as developing this Report is a monumental challenge when our time is already exhausted on<br />
the day-to-day activities involved in running our business. Thus we need to stress that this is our ‘first effort’ in<br />
producing a Sustainability Report, and while we may not have included all of the information stakeholders might<br />
require, we trust that we have made the best effort possible in our particular circumstances.<br />
Thankfully, the process of reporting was facilitated by Trialogue Assurance Services, a Johannesburg-based<br />
consultancy that offers similar services to companies that tend to be a lot larger than Vimal, with support from<br />
the GTZ, the GRI and <strong>Puma</strong>.<br />
<strong>The</strong> primary goal of this Report is to offer our many stakeholders an opportunity to better understand who we<br />
are as a company, as a team of individuals and as a proudly South African manufacturer of clothing. <strong>The</strong> following<br />
pages provide a summary of our ‘Most Material Issues’, including a discussion of how we believe we<br />
have been doing thus far and how we hope to improve in the future.<br />
It is important to note that the reporting period under question is limited to the 2007 Calendar Year (CY 2007),<br />
although we have attempted to include data for 3 years where it has been relatively easy to assemble. Where<br />
possible, trend analyses have been conducted for all available data on a month-by month basis.<br />
1
Our operations exist only in South Africa, and while our largest clients (Adidas and <strong>Puma</strong>) are international<br />
companies based in Germany, our sales are all directed to the South African subsidiary of these companies. All<br />
of our other clients are based in South Africa, while our principle suppliers of machinery and fabric are based<br />
overseas (principally Thailand and Taiwan).<br />
<strong>The</strong> value of this Report may not lie within these pages, but rather within the many lessons we learned while<br />
pulling this information together. Mostly, we learned that we actually possessed information, statistics and<br />
ideas that could support our assumptions about how good a company we are, as well as how we can potentially<br />
improve in the future.<br />
<strong>The</strong> content of this Report is set out according to the GRI’s G3 Guidelines, and because this is our first attempt<br />
at reporting our objective has been to meet the Application Level C requirements.<br />
At this time, it is my hope that you will find value in the information we have compiled on your behalf, and we<br />
hope that you will contact us should you have any questions or comments about this Report.<br />
Sincerely,<br />
Nayan Kalidas<br />
<strong>Managing</strong> <strong>Member</strong><br />
Vimal Clothing Enterprises<br />
2
MISSION STATEMENT<br />
Vimal Clothing Enterprise cc is committed to:<br />
1. Maintaining and expanding our reputation as a specialised knitted and woven garment supplier<br />
2. Maintaining a low cost structure and improving our efficiency standards<br />
3. Moving with changes in manufacturing technology and ensuring that production is in-line with best practices<br />
4. Recognising that our employees are our greatest asset, and accordingly attracting and retaining quality<br />
people who will identify with our culture of integrity and flexibility<br />
5. Continuously recognising our commitment to quality in our range of products, as well as in our service to<br />
customers<br />
6. Remaining a sound organisation through growth and profitability<br />
OUR HISTORY<br />
History is said to be the blueprint of the future, and nowhere is this more apparent than at Vimal Clothing<br />
Enterprise cc.<br />
Since 1981, when the Kalidas family first started Vimal Clothing, the company has continuously expanded<br />
its capacity in order to ensure that the company demonstrated a continuous ability to provide client-specific<br />
solutions to challenges presented by a diverse range of customers.<br />
<strong>The</strong> success of Vimal has been centred on its ability to translate customer challenges into innovative solutions<br />
that break traditional moulds and offer strategic solutions within rigid constraints of time, quality and price.<br />
During the infant stage of the business (the first four years) Vimal operated as a ‘cut, make and trim’ (CMT)<br />
factory which established a comprehensive understanding of the apparel business. However, we quickly learned<br />
that in order to afford maximum value to our clients we had to learn how to specialise in a select range of<br />
key products.<br />
As such, we chose to focus on a product range that incorporates the following garments, and their many<br />
variations within the respective divisions.<br />
MENS LADIES GIRLS & BOYS<br />
Tracksuits Tracksuits Tracksuits<br />
Jackets Jackets Jackets<br />
Pants Pants Pants<br />
Shorts Shorts Shorts<br />
Soccer Shorts Soccer Shorts<br />
Soccer Jerseys Soccer Jerseys<br />
In 1987, during the second phase of our business, we started producing tracksuits<br />
for corporate clients and wholesalers targeting the medium price market. <strong>By</strong><br />
learning from our past experiences, focusing on products that best suited our core<br />
competencies, and proving that cost effectiveness, on-time deliveries and unquestionable<br />
quality were at the heart of being a customer-centric company, Vimal was<br />
able to attract Adidas South Africa as our first flagship client in 1989.<br />
3
Start (20 employees)<br />
‘81 ‘87<br />
Through the process of learning how to work to the exacting standards of Adidas South Africa, Vimal has been<br />
able to gain an invaluable understanding of what it takes to effectively compete in an industry that is critically<br />
affected by the ease in which products can navigate across international boundaries. While price will always be<br />
a key success factor in the garment manufacturing industry, it is not the only issue that buyers are interested in,<br />
and by learning to meet the quality, labour and environmental expectations of a company such as Adidas, we<br />
are in a position to report that our client list proudly includes the likes of Nike, <strong>Puma</strong>, Reebok and TotalSports<br />
(among others).<br />
Adidas<br />
‘94<br />
Nike<br />
MILESTONES<br />
1981 Start with 20 employees (526 at the end of 2007)<br />
1987 Start of supply relationship with Adidas (still the largest customer)<br />
1994 Start of supply relationship with Nike (no contracts in 2007)<br />
1999 Started Niam Embroidery with 12 employees (24 at the end of 2007)<br />
2001 Start of supply relationship with <strong>Puma</strong><br />
2002 Started Functional Sportswear with 50 employees (103 at the end of 2007)<br />
Started Yash Clothing with 34 employees (95 at the end of 2007)<br />
2006 Start of supply relationship with Reebok and TotalSports (Foschini Group)<br />
2007 Move into new premises in Mount Edgecombe (Umhlanga)<br />
Of course, the growth of our client base has also meant a significant growth in the physical size of our business.<br />
Vimal outgrew our first factory in the Phoenix Industrial Park and moved to the Redhill Industrial Park back<br />
in 1996. In 2007, 11 years after our first major move, we were pleased to cut the ribbon on our new factory<br />
situated in the Mount Edgecombe Industrial Park, adjacent to a beautifully appointed golf estate.<br />
Our decision to relocate was predicated by our need to ensure that our employees could be afforded a factory<br />
that is easy to access their homes, that is safe, and that demonstrates that their employment is secure, as<br />
demonstrated by a factory that is superbly appointed and ready to allow for future growth.<br />
In 2002 we noticed an increased demand for soccer jerseys and shorts. This initiated the acquisition of<br />
subsidiary corporations which focused their mainline operation on soccer outfits. <strong>The</strong> knits allowed us to<br />
compliment our woven product range. We are currently producing garments for blue chip corporations such as<br />
Adidas, <strong>Puma</strong>, Nike, Reebok and the Foschini Group (TotalSports).<br />
4<br />
‘99<br />
Embroidery<br />
‘01<br />
<strong>Puma</strong><br />
‘02<br />
Functional Sportswear<br />
Yash Clothing<br />
‘07<br />
526
OWNERSHIP STRUCTURE<br />
Vimal Clothing was originally established a closed partnership.<br />
However, Mr Nayan Kalidas (‘Kali’ to all who know<br />
him) was given the opportunity to buy the full 100% interest<br />
in Vimal Clothing, creating an opportunity to expand the<br />
business into what is now known as Vimal<br />
Clothing Enterprise cc (‘Vimal’), with the Shareholding in<br />
Vimal limited to Kali (70%) and his wife (Naina, 30%).<br />
Under this banner, Vimal now consists of four 100%<br />
wholly owned subsidiaries, including:<br />
• Vimal Apparel, our primary garment<br />
manufacturing entity<br />
• Functional Sportswear<br />
• Yash Clothing<br />
• Niam Embroidery<br />
Apparel production is broken into various categories, whereby Functional Sportswear focuses on specialized<br />
garments, particularly with respect to soccer, Yash Clothing focuses on entry level sporting apparel and Vimal<br />
Clothing produces a full range of all sporting and fashion garments. Niam Embroidery offers a value-adding<br />
service to all of the business lines, including embroidery and sublimation printing services.<br />
With the exception of Yash Clothing, all subsidiaries are located at our Mount Edgecombe facilities in Durban,<br />
South Africa. Yash is located in Umzinto, one of Durban’s other non-metro under-developed areas. When,<br />
Yash was started in 2002 the intention was to create additional jobs for machine operators in an area where<br />
access to transport is less of a concern. Based on the success of the initial model, the employee<br />
population has grown from 50 to just over 100 employees, with the higher skilled activities (e.g., design and<br />
cutting) being retained within our centralised Vimal factory.<br />
5<br />
VIMAL CLOTHING ENTERPRISES CC<br />
MANAGEMENT STRUCTURE AND GOVERNANCE<br />
Vimal Apparel<br />
(305 employees)<br />
Functional Sportswear<br />
(103 employees)<br />
Yash Clothing<br />
(95 employees)<br />
Niam Embroidery (23 employees)<br />
Within Vimal, the overall management structure is limited<br />
to four tiers of control. Ultimately, all decisions are<br />
taken by the owner of the business, but the day-to-day<br />
running of the business resides with the managers and<br />
supervisors.<br />
Communication, particularly between departments and<br />
business units, is perhaps our most important critical<br />
success factor.<br />
Although Vimal is in essence ‘one company’, the four<br />
separate business units (Vimal, Functional, Yash and<br />
Niam) operate as independent entities within the structure.<br />
However, the success of each business unit, as<br />
well as Vimal on the whole, is critically dependent upon<br />
ensuring that the management team from each unit regularly<br />
interacts to ensure smooth and efficient production<br />
flow.
In order to ensure that the same principle of effective communication cascades down throughout the entire<br />
company, employee communication is managed through reporting lines to Floor Supervisors and<br />
Shop Stewards.<br />
Although these are represented as the 4th tier in our management structure, they are as important, if not more<br />
important, than all other tiers, due to our reliance on our production team to ensure that client expectations are<br />
achievable, and that potential challenges are quickly identified and addressed.<br />
Saras<br />
Production Manager<br />
Sandra/Michelle<br />
Sourcing Department<br />
Rita<br />
Bulk Design Production<br />
Vishnu/Vishal<br />
Cutting Room<br />
Priscilla<br />
Embroidery<br />
Sandra/Mala/Angie<br />
Floor Management<br />
Nishel<br />
Soccer Products<br />
Amit<br />
Trims Department<br />
Floor Supervisors<br />
Nayan (Kali) Kalidas<br />
<strong>Managing</strong> <strong>Member</strong><br />
<strong>The</strong> overall management structure of the company is divided in to the following core elements:<br />
Owners: Because Vimal is a privately held family-owned company our ‘Board’ consists of<br />
our two owners and ‘Board Meetings’ often equate to ‘dinner at home’, where Mr.<br />
and Mrs. Kalidas are Vimal Clothing’s decision makers.<br />
Production Manager: Saras plans all aspects of our production, including the time frames required to<br />
complete orders. She also communicates with all of our customers to address production<br />
queries.<br />
Finance: Solitha is responsible for all aspects of our financial management.<br />
Soccer: Nishel is responsible for co-coordinating all of our Soccer and Sublimation orders.<br />
Floor Management: Our Production Managers (Sandra, Mala and Angie) make sure that all production<br />
orders are completed on deadline and that all goods are delivered on time to our<br />
customers.<br />
Payroll/HR: Khemie makes sure that all workers are paid on time and that all of their queries are<br />
answered satisfactorily.<br />
Trims Manager: Amit oversees the Trims Department, including the ordering of all trims to produce<br />
our goods as per client expectations of quality, cost and time.<br />
6<br />
Julie<br />
Design Manager<br />
Shireeta/Caroline<br />
Design Supervisors<br />
Solitha<br />
Financial Manager<br />
Khemie<br />
Payroll/HR Department<br />
Shop Stewards
Shop Stewards: <strong>The</strong> shop stewards relay all worker queries to Management and initiate meetings to<br />
discuss any problems.<br />
Design: Julie is responsible for coordinating our product development.<br />
Our financials are audited by an external service provider, as required by law,<br />
and our company registration documentation is kept up to date during our annual<br />
audit process.<br />
Policies and procedures are typically established by the relevant business unit<br />
or department manager, and are discussed amongst the management team to<br />
ensure that they are consistent with our vision, mission and values.<br />
<strong>The</strong> conduct of our employees is guided by our Code of Conduct, which is<br />
signed by each employee when they join Vimal. This Code addresses employee<br />
rights, misconduct, disciplinary counselling, grievance procedures<br />
and sanctions.<br />
Our environmental performance is monitored and measured according to<br />
our environmental policy which addresses the identification and management<br />
of impacts and emissions, the use of materials and supplies that have<br />
a reduced environmental impact, the reduction of wastes, and increasing<br />
energy efficiency.<br />
Our occupational health and safety policy is applied to ensure that the safety and well-being of employees is<br />
protected across all of our operations. This policy addresses the identification and management of risks and<br />
hazards, the training of all employees, incident and accident reporting procedures, and the management of<br />
injuries on duty.<br />
It is the responsibility of each employee to identify ways in which our environmental and safety performance<br />
can be improved.<br />
Employee engagement occurs via Shop Steward Meetings every Monday morning, with an additional meeting<br />
with concerned employees occurring on Monday afternoons.<br />
Anyone wishing to raise specific concerns about the operation of the business, or specific personal or professional<br />
challenges, are invited to use one of these two mechanisms to raise issues of specific interest or concern<br />
to the company.<br />
In special circumstances, an open door policy is maintained by Kali. Anyone wishing to ‘quietly’ discuss a<br />
specific issue is invited to call upon Kali when required.<br />
7<br />
<strong>The</strong> canteen is<br />
often where issues<br />
of concern or<br />
interest are debated,<br />
discussed and<br />
raised with the<br />
management team.
OUR MOST MATERIAL ISSUES<br />
At Vimal, we define “material” as those issues that can, or in fact do, have a significant impact on our ability to<br />
remain competitive within the markets we operate.<br />
Given the nature, structure and operating environment of our company, we tend to regard production, product<br />
safety and labour issues as our ‘Most Material’, while environmental issues have, until recently, been of limited<br />
concern to us.<br />
Ultimately, we believe that the long-term viability of our business rests on our ability to manage the following<br />
issues, as identified by our management team through their daily interaction with key customers, suppliers<br />
and employees:<br />
Production efficiency,<br />
delivering on-time<br />
Compliance to the<br />
National Bargaining<br />
Council (Clothing<br />
ISSUE PERFORMANCE TARGETS<br />
Industry)<br />
Customer complaints about late deliveries<br />
are rare but performance can still improve.<br />
In 2007 no penalties were levied by any<br />
clients.<br />
Currently working on the installation of a new<br />
IT system to capture production data to im-<br />
prove efficiency.<br />
Vimal is certified as a ‘Compliant <strong>Member</strong>’<br />
of the NBC.<br />
As a certificated member, Vimal has been<br />
able to prove that we<br />
• pay correct normal and overtime wages<br />
• pay appropriate end of year bonuses<br />
• pay for appropriate benefits<br />
• adhere to appropriate guidelines on normal<br />
and overtime hours.<br />
To date, no unresolved concerns or com-<br />
plaints are outstanding with the NBC, and no<br />
complaints have ever led to CCMA arbitra-<br />
tion.<br />
New technology <strong>The</strong> implementation of new technology within<br />
DTI Codes of<br />
Good Practice<br />
Vimal has increased the output per worker,<br />
particularly for specialised tasks such as<br />
pocket affixation.<br />
Quality and sophistication of products has<br />
increased due to the presence of higher<br />
value-add machinery, ultimately leading to<br />
an increase in orders that Vimal otherwise<br />
would not be able to fill.<br />
<strong>The</strong> Department of Trade and Industry (DTI)<br />
Codes of Good Practice are a set of govern-<br />
ment principles in support of Broad Based<br />
Black Economic Empowerment (BBBEE) in<br />
South Africa. <strong>The</strong> Codes come into full effect<br />
at the end of February 2008, and at the time<br />
of writing this Report, we are in the process<br />
of undergoing a review of our status accord-<br />
ing to these Codes.<br />
8<br />
• Complete the integration of IT systems for<br />
automatic order generation with Adidas<br />
• Engage other key clients<br />
(<strong>Puma</strong>, TotalSports) to discuss similar<br />
possibilities.<br />
• Maintain certificated compliance to the<br />
NBC<br />
• Ensure that no employee is treated in<br />
a manner that is inconsistent with the<br />
agreements established by the NBC<br />
• Ensure that all employees work towards<br />
targets leading to the payment of bonuses<br />
• Complete the installation and conversion to<br />
automated cutting machines.<br />
• Complete the installation and development<br />
of skills to operate the new automated cuff,<br />
collar and waistband knitting machines.<br />
• Investigate possibilities to procure an<br />
automated marking system to increase<br />
accuracy and efficiency, and to reduce<br />
material wastage.<br />
• Vimal is committed to completing a full<br />
assessment of our Codes status within<br />
the first half of 2008, and we will discuss<br />
this assessment in our 2008 Sustainability<br />
Report.
Securing adequate<br />
orders to ensure the<br />
long-term financial<br />
ISSUE PERFORMANCE TARGETS<br />
viability of the<br />
company<br />
Vimal is proud of our record of never having<br />
cause to commit employees to ’short time’,<br />
or to retrench employees due to lack of or-<br />
ders.<br />
<strong>The</strong> quantity of 2007 orders was sufficient to<br />
merit the increase in staff complement by 79<br />
employees.<br />
Welfare of our team Vimal is committed to ensuring a policy of<br />
‘zero short shifts’, where all employees are<br />
guaranteed full weekly wages.<br />
Annual performance and zero sick leave<br />
bonuses are paid out to workers in<br />
exchange for their dedication to performance<br />
excellence.<br />
Long service awards are given to employees<br />
who complete 5 years (or more) service.<br />
School fees are payable to employees who<br />
meet specific performance criteria, thus re-<br />
ducing their financial concerns.<br />
All employees are allowed to take the day off<br />
on the first day of the school year, to assist<br />
their children with school enrolment.<br />
Workplace safety Although appropriate safety equipment is<br />
used, 3 employees sustained injuries in the<br />
cutting room.<br />
An Injury on Duty (IOD) Register is main-<br />
tained within the factory, and at our off-site<br />
assembly plant in Umzinto (Yash Clothing).<br />
Supervisors conduct daily inspections to<br />
manage risks, including ensuring that needle<br />
guards are not removed and that work spac-<br />
es are free from obstructions.<br />
Inspections of potential workplace hazards<br />
are conducted on a bi-weekly basis or as/<br />
when necessary.<br />
6 employees are trained by St. John’s Ambu-<br />
lance in First Aid every 3-years.<br />
Fire fighting training has been conducted by<br />
Chubb Fire.<br />
All fire fighting equipment is tested on a<br />
monthly basis.<br />
Evacuation drills are conducted on a<br />
6-monthly basis.<br />
9<br />
• Maintain current clients, and ensure that<br />
growth in new orders does not affect<br />
our ability to meet existing performance<br />
expectations.<br />
• Ensure that increased capacity due to new<br />
and more efficient technology is met by<br />
increased order taking.<br />
• Maintain a zero ‘short shift’ policy within<br />
the company<br />
• Ensure a zero redundancy policy<br />
• Ensure that wages are paid in-full, on time<br />
and, where possible, in the presence of<br />
performance and special gratitude awards<br />
• Implement our ‘Qualifying for 2010’ bonus<br />
scheme for awarding employees who<br />
reduce their sick leave.<br />
• Complete the installation and conversion<br />
to automated cutting machines, which<br />
is expected to reduce our exposure to<br />
cutting injuries.<br />
• Continue to maintain an up-to-date IOD<br />
register, and to discuss to discuss ‘near<br />
misses’ when they are raised.<br />
• Continue to conduct regular workplace<br />
hazard inspections.<br />
• Continue to adhere to fire prevention,<br />
evacuation and fighting programme.<br />
• Avoid all injuries on duty to reach our<br />
target of ‘Zero Harm’
<strong>The</strong>ft and unethical<br />
ISSUE PERFORMANCE TARGETS<br />
behaviour<br />
On-site losses are minimal at Vimal premis-<br />
es. However, losses can occur both in-transit<br />
and in customer warehouses.<br />
On-site monitoring of losses is monitored<br />
by comparing cutting stats with packaged<br />
orders and defaults.<br />
<strong>The</strong> implementation of on-site CCTV cam-<br />
eras has reduced occurrences of theft and/<br />
or over-reporting of work performance.<br />
One incident of personal property theft was<br />
identified and addressed during the course<br />
of the year.<br />
Cost Reduction Vimal continuously strives to reduce operat-<br />
Absenteeism and<br />
Late Arrival<br />
ing costs and overheads.<br />
Our 2007 focus was on the implementation<br />
of new technology to speed up production,<br />
reduce labour costs and reduce wastage.<br />
2007 saw a significant increase in employee<br />
absenteeism and late arrivals, although<br />
much of the tardiness was directly linked to<br />
the new location and has been addressed.<br />
Skill levels Although skill levels are not a concern in the<br />
Solid waste sent for<br />
disposal, including<br />
fabric wastage<br />
Quality of local fabric<br />
suppliers<br />
short-term, the lack of interest in garment<br />
manufacturing among the youth of South Af-<br />
rica is an ongoing concern for the future.<br />
Fabric wastage has been identified as a<br />
cost-first, environmental second, concern.<br />
<strong>The</strong> move to new technology has already be-<br />
gun to demonstrate a decrease in the num-<br />
ber of waste haulage bins being retrieved<br />
from our premises.<br />
<strong>The</strong> move to new technology has increased<br />
the amount of recyclable materials (specifi-<br />
cally plastic) being generated within the fac-<br />
tory.<br />
Although Vimal is committed to procuring<br />
fabric from local suppliers, issues of quality<br />
and on-time delivery continue to be a limit-<br />
ing factor.<br />
10<br />
• Continue to monitor potential losses.<br />
• Continue to remind employees of their<br />
responsibility to avoid theft and unethical<br />
behaviour.<br />
• Complete the installation of data manage-<br />
ment system to control inventories of<br />
fabric and accessories.<br />
• Complete the acquisition and installa-<br />
tion of new machinery to further improve<br />
production efficiencies.<br />
• Complete the implementation of the<br />
‘Qualifying for 2010’ bonus scheme to<br />
reduce absenteeism.<br />
• Need to investigate ways to find new<br />
machine operators, including the possible<br />
need to relocate some of the assembly<br />
activities to more rural areas.<br />
• Continue to implement new technology to<br />
ensure that fabric wastage is reduced.<br />
• Identify ways to sort and recycle solid<br />
wastes.<br />
• Continue to engage with local suppliers to<br />
identify ways in which Vimal can increase<br />
purchases from them, without compromis-<br />
ing on customer quality expectations.
USE OF APPROPRIATE TECHNOLOGY<br />
As a proudly South African company, we are constantly reminded of the need to<br />
balance the challenges of operating within a globally competitive market with the<br />
socio-economic challenges in our community. Poverty, high unemployment and the<br />
presence of less than scrupulous employers all plague the South African industrial<br />
sector, and we are constantly reminded that Vimal is ‘an employer of choice’ rather<br />
than ‘an only option’. As such, we believe that the delicate balance between competitive<br />
pressures toward automation and job creation places Vimal in the unenviable<br />
position of looking for inventive ways to improve efficiencies without compromising on<br />
our commitment to the welfare of our staff.<br />
Over the past 26 years of operation, we have focused mainly on ensuring that<br />
our cutters, machine operators and finishers were all supplied with reliable, safe<br />
and appropriate machines that would allow them to deliver against increasingly<br />
challenging targets.<br />
However, our experience over the past couple of years has indicated that we must<br />
alter our production strategies to rely less on human behaviour and more on the<br />
increased accuracy and efficiency of computers.<br />
Although our design, printing and planning activities have been at least partially automated<br />
for several years, 2007 became our watershed year for the automation of<br />
production activities. Thus far, we have acquired one large automated cutting machine (Lectra VectorFashion-<br />
MH8Cutter) which is expected to reduce cutting time by up to 80%, while improving our ability to make more<br />
efficient use of raw material and reducing cutting errors, thus decreasing the volume of wastages being sent<br />
to landfills.<br />
We have also purchased two automated cuff, collar and waistband knitting machines which will reduce our<br />
concerns over access to reliable sources of knitted cuffs, while allowing us to offer clients more sophisticated<br />
cuff, collar and waistband options. <strong>The</strong>se three machines are expected to be fully operational before the end<br />
of the first quarter of 2008.<br />
CUTTING<br />
Basic Cutting Machines<br />
End Cutter Machines<br />
Lectra VectorFashionMH8Cutter<br />
KNITTING<br />
Mechanical Knitters<br />
Kauo Heng Flat Bed Knitters<br />
EMBROIDERY AND PRINTING<br />
Tajima TMEX – c901 Embroidery Machine<br />
Tajima TFMX – 2c904 Embroidery Machine<br />
Tajima TFHX – 2c1208 Embroidery Machine<br />
Tajima TMFD – 615 Embroidery Machine<br />
Tajima TMFD – 620 Embroidery Machine<br />
Tajima TFGN – 920 Embroidery Machine<br />
Sublimation Machine<br />
Monti Midi Printer Press<br />
Mini Printer Press<br />
Hand held electric cutter/knife<br />
Hand held straight line end cutter/knife<br />
Automated fabric cutting machine<br />
Mechanical knitting machine for collars and cuffs<br />
Computer-aided knitting machine for collars and cuffs<br />
Single head automatic logo embroidery machine<br />
Four head automatic logo embroidery machine<br />
Eight head automatic logo embroidery machine<br />
Fifteen head automatic logo embroidery machine<br />
Twenty head automatic logo embroidery machine<br />
Twenty head automatic logo embroidery machine<br />
Printing machine for creating sublimation heat transfers<br />
Heat transfer press for sublimation prints<br />
Small scale heat transfer press for sublimation prints<br />
11<br />
11<br />
6<br />
1<br />
3<br />
2<br />
1<br />
1<br />
1<br />
1<br />
1<br />
1<br />
1<br />
1<br />
3
ASSEMBLY AND MATERIAL PREP<br />
Flat Machines<br />
Overlock Machines<br />
Double Needle Machine<br />
Multi Needle Machine<br />
Button Hole Machine<br />
Bartack Machine<br />
Coverseam Machine<br />
Semi Automatic Snap Machine<br />
Fusing Machines<br />
Button Sew Machine<br />
Blind Stitch Machine<br />
2 Needle Chain Stitch Machine<br />
AMF Reece Semiautomatic Jet Pocket Machine<br />
Juki Elastic Semiautomatic Tacking Machine<br />
FINISHING<br />
Viet 4413 Vacuum Pressing Machine<br />
Yiulih YP130H Vacuum Pressing Machine<br />
Spot Cleaning Machines<br />
OTHER EQUIPMENT<br />
Air Compressors<br />
Semi Automatic Strap Machine<br />
Crown Stock Pickers<br />
Hyster Forklift<br />
Standard operator sewing machine for normal seams<br />
Standard operator sewing machine for panel joining<br />
Operator sewing machine for specialised assembly<br />
Operator sewing machine for lay-down striping<br />
Operator sewing machine for button hole installation<br />
Operator sewing machine for seam reinforcement<br />
Operator sewing machine for hemming of knitted fabrics<br />
Operator machine for installing press studs and eyelets<br />
Operator machine for fusing vylene to fabric<br />
Operator machine for button installation<br />
Operator sewing machine for specialised hemming<br />
Operator sewing machine for lay-down striping<br />
Operator sewing machine for the installation of pockets and jets<br />
Operator sewing machine for cutting and tacking elastic<br />
Operator clothes ironing machine<br />
Operator clothes ironing machine<br />
Operator machine for removing stains and markings<br />
Air compressors to supply air to machinery<br />
Operator machine for strapping boxes<br />
Mobile operator machines for collecting fabric from stores<br />
Mobile operator machine for moving pallets<br />
12<br />
112<br />
Unfortunately, the move to automated cutting<br />
machines has already created a concern for our<br />
management staff. Of the six cutting room operators<br />
currently within our employ, we predict that<br />
we will only require two cutter operators once the<br />
new technology is in place. Our hope is that we<br />
will be able to relocate the other four staff members,<br />
but are worried that we will need to shed<br />
these staff members due to a lack of equal pay<br />
opportunities. Although this is a concern for Vimal,<br />
we are confident that these individuals have<br />
obtained a high degree of specialised training and<br />
guidance over their period of employment with us,<br />
and it is our assumption that our industry colleagues<br />
and competitors will soon be benefitting<br />
from our loss.<br />
Nonetheless, we are pleased to be in a position<br />
where we can now offer our clients an improved<br />
range of products and services, guaranteeing<br />
even better quality control performance than<br />
we’ve grown to be recognised for.<br />
92<br />
22<br />
15<br />
5<br />
8<br />
12<br />
4<br />
3<br />
1<br />
1<br />
1<br />
2<br />
1<br />
4<br />
17<br />
2<br />
6<br />
4<br />
4<br />
1
At Vimal Clothing Enterprise cc we pride ourselves in our ability to provide brand-conscious companies and<br />
distributors with the services necessary to monetise their goodwill with minimum delay and fuss.<br />
From design and embroidery through to sampling and manufacturing, Vimal is a confident and proven supplier<br />
of all required services. All of our core competencies can be use as part of a suite of services or as a standalone<br />
specialised task. Tailoring our offering to each client’s individual needs allows us to ensure that each job<br />
meets highly restricted specifications. Additionally, the strategic outsourcing of specific tasks to leading professional<br />
affiliates within our controlled network enables us to make a wide range of supplementary services available,<br />
whilst ensuring that we maintain high standards of quality assurance over all aspects of the relationship.<br />
Since 1987, we have been a proud supplier of sporting apparel to Adidas, one of the world’s most recognised<br />
and respected companies. We recognise that as a condition of our ongoing relationship with such a well known<br />
company, we must constantly adhere to strict controls over quality, timeliness of deliveries, as well as environmental<br />
and health and safety concerns.<br />
In the first few years of our supply agreements, Vimal struggled to fully understand and comply to their contractor<br />
compliance requirements. However, we quickly learned that by raising our production standards to meet<br />
their world class expectations, we could become a world class producer of garments: able to supply any global<br />
brand that is seeking an African partner.<br />
Following on from our partnership with Adidas, Vimal has had the pleasure of developing supply relationships<br />
with the following blue chip clients:<br />
• Nike<br />
• <strong>Puma</strong><br />
• Reebok<br />
• TotalSports (Foschini)<br />
• Sedsports<br />
WORLD CLASS PRODUCTS FOR WORLD CLASS CUSTOMERS<br />
As a supplier to the above listed companies, Vimal is subject to regular site inspections. Although we’ve never<br />
considered these visits as a threat to our relationship with our core clients, we have nonetheless found the<br />
inspections stressful due to our ongoing desire to be externally assured as a ‘Good Corporate Citizen’.<br />
PUMA SAFE SCORES:<br />
Weight 2007 2005 2002<br />
Social 50.00% 49.30% 46.42% 48.05%<br />
Environmental 10.00% 8.00% 7.57% 8.15%<br />
Health & Safety 35.00% 29.10% 30.82% 31.92%<br />
Additional 5.00% 4.71% 3.51% 5.00%<br />
100.00% 91.11% 88.32% 93.12%<br />
Classification B B B<br />
Both Adidas and <strong>Puma</strong> have become significant contributors to our ongoing process improvement programme<br />
through their processes of contractor compliance audits.<br />
Results from these audits, including <strong>Puma</strong>’s SAFE audits (above), have been a helpful benchmark of our performance<br />
in Social, Environmental and Safety areas.<br />
13<br />
Vimal was proud to<br />
manufacture the SA<br />
team kit for the 2006<br />
Commonwealth<br />
Games in Australia
Vimal is a proud<br />
supplier of soccer kit<br />
to players and<br />
supporters of the<br />
South African PSL<br />
14<br />
On close inspection of our audit results, we have<br />
found that while we continue to excel in the Social<br />
aspects of <strong>Puma</strong>’s audits, we still have significant<br />
room for improvement in both the Environmental<br />
and Health & Safety areas. <strong>The</strong>se findings are<br />
extremely helpful when comparing our own internal<br />
assumptions and conclusions about our performance<br />
with what we consider to be the ‘reality’<br />
of our progress. Moreover, where we believe we<br />
should be classified as an ‘A’ supplier, we are prepared<br />
to accept that <strong>Puma</strong> rates us as a ‘B’ supplier,<br />
although with a reasonable level of further<br />
improvements to be addressed.<br />
Closer to our hearts, and almost as important<br />
as supporting global brands, Vimal has had the<br />
distinct pleasure of supplying garments to South<br />
African teams representing our country at major<br />
sporting events around the world, including:<br />
• Bafana Bafana replica kit for the 2008<br />
African Nations Cup (Adidas)<br />
• South African team kit for the 2006<br />
Commonwealth Games in Australia<br />
(Sedsports)<br />
• Springbok team kit for the 2003 Rugby<br />
World Cup (Nike)<br />
• South African team kit for the 1996<br />
Olympics in Atlanta (Reebok)<br />
• Replica kit (<strong>Puma</strong>) for the 2008 Nations<br />
Cup teams from Angola, Botswana,<br />
Cameroon, Egypt, Ghana, Ivory Coast,<br />
Morocco, Mozambique, Namibia, Senegal<br />
and Tunisia<br />
Currently, Vimal is producing PSL team and replica<br />
kit for the following sporting sides:<br />
• Bloemfontein Celtic<br />
• Orlando Pirates<br />
• Ajax Cape Town<br />
• Santos (Cape Town)<br />
• Jomo Cosmos<br />
In the 2007 Calendar Year (CY), our primary client was once again Adidas, firmly representing over 70% of all<br />
orders delivered for the year. However, we noted a significant rise in interest and orders from our friends at<br />
TotalSport and Mr. Price, both of which are domestic South African retail chains.
Mr Price<br />
Reebok<br />
TotalSports<br />
<strong>Puma</strong><br />
Adidas<br />
100%<br />
90%<br />
80%<br />
70%<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
0%<br />
January<br />
February<br />
Over the past three years we’ve noted a significant change in the orders we process and fill for our clients.<br />
While we are maintaining a relatively stable number of deliveries to Adidas, our orders to <strong>Puma</strong> have risen<br />
from less than 1% of our total production to nearly 16%. Meanwhile, we have seen a significant increase in<br />
the quanity of garments that are being produced for our South African clientelle, from less than 2% in 2005 to<br />
over 8% in 2007.<br />
Table 1: Distribution of Units (i.e., garments) to Our Key Clients<br />
2007 2006 2005 3 Years<br />
Adidas 696 599 73.5% 573 341 81.9% 694 656 92.4% 1 964 596 81.9%<br />
<strong>Puma</strong> 149 112 15.7% 55 530 7.9% 5 746 0.8% 210 388 8.8%<br />
Nike 0 0.0% 21 984 3.1% 38 404 5.1% 60 388 2.5%<br />
Mr. Price 53 562 5.7% 0 0.0% 0 0.0% 53 562 2.2%<br />
Reebok 23 178 2.4% 29 365 4.2% 90 0.0% 52 633 2.2%<br />
TotalSport 25 122 2.7% 4 681 0.7% 0 0.0% 29 803 1.2%<br />
Sedgars 0 0.0% 2 413 0.3% 13 195 1.8% 15 608 0.7%<br />
Falstan 0 0.0% 11 579 1.7% 0 0.0% 11 579 0.5%<br />
Ass Ind 0 0.0% 1 042 0.1% 0 0.0% 1 042 0.0%<br />
Total 947 573 100.0% 699 935 100.0% 752 091 100.0% 2 399 599 100.0%<br />
Production efficiency improved over the second half<br />
of the 2007 calendar year because the team has<br />
now settled into our new facilities. <strong>The</strong>re is still a<br />
problem with backlogs in dispatch, mostly because<br />
of absenteeism, particularly in summer, but we are<br />
confident that 2008 will be marked with a measured<br />
improvement reduction in absenteeism.<br />
Thankfully, Vimal has been relatively immune to a<br />
common plague among garment manufacturers:<br />
product returns and order rejections. While we are<br />
aware of a few batches of products that were produced<br />
in a manner that was deemed inconsistent<br />
with client expectations, we have not needed to endure<br />
a situation where our staff allowed these products<br />
to be shipped to clients. As such, we continue<br />
to be proud of our record of ‘zero rejections’, with<br />
only a small handful of returned items.<br />
15<br />
March<br />
April<br />
May<br />
June<br />
July<br />
August<br />
September<br />
October<br />
November<br />
December<br />
CY 2007
THE VIMAL TEAM<br />
At the heart of any organisation are its people, and the people within Vimal are definitely the engine that keeps<br />
our lifeblood pumping. Vimal does not permit any form of discrimination against employees. We do not tolerate<br />
racism, sexual harassment, or the discrimination of persons with any form of disability. Our remuneration<br />
packages, including salary, bonuses and incentives, are above average for our industry, and we are registered<br />
with industrial councils and all other statutory bodies.<br />
Our team consists of a variety of trained, experienced individuals, and while the clothing manufacturing industry<br />
is an industry without high academic requirements, we continue to set high experience standards. Our experts<br />
work harmoniously to unlock value in inventive ways that assure that our customers receive a perfect garment<br />
on-time, every time. Our team is organised into core operational and administrative areas, where hierarchy is<br />
maintained at a limited level, and where access to all members of the management staff is guarded as a right<br />
rather than a privilege. Each employee, regardless of whether they are a cutter, designer, assembly machinist<br />
or finisher, has the expressed right to take advantage of Kali’s open door policy. Should an issue arise, whether<br />
it is a concern or improvement opportunity, each employee is encouraged to raise the issue with the management<br />
team member they feel most comfortable with.<br />
Vimal Group Vimal Functional Niam Yash Admin<br />
Total 526 287 54.7% 95 18.1% 23 4.4% 102 19.4% 18 3.4%<br />
White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%<br />
Black 129 24.6% 62 21.6% 39 41.1% 7 30.4% 19 18.6% 2 11.1%<br />
Indian 396 75.4% 225 78.4% 56 58.9% 16 69.6% 83 81.4% 16 88.9%<br />
Male 44 8.4% 32 11.1% 0 0% 1 4.3% 8 7.8% 3 16.7%<br />
White 0 0% 0 0.0% 0 0% 0 0% 0 0% 0 0%<br />
Black 12 2.3% 11 3.8% 0 0% 0 0% 0 0% 1 5.6%<br />
Indian 32 6.1% 21 7.3% 0 0% 1 4.3% 8 7.8% 2 11.1%<br />
Female 482 91.6% 256 88.9% 95 100% 22 95.7% 94 92.2% 15 83.3%<br />
White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%<br />
Black 117 22.3% 51 17.8% 39 41.1% 7 30.4% 19 18.6% 1 5.6%<br />
Indian 365 69.3% 205 71.1% 56 58.9% 15 65.2% 75 73.5% 14 77.8%<br />
In many respects, Vimal is somewhat immune to the challenges most companies face in complying to South<br />
African Black Economic Empowerment legislation. Based in the Durban area, where the overwhelming majority<br />
of the population is either Black or Indian, the Vimal team has always been predominantly Indian with some<br />
representation from the Black community. At present, 75.4% of our total employee complement is Indian, while<br />
the remaining 24.6% is Black. In our experience, women are more reliable, more committed, and more likely<br />
to remain within our employ for longer periods than their male counterparts. As such, and as one might expect<br />
from a garment manufacturing plant, where sewing machines and clothes irons dominate our factory floor,<br />
nearly 92% of our 526 employees are female.<br />
Vimal Group Vimal Functional Niam Yash Admin<br />
17-19 11 2.09% 4 1.4% 0 0.0% 2 8.7% 5 4.9% 0 0.0%<br />
20-29 79 15.02% 34 11.8% 7 7.4% 6 26.1% 28 27.5% 4 22.2%<br />
30-39 202 38.40% 101 34.8% 40 42.1% 9 39.1% 43 42.2% 9 50.0%<br />
40-49 184 34.98% 111 38.3% 40 42.1% 5 21.7% 25 24.5% 3 16.7%<br />
50-59 48 9.13% 37 12.9% 8 8.4% 1 4.3% 1 1.0% 1 5.6%<br />
>60 3 0.57% 2 0.7% 0 0.0% 0 0.0% 0 0.0% 1 5.6%<br />
TOTAL 526 288 95 23 102 18<br />
Min 17 18 23 19 17 26<br />
Max 63 61 53 50 50 63<br />
Average 38 40 39 33 33 37<br />
16
Unfortunately, we have been subject to another industry trend: the failure to attract younger employees to our<br />
production team.<br />
With an age distribution favouring employees between the age of 30 and 49, the total number of employees<br />
who are younger than 30 is roughly 17% of our workforce. While we don’t believe that this is a particular risk at<br />
this time, it nonetheless reminds us of an ongoing need to consider alternative strategies to attract and retain<br />
employees, particularly in the younger age brackets. We believe that the promotion of our policy of freedom to<br />
communicate is at the core of our ability to attract and retain critical staff members.<br />
2007 2006 2005 2004 2003<br />
New Recruits 229 94 146 83 132<br />
Failed Probation Period 28 11 42 12 24<br />
Net New Recruits 201 83 104 71 108<br />
Terminations<br />
Deceased 1 0.0% 0 0.0% 0 0.0% 1 2.9% 2 5.4%<br />
Discharged 4 3.3% 3 4.9% 3 3.9% 0 0.0% 0 0.0%<br />
Early Retirement 1 1.1% 0 0.0% 0 0.0% 0 0.0% 0 0.0%<br />
End Of Contract 13 10.9% 3 4.9% 33 42.9% 4 11.4% 3 8.1%<br />
Ill Health 6 5.4% 5 8.2% 5 6.5% 1 2.9% 1 2.7%<br />
Left Without Reason 17 15.2% 3 4.9% 4 5.2% 5 14.3% 7 18.9%<br />
Maternity 8 6.5% 13 21.3% 6 7.8% 9 25.7% 7 18.9%<br />
Normal Retirement 2 2.2% 0 0.0% 0 0.0% 0 0.0% 1 2.7%<br />
Resignation 63 47.8% 33 54.1% 20 26.0% 13 37.1% 16 43.2%<br />
Retrenchment 4 4.3% 0 0.0% 6 7.8% 0 0.0% 0 0.0%<br />
Voluntary Retrenchment 3 3.3% 1 1.6% 0 0.0% 2 5.7% 0 0.0%<br />
Total Terminations 122 23.2% 61 13.6% 77 18.1% 35 8.8% 37 10.2%<br />
Net Turnover 79 15.0% 22 4.9% 27 6.4% 36 9.0% 71 19.6%<br />
Employees at Year End 526 447 425 398 362<br />
Accumulated Growth 55.0% 39.9% 35.0% 28.7% 19.6%<br />
In the past 5 years, our employee turnover rate has remained in positive figures, thus leading to the growth<br />
of our total employee pool. However, we continue to struggle with the number of terminations we must deal<br />
with.<br />
In 2007, we had a termination rate of 23.2%, with resignations representing 47.8% of our total number of employee<br />
losses. While this is due in large part to our move to new premises in an area that was not convenient<br />
for some employees, we are nonetheless concerned by the overall trend towards an increase in employee<br />
terminations.<br />
Thankfully, our need to discharge employees for poor<br />
performance or behaviour that is inconsistent with our<br />
core values has been limited. In the past five years<br />
we’ve only been forced to terminate the employment<br />
of 10 workers for unsatisfactory behaviour, with four<br />
of these terminations occurring in 2007.<br />
In our 26 year history, only one termination case has<br />
been taken to the National Bargaining Council (Textiles)<br />
for arbitration. Although the termination was<br />
ruled to be merited by Vimal, we nonetheless found<br />
the process useful in confirming that our compensation<br />
procedures adhere to NBC expectations.<br />
17<br />
Having worked with<br />
Kali at another<br />
Fabric company<br />
prior to the<br />
development of<br />
Vimal, Ramesh left<br />
his job and, having<br />
faith in Kali, became<br />
one of our first<br />
employees.
Since 1988, Vimal has recognised those employees who have offered us a commitment to long service through<br />
the awarding of milestone rewards. In the 20 years of offering these awards:<br />
• 307 employees have received a clock for 5 years of service<br />
• 68 have received a microwave for 10 years<br />
• 17 have received a freezer for 15 years<br />
• 9 have received a television for 20 years, and<br />
• 3 have received a home theatre system for 25 years of service<br />
‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07<br />
5 Year Clocks 23 1 3 8 6 5 2 1 2 2 4 13 11 29 8 32 27 54 76<br />
10 Year Microwaves 3 2 5 3 4 1 4 2 1 3 11 7 22<br />
15 Year Freezers 2 2 4 2 1 1 2 1 1 1<br />
20 Year Televisions 1 2 2 1 2 1<br />
25 Year Home <strong>The</strong>atre Systems 2 1<br />
We attribute the high number of long service awards to our continued commitment to ensuring that our employees<br />
are appreciated, respected and rewarded in ways that far exceed standards of NBC compliance. Some of<br />
the additional benefits our employees receive include:<br />
• Annual payment of school fees to employees who meet specific performance requirements<br />
• Payment of 6–monthly bonuses to employees who meet production and absenteeism targets<br />
• Permission to be absent on the first day of the school year to grant parents the opportunity to assist their<br />
children in enrolling in their new grade<br />
• Additional holiday days granted to observe recognised cultural holidays, such as Diwali, that is not a<br />
recognised public holiday in South Africa<br />
2007 2006 2005<br />
Cost Pupils Cost Pupils Cost Pupils<br />
Vimal 40 535.00 78 74 325.00 166 62 226.64 147<br />
Functional 8 845.00 18 23 685.00 53 18 905.00 45<br />
Niam 15 670.00 31 15 185.00 34 500.00 1<br />
Yash 2 200.00 5 400.00 1 11 940.00 34<br />
TOTAL R 67 250.00 132 R 113 595.00 254 R 93 571.64 227<br />
In 2007 we experienced a sharp decline in the number of school fee payments that were awarded to employees:<br />
from 254 in 2006 to 132 this year. We attribute a significant portion of this decline to two key issues: our<br />
ongoing battle to limit absenteeism, and the high level of employee terminations due, at least in part, to our<br />
move to new premises.<br />
In order to qualify for the school fees bonus, employees must limit the number of days they are absent from<br />
work: a measurement that has become stricter over the past three years. In 2005, employees could receive<br />
the bonus as long as they were not absent more than 20 days.. This was reduced to 12 in 2007 (an average<br />
of 1 per month).<br />
18
52 Years of Combined Service<br />
Fatima (top) and Marlene are excellent examples of how mutual respect can translate into a lifetime of shared experiences.<br />
Both ladies joined Vimal when the company was merely a fledgling start-up, back in 1981, and both are still<br />
providing leadership within our production team. Although both ladies suffered from injuries and illnesses that kept<br />
them away from work for a good portion of this past year, both are committed to returning to full active duty within the<br />
early days of 2008.<br />
When asked why they have chosen to continue working at Vimal, their answers were unwavering in their support of<br />
Vimal as a company, and Kali as an manager to work for.<br />
F: In 26 years, I can’t recall a period when we were ever short-shifted (i.e., not given 40<br />
hours of work in a week). In fact we are most often given opportunities to work overtime.<br />
F: We’ve never been robbed of wages (never underpaid) and have always been paid on<br />
time.<br />
F: Other companies have problems paying the full amount of their wages, but Vimal has<br />
always paid us what we were owed, plus bonuses.<br />
F: Bonuses are paid twice: one before Christmas and the other in the New Year, 1 week<br />
before we return to work. Rather than one bonus, the money is split into two portions<br />
so that we won’t spend it all before we get back to work.<br />
F: <strong>The</strong>se are the most important things for those of us in production because we need the<br />
money.<br />
F: I never worked before coming to Vimal, but a lot of my friends who work in other clothing<br />
factories tell me that I am lucky to be here.<br />
F: We worked as a family, and Kali always treated us as part of his family.<br />
M: We learned a lot from Kali. We knew nothing when we came here and he taught us<br />
everything.<br />
M: In 26 years, we never had any major arguments. We always worked as a team, with<br />
unity.<br />
M: Under the union, we always receive NBC rates whereas other companies don’t employ<br />
union members and don’t pay NBC rates. <strong>The</strong>y also sometimes only let the people<br />
work 2 or 3 days per week. We always got a full week’s work.<br />
M: <strong>The</strong> whole factory gets time off for celebrations such as Diwali, regardless of whether<br />
you are Christian, Muslim, Hindu, or not religious.<br />
M: We receive attendance bonuses and long-service awards. No other companies give<br />
long-service awards like in Vimal.<br />
M: <strong>The</strong> school fees for the last 2 of my 5 children were paid by Vimal. This is a new benefit<br />
that was started about 5 years ago, and this is something that no other boss will do.<br />
M: We are very happy working here because we grew up working with Kali, and he always<br />
treated us like part of his family.<br />
19<br />
Fatima<br />
Marlene
What our employees have told us<br />
In the process of developing this Sustainability Report, our consultant randomly engaged<br />
members of our production team during their lunch break. <strong>The</strong> following is a summary of the<br />
comments and criticism they shared with us:<br />
Vimal is a good company.<br />
It is good because you can always be guaranteed that your wages (weekly).<br />
We get lots of overtime, including many opportunities to work a half day on Saturday.<br />
We should be so lucky that we are never short-shifted and are offered overtime<br />
and bonuses.<br />
We have First Aid on site and although we don’t have a lot of injuries, if an injury occurs, we<br />
get treated right away.<br />
<strong>The</strong>re’s nothing bad about working here, that’s why I’ve lasted 12 years.<br />
<strong>The</strong> management doesn’t come in and look over us, we have supervisors that ensure that the<br />
work gets done.<br />
<strong>The</strong>re are lots of rules that we have to obey, like not being able to use the phone except on<br />
breaks, and only being able to smoke on breaks.<br />
You’re not allowed to go outside unless you’re a smoker.<br />
Vimal is a safe place to work.<br />
<strong>The</strong> air conditioning is either too hot or too cold, but never right. In some places its very<br />
cold.<br />
<strong>The</strong> money is good. We get our wages on time and we’re never paid less than we’re owed.<br />
We never get short time...always get a full week’s work.<br />
We want a canteen where we can buy lunch. If we forget lunch there’s nothing we can buy<br />
at the factory.<br />
Boss pays our children’s school fees…if you come regularly to work (not if you are often sick<br />
or absent for any reason), and if you are productive.<br />
Sick time is a problem. If you stay away more than 3 days sick, you don’t get your R1000<br />
bonus…but this should be if we don’t stay away the 15 days the union allows.<br />
After 3 warnings there is no bonus.<br />
We are a branded company…we make high quality products…we should be paid more because<br />
we make quality name brand garments.<br />
My neighbour works for another clothing manufacturing company (CMT, which is not unionised)<br />
and she gets R350 per week, where the NBC wages are at least R560 per week.<br />
When I was injured and getting better, I worked for a CMT company and I had to work to 9 or<br />
10 at night (from 7am), and would only get paid R400 per week, including overtime pay.<br />
Vimal pays you much more, for less hours, in a safe and friendly factory.<br />
Here our boss buys us food if we have to work late.<br />
Kali is a nice boss who doesn’t rob us.<br />
20
7%<br />
6%<br />
5%<br />
4%<br />
3%<br />
2%<br />
1%<br />
0%<br />
Industry Average<br />
Absentee Rate<br />
Target<br />
January<br />
February<br />
March<br />
April<br />
May<br />
June<br />
July<br />
August<br />
September<br />
October<br />
November<br />
December<br />
RESEARCH, MARKETING AND PROCUREMENT<br />
As a relatively small manufacturing company, with limited access to professional<br />
research and market analysis, we continue to remain in touch with changing<br />
trends, designs and fabrics by making periodic overseas visits to assess and<br />
alter the future of our products and services.<br />
Granted, we have limited direct control over changing consumer trends due to<br />
our lack of a ‘marketing department’, but we are confident in our reliance on our<br />
clients, and the brand- conscious environment in which they operate, to act as<br />
a mechanism for marketing our products. Where deemed necessary, we are<br />
pleased to assist our customers with brand-specific marketing activities when<br />
called upon.<br />
Our artists and designers utilise the Wilcom Embroidery system and Freehand<br />
CAD for producing finished artwork and Embroideries that can be used to market<br />
specific teams, competitions and events.<br />
Our marketing is primarily restricted to proving that our services are accurate,<br />
timely and delivered according to costing budgets. While our consistent ability<br />
to deliver according to client expectations is our tried and tested method of proving<br />
ourselves to be a supplier worth choosing, the management of costs is an<br />
ongoing management challenge.<br />
A Lectra system is used in the sample rooms for pattern making, grading, ratings and marker making, resulting<br />
in the accuracy of costing and sourcing of fabric, thus reducing our costs and ensuring that we can continue to<br />
meet client price expectations.<br />
To further our cost-conscious approach to manufacturing garments, we have repeatedly identified and tested<br />
local suppliers of fabric, but have been consistently disappointed with the quality, consistency and/or timeliness<br />
of supplies. Moreover, we are constantly aware of the fact that we do not have access to local suppliers of most<br />
of our manufacturing equipment. As such, the bulk of our annual procurement budgets are directed to foreign<br />
suppliers of fabric and equipment. However, we will always choose a local supplier if they are able to meet our<br />
client-linked quality and pricing requirements.<br />
Thankfully, the majority of our accessories (e.g., print materials and supplies, thread, zippers, etc.) and servicing<br />
contracts are procured from local suppliers.<br />
21<br />
In 2007, Vimal once again failed to reach our average<br />
target of 2.6% absenteeism. Granted, our average<br />
rate of 3.2% was far less than the industry’s average<br />
of 6.0%, but we believe that we can still improve to<br />
below 2.0%.<br />
As such, 2008 will herald the introduction of our new<br />
bonus scheme to reduce non-illness related absenteeism.<br />
Our plan, called ‘Qualifying for 2010’ will offer a<br />
maximum annual bonus of 2,010 Rands to any employee<br />
who maintains a perfect attendance record.<br />
We hope that this new programme, which sees the<br />
potential for employees to receive an increase in<br />
their annual bonus payments of R810, will have<br />
a significant impact in our ability to ensure that<br />
our production schedules are not hindered by<br />
unnecessary absenteeism
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
2003<br />
2004<br />
Injuries on Duty<br />
2005<br />
2006<br />
1. HIV/AIDS<br />
2. Knife cuts<br />
OCCUPATIONAL HEALTH & SAFETY<br />
2007<br />
Cuts<br />
Sprains<br />
Needle Injuries<br />
Burns<br />
While the management and staff at Vimal consider<br />
the company to be a ‘safe’ place in which<br />
to work, we are nevertheless mindful of the risks<br />
and hazards that continue to arise on an almost<br />
daily basis. As such, we have developed and<br />
implemented an Occupational Health and Safety<br />
Policy that sets out our ongoing commitment to<br />
‘Zero Harm’.<br />
For Vimal, ‘Zero Harm’ refers to the creation and<br />
maintenance of a work environment that is free<br />
from the potential for illness or injury for our employees,<br />
our clients, and our neighbours within the<br />
Mt. Edgecombe community. In our most recent<br />
review Hazard Identification and Risk Assessment<br />
(HIRA), we identified the following potential<br />
risks and hazards:<br />
HIV/AIDS is a massive problem for all of Africa, particularly for those of us living and working in<br />
Sub-Saharan regions.<br />
<strong>The</strong> HIV/AIDS pandemic will remain a sustainability risk factor to be closely monitored and managed<br />
for many years to come, and Vimal is committed to ensuring that our workforce is perpetually<br />
aware of their role in protecting themselves, and their family members, from the disease.<br />
To date, we are only aware of three employees who have been infected by HIV/AIDS, including<br />
one employee who is still on our team, and to the best of our knowledge there have only been two<br />
HIV/AIDS related deaths among our staff.<br />
However, the relevant demographics suggest that Vimal remains vulnerable to the disease, and<br />
therefore must remain committed to addressing the risk.<br />
Vimal is especially susceptible to HIV/AIDS related risk factors when considering the fact that<br />
our employees come from a region of South Africa that is known to have one of the highest HIVinfection<br />
rates.<br />
In mitigation of our direct risk, Vimal has instituted an HIV/AIDS programme which comprises of<br />
the following elements:<br />
• Policy guidelines with regard to recruitment, promotion and management of illness in the<br />
workplace, including explicit mention of non-discrimination within our Code of Conduct;<br />
• Access to education and voluntary testing campaigns;<br />
• Continuous inclusion of awareness campaigns about HIV/AIDS in weekly staff meetings;<br />
• Access to poster campaigns in bathrooms and common areas; and,<br />
• Availability of free condoms in our restrooms.<br />
Although we insist on the use of appropriate Personal Protective Equipment (PPE) by all of our<br />
cutting room staff, injuries still continue to occur.<br />
<strong>The</strong> use of wire mesh gloves has significantly reduced the number of cuts, yet 3 new incidents<br />
occurred in 2007.<br />
Our hope that these injuries will be eliminated in 2008 with our switch to automated<br />
cutting machines.<br />
22
3. Needle pricks <strong>The</strong> greatest risk when operating a sewing machine continues to be the<br />
potential to penetrate one’s finger with the needle.<br />
In the past 5 years Vimal has only faced two such incidents, with no<br />
injuries have been sustained in 2007. We attribute this to our use of<br />
needle guards on all of our machines, our concerted effort to educate<br />
our staff about the danger, and the role our supervisors play in ensuring<br />
that guards are not removed.<br />
4. Burns Heated irons, used for pressing garments during our finishing processes,<br />
has always been an obvious risk area, resulting in one burn<br />
incident in 2007.<br />
This incident was devastating to our team, as all of our staff members<br />
were proud of our five-year zero burn performance record leading up to<br />
this incident. Although an unpleasant incident, it nonetheless reminded<br />
us of constant need to be mindful of the risk of iron burns.<br />
5. Falls from heights Although most of our employees are never placed at risk of a fall from<br />
an unsafe height, we do operate motorized stock pickers that raise<br />
warehouse staff to dangerous elevations. To mitigate the risk of falls,<br />
our stock picker operators have undergone task-specific safety training,<br />
and are required to wear safety harnesses at all times.<br />
6. Inhalation of<br />
harmful dust and<br />
fumes<br />
7. Sprains<br />
8. Inhalation of<br />
second-hand<br />
smoke<br />
No such incidents have been recorded at Vimal, yet we continue to<br />
monitor employee behaviour to limit the risk of falls.<br />
Vimal uses low harm and environmentally friendly chemicals wherever<br />
possible in the various areas of operation in our business.<br />
Although no cases of fume-related illness have thus far been reported<br />
at Vimal, we are mindful of the potential to cause harm where solvents,<br />
dyes and glues might be used.<br />
As such, we have designed our new manufacturing facility with specific<br />
attention having been paid to the provision of adequate ventilation and<br />
air quality management.<br />
Where task-specific higher risks persist, we ensure that face masks<br />
and other PPE is used by all employees operating in the risk area.<br />
<strong>The</strong> lifting of heavy bundles of fabric, the repetitive nature of specific<br />
tasks, and the need of some employees to move about areas that could<br />
become cluttered creates a multi-faceted risk of sprain injuries. 2007<br />
saw once such incident occurring, but occurred during non-standard<br />
operational activities: during the move to our new premises.<br />
Supervisors are tasked with ensuring that employees are not operating<br />
in an unsafe or unhealthy manner, but we accept that the nature of this<br />
risk is more difficult to monitor.<br />
As such, we rely on our weekly staff meetings to remind employees of<br />
their responsibility to avoid behaviour that could place them in danger of a<br />
sprain, as well as to ensure that their work environment remains clean and<br />
obstacle-free.<br />
Another addition to our working practices that began with the move to our new premises was the<br />
installation of an Employee Complaints and Suggestions Box.<br />
Although we have yet to see this tool used to its full potential, one of our staff members did use this<br />
mechanism to raise the issue of smoking in common areas as a concern.<br />
Irrespective of management’s personal bias against smoking, a policy was developed and implemented<br />
to ensure that the rights, freedoms and health of all employees, smokers and non-smokers<br />
alike, is not hindered. From January 2007, employees are not allowed to smoke anywhere within<br />
the building, but must rather exit the building and restrict themselves to a designated smoking area<br />
adjacent to the parking lot.<br />
23<br />
Having cut his hand<br />
with a mechanised<br />
knife, Ramesh now<br />
understands the<br />
need to ‘think safe –<br />
act safe’.<br />
<strong>The</strong> height of fabric<br />
stock shelves can<br />
exceed 6 metres<br />
and poses a<br />
significant risk to<br />
anyone operating in<br />
an unsafe manner.
Vimal’s parking lot<br />
could have become<br />
a risk-laden<br />
madhouse if not for<br />
the decision to enter<br />
into contractual<br />
agreements with<br />
transport service<br />
providers.<br />
9. Collisions with<br />
moving vehicles<br />
Each year thousands of pedestrians are killed in unnecessary road accidents in South Africa. Failure<br />
to observe basic traffic rules is a common problem, not just on the roads, but also in factories<br />
such as ours, where moving vehicles are employed to complete specified tasks.<br />
At Vimal, we employ three motorized vehicles and have clearly marked designated travel spaces<br />
to avoid collisions between personnel and vehicles within the factory.<br />
Safe operation of all internal vehicles is controlled though safety-specific training for all operators,<br />
the use of strobe lights and motion sirens to alert other employees of oncoming vehicles, and the<br />
application and supervision of rules to restrict access to areas commonly traversed by our forklift<br />
and stock picking machines.<br />
Another additional risk area was identified when considering the need for taxis to drop-off and<br />
collect employees on a daily basis.<br />
Too many taxis entering a relatively confined space, all operated by individuals interested in quickly<br />
moving to other routes, creates a potential hazard for employees who rely on taxis to get to and<br />
from work, as well as for non-Vimal pedestrians who share the space around our factory.<br />
To manage the risk of taxi-related injuries, for Vimal and residents of Mt. Edgecombe, Kali designed<br />
an over-sized parking lot, with an adequate number of parking bays to accommodate the<br />
number of taxis required to drop-off and collect staff members.<br />
Kali also entered into service level agreements with taxi operators that include clauses restricting<br />
taxi drivers to dropping off and collecting employees from the parking lot. <strong>By</strong> ensuring that taxis<br />
only stop when on Vimal’s property, we are confident that the risk of pedestrian-taxi collisions is<br />
reduced to the limit of our abilities.<br />
24
ENVIRONMENTAL MANAGEMENT<br />
In terms of South African monitoring and evaluation norms, Vimal’s potential for negative environmental impact<br />
is considered ‘moderate’, even according to the ratings applied by the Socially Responsible Investment (SRI)<br />
Index at the Johannesburg Stock Exchange (JSE Limited). As such, while we are of the belief that our impact<br />
on the environment is limited, we nonetheless need to be perpetually mindful of the fact that we have a responsibility<br />
to monitor and manage our environmental impacts, wherever possible.<br />
Through our participation in the contractor audits performed by many of our clients, including Adidas and <strong>Puma</strong>,<br />
as well as through the process of developing this report, we have consistently increased our level of environmental<br />
monitoring over a number of issues.<br />
1. Electricity<br />
2. Water<br />
As of late, the South African economy has become critically aware of our need to become more<br />
efficient consumers of electricity. Total capacity, as supplied by the national electricity provider<br />
(Eskom), has failed to keep pace with demand, and consumers at all levels of the economy are<br />
now subject to periods of ‘load shedding’ (i.e., rolling black-outs).<br />
On one hand, we believe that this situation will benefit society, and the physical environment, by<br />
forcing each of us to find ways to reduce our electricity consumption (e.g., use of more efficient<br />
light bulbs, conversion to solar water heaters, etc.). But on the other hand, those of us operating<br />
businesses that rely on electricity to operate are being forced to consider alternative strategies<br />
to protect our interests in the event of an electricity supply crisis. <strong>The</strong> process of developing this<br />
Report has come at a convenient time for Vimal, as we have now learned the value of evaluating<br />
our electricity bills to determine if we are managing our electricity consumption in a manner that is<br />
both cost-effective and environmentally sound.<br />
Granted, our understanding of the need to monitor our electricity consumption, as well as our<br />
understanding of how we might do so, was limited prior to the development of this Report. Nonetheless,<br />
we have used our monthly municipal rates and taxes bills to calculate our total electricity<br />
consumption, and to evaluate our average electricity consumption per unit of production.<br />
Electricity<br />
Consumed (kWh)<br />
Units of<br />
Production<br />
kWh per unit of<br />
production<br />
In analysing this data, we have been able to learn that our average electricity consumption per<br />
unit of production has increased more than 13% per annum over the past two years. Although we<br />
are uncertain of the reasons for this increase, we are committed to attempting to monitor this trend<br />
more closely and to attempt to rectify the problem. We will re-visit this issue in next year’s report,<br />
and will hope that more positive results can be presented.<br />
South Africa is widely considered to be a ‘Water Scarce Economy’, in that access to reliable supplies<br />
of potable water is not a given. As such, our water consumption, although relatively limited,<br />
is considered to be an ongoing management concern at Vimal.<br />
As in the case of electricity (above), our understanding of the need to monitor our water consumption,<br />
as well as our understanding of how we might do so, was limited prior to the development of<br />
this Report. Nonetheless, we have used our monthly municipal rates and taxes bills to calculate<br />
our total water consumption, and have evaluated this information relative to our total monthly<br />
production figures. Of course, our production is not water-dependent, and therefore trends and<br />
anomalies cannot necessarily be correlated to fluctuations in our production efficiencies, but we<br />
feel that units of production is the most effective tool that we can use to assess our water consumption<br />
efficiency.<br />
%<br />
Increase<br />
2007 1 553 548 947 573 1.64 13.1%<br />
2006 1 014 973 699 935 1.45 13.8%<br />
2005 958 416 752 091 1.27<br />
Water<br />
Consumed (litres)<br />
Units of<br />
Production<br />
25<br />
Litre per unit of<br />
production<br />
%<br />
Increase<br />
2007 175 543 947 573 1.85 14.9%<br />
2006 112 820 699 935 1.61 (1.1%)<br />
2005 122 590 752 091 1.63
3. Non-hazard-<br />
ous waste<br />
3. Hazardous<br />
waste<br />
5. Recycling<br />
5. Greenhouse<br />
gases<br />
<strong>The</strong> 14.9% increase in water consumption in 2007 is assumed to be directly related to our move<br />
to new premises, including the installed improvements in access to on-site produced coffee and<br />
tea, and the installation of better ablution facilities. However, it is our intention, now that we have<br />
become aware of this issue, to monitor our average volume of water consumed per unit of production,<br />
and to rectify any water wastage problems if and when they are identified.<br />
Over the past few years we have noticed a significant increase in the amount of garbage that has<br />
been disposed of in landfills. However, we attribute this informally observed increase in waste<br />
disposal as a direct result of our significant increase in total garment production.<br />
To-date, we do not have formal systems or processes in place to monitor and measure the volume<br />
(by weight) of solid waste sent to landfills via our waste haulage contractors. However, we are<br />
committed to measure and monitor this figure throughout 2008, and to identify ways in which we<br />
might be able to reduce our impact on landfill over-crowding.<br />
As of now, we are already instituting the following mechanisms for reducing our solid waste disposal:<br />
• Increasing the pace of our conversion from manual cutting to computer aided design and<br />
cutting procedures to maximise fabric usage;<br />
• Collecting reasonably large pieces of scrap materials and distributing them to rural economic<br />
development projects that can make use of the fabric to manufacture clothing and<br />
other items; and,<br />
• Collecting and recycling our scrap paper (specifically from patterns and office use) and<br />
plastics.<br />
Although limited in total volumes consumed and/or disposed of, hazardous materials are often<br />
used in our manufacturing facilities, particularly in the maintenance and operation of our facilities<br />
and equipment.<br />
To-date, we do not have formal systems or processes in place to monitor and measure the volume<br />
of hazardous materials consumed throughout our operations,. However, we are committed to<br />
measure and monitor this figure throughout 2008, and to identify ways in which we might be able<br />
to reduce our overall discharge/disposal of these materials.<br />
<strong>The</strong> principles of ‘Renew, Re-Use and Recycle’ are at the core of all small and medium-sized businesses<br />
throughout South Africa. <strong>The</strong> issue is not so much an environmental one, although the<br />
environmental benefits are clear and potentially significant, but rather one of financial prudence.<br />
<strong>By</strong> sticking to ‘the 3 R’s’, we stand as much to gain environmentally as we do financially, through<br />
cost savings and improvements to our overall profitability. As such, Vimal has always attempted to<br />
find ways to reduce our waste haulage through redirecting materials to alternative uses.<br />
That having been said, the process of developing this report has helped us identify new opportunities<br />
for both re-using and recycling materials. Our processes now include:<br />
• <strong>The</strong> donation of unusable end-cuts and/or out of fashion fabrics to local and/or rural economic<br />
development programmes that include sewing projects.<br />
• <strong>The</strong> separate collection of paper and plastics to be collected by local recycling service<br />
providers; and,<br />
• <strong>The</strong> collection of larger pieces of material and donating them for use in local and/or rural<br />
economic development programmes that include sewing projects.<br />
As the monitoring and management of our environmental impacts has become much more rigorous<br />
with the initiation of our sustainability reporting process, we have had to establish reasonable<br />
limits to both the development of new data management systems and improvement processes.<br />
Although we are aware of the issue of global warming, as well as the ways in which each company<br />
can monitor and manage their contribution to greenhouse gas build-up in the atmosphere, we are<br />
not yet in a position to report on our emissions, nor processes to improve our performance.<br />
It is our intention to review our greenhouse gas emissions as part of our 2008 reporting process.<br />
26
SOCIAL RESPONSIBILITY AND COMMUNITY INVESTMENTS<br />
It has been said that “Charity begins at home,” and we believe that in the context of Vimal, our ‘home’ is in fact<br />
our family of managers, supervisors and production staff. As such, we have prioritised our commitment to the<br />
communities in which we operate in terms of:<br />
1. Our employees and their families;<br />
2. Our local communities directly surrounding our operations, and the communities in which our<br />
employees live;<br />
3. Our province, particularly the more rural areas where issues of AIDS, poverty and hunger continue to<br />
threaten lives; and,<br />
4. Our country, particularly those who participate in activities that are consistent with our products, values<br />
and mission.<br />
As mentioned above in ‘<strong>The</strong> Vimal Team’, we annually contribute to the eradication of barriers to education<br />
among the families of our employees. This programme, which requires employees to demonstrate<br />
their commitment to Vimal’s success through low levels of absenteeism, has annually contributed<br />
to the education of more than 130 children per year, at an annual cost to Vimal in excess of R67<br />
000. At the height of this programme in 2006, we paid the school fees for 254 children at a cost of more<br />
than R113 000.<br />
In 2007, we also donated R8 440 to charitable contributions, in support of their community development and<br />
support initiatives. <strong>The</strong> recipients of our support included the Divine Life Centre, the Cerebral Palsy Foundation,<br />
the Heart Foundation and St. Mary’s Hospital.<br />
Vimal, in accordance with the brand protection commitments we have offered our clients, do not donate subquality<br />
garments to employees, charities or local community members. In doing so, Vimal helps our clients<br />
ensure that their brands are linked to garments of extremely high quality.<br />
However, the process of producing this report has allowed us to identify an opportunity to donate our stock<br />
of out of fashion and/or end-cut fabrics and threads to economic development projects in one or more deeply<br />
impoverished communities. It is our hope that through this donation, we will be able to have a ‘material’ impact<br />
on the sustainability of persons who are unable to secure meaningful employment, and we look forward to<br />
providing an update on this initiative in our next Report.<br />
27
STAKEHOLDER ENGAGEMENT<br />
Until recently, we were unaware of the term ‘Stakeholder Engagement’. Granted, we have come to understand<br />
that much of what we do to ensure the ongoing productivity and profitability of our company can be construed<br />
as ‘engagement’, but we are fundamentally will to accept that our engagement processes are ad hoc, with<br />
the exception of our customers, suppliers and employees (including their unions and the NBC). Our formal<br />
engagement includes:<br />
• Our weekly meetings between management and the employees and/or their representatives, to raise and<br />
discuss issues of importance to our employees. This includes their issues/concerns being presented to<br />
management, as well as the presentation of production results, safety briefings, and process or policy to<br />
the employees.<br />
• Regular meetings with customers to discuss new production trends, fabrics, designs and/or orders, as<br />
well as any issues or concerns that either party might have with the other.<br />
• Regular meetings with suppliers to discuss new materials and/or orders, as well as any issues or concerns<br />
that either party might have with the other.<br />
Ultimately, we intend to develop systems that are able to more effectively capture our engagement processes<br />
and outcomes with the following key stakeholders (not exhaustive, nor in order of preference):<br />
• Employees • Standard Bank • YKK Zippers<br />
• Adidas • Berzacks • Speed Zippers<br />
• <strong>Puma</strong> • International Trimmings • Bargaining Council for the<br />
Clothing Industry<br />
• Mr. Price • Maxiloads<br />
• TotalSports (Foschini) • Thai Taffeta<br />
DTI CODES OF GOOD PRACTICE<br />
South Africa’s Department of Trade and Industry (DTI) has launched the DTI Codes of Good Practice: a set<br />
of business principles that are expected to promote and develop corporate behaviour that meets international<br />
best practice standards for corporate responsibility.<br />
<strong>The</strong> Codes come into full effect at the end of February 2008, and at the time of writing this Report, we are in<br />
the process of undergoing a review of our status according to these Codes.<br />
It is our belief that Vimal is, at bare minimum a Category 4 Supplier, based on our own internal assessment<br />
of our Ownership, Management Control, Employment Equity, Enterprise Development and Socio-Economic<br />
Development practices.<br />
Opportunities for significant improvement may exist within our Skills Development and Preferential Procurement<br />
practices, but we are confident that these issues can be reasonably controlled and/or explained due to<br />
the size and nature of our business.<br />
Vimal is committed to completing a full assessment of our Codes status within the first half of 2008, and we will<br />
discuss this assessment in our 2008 Sustainability Report.<br />
28
HUMAN RIGHTS<br />
Vimal is a small family-owned business that has not necessarily been called upon to investigate and/or ascribe<br />
to any international conventions regarding Human Rights. However, as a South African company, we are both<br />
obliged and committed to living up to our national Constitution, and to respecting all laws, including those pertaining<br />
to the fair treatment of employees.<br />
Vimal falls under the watchful eye of the National Bargaining Council for the Clothing Industry, as well as SACT-<br />
WU, the South African Clothing and Textile Workers Union, and we actively encourage and support employee<br />
participation in both of these rights bodies. Moreover, we aspire to meet or exceed the Bargaining Council’s<br />
Collective Agreement rules, recognizing that these rules are merely base level guidelines, and that exceeding<br />
them, within reasonable limits, has created a work environment that encourages reciprocal trust, respect and<br />
commitment between management and our employees.<br />
Shop stewards are aware of the rules and they attend Union meetings on behalf of Vimal. If any problems are<br />
raised by our workers, the stewards have the right, and responsibility, to address them with the Bargaining<br />
Council or Union, without being victimized.<br />
Vimal does not hire child and/or forced labour, nor do we allow any of our suppliers or sub-contractors to engage<br />
in these practices.<br />
Vimal’s security personnel are contracted through the business park in which we are situated, and we have not<br />
been informed of any incidents of excessive use of force by security personnel, nor would we be willing to allow<br />
such behaviour to persist in the exercising of their duties on behalf of Vimal.<br />
LESSONS LEARNED AND THE WAY FORWARD<br />
This is the first time Vimal has attempted to produce a Sustainability Report, and if not for the support and<br />
encouragement of Trialogue we highly doubt we would have been able to generate such a comprehensive<br />
overview of our company, our most material issues, and our opportunities to improve our social, safety, environmental<br />
and economic performance.<br />
One must understand that as a family-owned business, our efforts have always been firmly invested in ensuring<br />
that our customers and employees are ‘happy’, and that our business remains financially strong and<br />
healthy. Although we now recognise that our data management systems were not necessarily giving us all of<br />
the information we might have needed to maximise our efficiencies, we were nonetheless in a position to find,<br />
and analyse, information for the purpose of informing our wide range of stakeholders.<br />
In short, the process of developing this Report has been a lengthy learning exercise, yet we quickly realized<br />
that the process of reporting affords significant benefits in terms of being able to use statistics to evaluate<br />
our performance, including the conducting of comparisons, particularly with respect to issues that are directly<br />
related to our employees.<br />
This process has created an opportunity for us to re-think our bonus structures to encourage full attendance<br />
and to motive the employees to attend work regularly. It has also assisted us with attempting to identify problems<br />
within our business, as well as to find ways to address them.<br />
In speaking to our staff, Trialogue has helped us better understand the issues that they have apparently felt<br />
unable to bring to our attention, and has helped create mechanisms for addressing each of their concerns.<br />
As a direct result of the reporting process, we are now committed to:<br />
• Reducing the amount of solid waste we send to landfills sites by:<br />
- Increasing the pace of our conversion from manual cutting to computer aided design and cutting<br />
procedures to maximise fabric usage;<br />
29
- Collecting reasonably large pieces of scrap materials and distributing them to rural economic<br />
development projects that can make use of the fabric to manufacture clothing and other<br />
items; and,<br />
- Collecting and recycling our scrap paper (specifically from patterns and office use) and plastics.<br />
• Monitoring our electricity and water consumption figures, normalised to units of production, to ensure that<br />
Vimal uses both of these scarce resources in as efficient a manner as possible.<br />
• Creating a mechanism for employees to access some form of catering services, most likely in a designated<br />
section of our parking lot (away from our residential neighbours).<br />
• Creating an additional (external) mechanism for employees to communicate complaints and/or recommendations<br />
to the management team.<br />
• Donating up to 50 of our older sewing machines to a fledgling rural economic development centre run by<br />
Cotlands, a national HIV/AIDS charity, in a community directly affected by rampant unemployment and an<br />
HIV-infection rate in excess of 60%.<br />
• Clearing out our warehouse and donating surplus fabric and accessories to economic development<br />
projects that can produce goods to assist in their own sustainability.<br />
• Reviewing and updating this Report on an annual basis, using the tools and knowledge we have gained<br />
this year to improve our data collection, collation and reporting procedures.<br />
REQUEST FOR FEEDBACK<br />
Because this is our first attempt at producing a Sustainability Report, we are mindful of the possibility that we<br />
have not provided a comprehensive discussion of the information that is important to our many stakeholders.<br />
As such, we are hopeful that you, the reader of this Report, will contact us and offer us your views on the quality<br />
and usefulness of this Report.<br />
Should you have any questions about our company, or comments about anything contained within this report,<br />
please contact Khemie via email to at khemiep@vimal.co.za<br />
30
Standard Disclosures<br />
GRI G3 APPLICATION LEVEL REQUIREMENTS<br />
As a first attempt at applying the GRI G3 guidelines to our Sustainability Report, Vimal has decided to seek a<br />
C+ level of application. <strong>The</strong> following three tables provide a summary of the GRI’s requirements as well as a<br />
quick reference to our self-assessment of compliance to the C+ level.<br />
For an indicator-by-indicator discussion of our Report’s compliance to all of the required indicators, please<br />
email nayan@vimal.co.za. For details of the process employed by Trialogue Assurance Services to afford<br />
Vimal the required Third Party Assurance over this Report, please email michael@trialogue.co.za.<br />
Report Application Level C C+ B B+ A A+<br />
G3 Profile<br />
Disclosures<br />
G3<br />
Managment<br />
Approach<br />
Disclosures<br />
G3<br />
Performance<br />
Indicators &<br />
Sector<br />
Supplement<br />
Performance<br />
Indicators<br />
* Sector Supplement in final version<br />
Report on:<br />
1.1<br />
2.1 – 2.10<br />
3.1 – 3.8, 3.10 – 3.12<br />
4.1 – 4.4, 4.14 – 4.15<br />
31<br />
Report Assured by Trialogue Assurance Services<br />
Report on all criteria<br />
listed for Level C plus:<br />
1.2<br />
3.9, 3.13<br />
4.5 – 4.13, 4.16 – 4.17<br />
Not Required Management Approach<br />
Disclosures for each<br />
Indicator Category<br />
Report on a minimum<br />
of 10 Performance<br />
Indicators, including at<br />
least one from each of:<br />
social, economic, and<br />
environment<br />
Report on a minimum<br />
of 20 Performance<br />
Indicators, at least one<br />
from each of: economic,<br />
environment, human<br />
rights, labour, society,<br />
product responsibility<br />
Report Externally Assured<br />
Same as requirement for<br />
Level B<br />
Management Approach<br />
Disclosures for each<br />
Indicator Category<br />
Respond on each core<br />
G3 and Sector Supplement*<br />
indicator with due<br />
regard to the Materiality<br />
Principal by either: a)<br />
reporting on the indicator<br />
or b) explaining the<br />
reason for its omission<br />
Report Externally Assured<br />
Mechanised<br />
embroidery is an<br />
important valueadding<br />
service for<br />
our clients.
VISION & STRATEGY ECONOMIC SOCIAL<br />
Strategy and Analysis<br />
Core Additional Core Additional<br />
Economic Performance Employment<br />
1.1 EC1 LA1 LA3<br />
1.2 EC2 LA2<br />
Organisational Profile<br />
EC3 Labour/Management Relations<br />
EC4 N/A LA4<br />
2.1 Market Presence LA5<br />
2.2 EC6 EC5 Health and Safety<br />
2.3 EC7 LA7 LA6<br />
2.4 Indirect Economic Impacts LA8 LA9<br />
2.5 EC8 N/A EC9 Training and Education<br />
2.6<br />
LA10 LA11<br />
2.7<br />
ENVIRONMENTAL<br />
LA12<br />
2.8 Materials Diversity and Opportunity<br />
2.9 EN1 LA13<br />
2.10 N/A EN2 LA14<br />
Report Profile Energy Strategy and Management<br />
3.1 EN3 EN5 N/A HR1 HR3<br />
3.2 EN4 EN6 HR2<br />
3.3 EN7<br />
3.4 Water Non-discrimination<br />
Report Scope and Boundary<br />
3.5 Biodiversity<br />
EN8 EN9 N/A HR4<br />
EN10 N/A<br />
3.6 EN11 EN13 N/A HR5<br />
32<br />
Freedom of Association and Collective Bargaining<br />
3.7 N/A EN12 N/A EN14 N/A Child Labour<br />
3.8 N/A EN15 N/A HR6<br />
3.9 Emissions, Effluents and Waste Forced and Compulsory Labour<br />
3.10 N/A EN16 EN18 HR7<br />
3.11 N/A EN17 EN24 N/A Security Practices<br />
GRI Content Index EN19 EN25 N/A HR8<br />
3.12 EN20 N/A Indigenous Rights<br />
Assurance EN21 N/A HR9 N/A<br />
3.13 EN22 Community<br />
Governance, Commitm ents and<br />
Engagement<br />
EN23 N/A SO1<br />
Products and services Corruption<br />
EN26 SO2<br />
4.1 EN27 SO3<br />
4.2 Compliance SO4 N/A<br />
4.3 EN28 N/A Public Policy<br />
4.4 Transport SO5 SO6 N/A<br />
4.5 N/A EN29 Anti-competitive Behaviour<br />
4.6 N/A Overall SO7 N/A<br />
4.7 N/A EN30 Compliance<br />
4.8 SO8 N/A<br />
4.9 Customer Health and Safety<br />
4.10 N/A PR1 PR2 N/A<br />
Commitment to External Initiatives<br />
Products and Services<br />
PR3 N/A PR4 N/A<br />
4.11 N/A PR5<br />
4.12 Marketing Communication<br />
4.13 PR6 N/A PR7 N/A<br />
Stakeholder Engagement<br />
Customer Privacy<br />
4.14 Compliance<br />
4.15 PR9 N/A<br />
4.16<br />
4.17 N/A<br />
GRI CONTENT INDEX<br />
For our complete GRI G3 responses table, including a map of our content, please email<br />
khemiep@vimal.co.za.<br />
Included<br />
Not included, potential improvement area<br />
Included, but requires future improvement<br />
Not applicable<br />
PR8 N/A
NON-INDEPENDENT ASSURANCE STATEMENT<br />
To the Owners and Management of Vimal Clothing cc (hereafter, ‘Vimal’):<br />
Trialogue Assurance Services (hereafter, ‘TAS’) was engaged by the Global Reporting Initiative (GRI) to assist<br />
Vimal, and two other South African suppliers of <strong>Puma</strong> AG, with the development of this Sustainability Report.<br />
This project, entitled “Transparency in the Supply Chain,” required that TAS assist the three participating companies<br />
develop an understanding of Sustainability Reporting, and help to facilitate the development of this<br />
report.<br />
Because of our involvement in the development of this report, TAS is not in a position to provide ‘Independent<br />
Third Party Assurance’ over the contents herein. However, it has been duly noted that the data presented<br />
neither belongs to TAS, nor was supplied by TAS, and therefore our review of this information still positions us<br />
to provide Vimal, and its many stakeholders, with this ‘Non-Independent Assurance Statement’ over the content<br />
of this 2007 Sustainability Report, ‘the Report’.<br />
<strong>The</strong> Report presents Vimal’s sustainability performance over the period 1 January to 31 December 2007, including,<br />
where available, sustainability trend data for previous years. This statement represents our assurance<br />
opinion. TAS’s responsibility in performing its assurance activities is to the management of Vimal alone and in<br />
accordance with the terms of reference agreed with them.<br />
Assurance objective<br />
<strong>The</strong> objective of the assurance process is to provide stakeholders of Vimal with a ‘Limited Assurance’ opinion<br />
on general accuracy and completeness of the information presented in this Report. This is confirmed through<br />
multiple reviews of the data submitted by Vimal and the underlying systems, processes and competencies that<br />
support the Report.<br />
Scope of work performed<br />
Review of quantitative content of the Report<br />
Among other duties, TAS was engaged to assist Vimal with assessing the completeness, accuracy and consistency<br />
of the data contained within this report, and to test that assertions made within the report can be deemed<br />
both ‘reasonable’ and ‘supportable’ by the relevant sustainability data presented herein. Moreover, TAS was<br />
charged with testing drafts of the Report to determine the degree to which it was consistent with the reporting<br />
requirements of the GRI G3 Guidelines.<br />
TAS limited the scope of the assurance process to a ‘limited assurance’ review of the quantitative data submitted<br />
by the management team at Vimal, for collation and reporting herein, as well as the Reports alignment to<br />
the GRI’s G3 reporting guidelines<br />
Assurance methodology<br />
<strong>The</strong> process used in arriving at this assurance statement is based on the GRI’s G3 guidance and other best<br />
practices in sustainability reporting assurance. Our approach to assurance included the following:<br />
• a review of Vimal’s sustainability measurement and reporting procedures, background documentation<br />
and data collection procedures;<br />
• a review of the data submitted for inclusion in the Report for any significant anomalies; and,<br />
• an examination of the aggregation and/or derivation of, and underlying evidence for, data and statements<br />
included in this Report.<br />
In determining the GRI G3 application level of the Report, we performed the following exercises:<br />
• Assisting in the drafting of the Report to ensure that the content of the Report, including discussions<br />
regarding the determination of sustainability context and coverage of material issues, was duly aligned<br />
with GRI G3;<br />
33
• A review of the approach of management to addressing topics discussed in the Report; and<br />
• A confirmation that at the requisite number of performance indicators had been covered in the Report.<br />
Independence<br />
Because TAS was engaged to provide report development assistance to Vimal, through the engagement of<br />
TAS by the GRI as the South African consultants on the ‘Transparency in the Supply Chain’ project, ours is<br />
not an ‘Independent’ assessment of this Report. Our involvement with Vimal significantly hinders our ability<br />
to remain fully independent, but does not necessarily preclude us from offering some form of assurance to<br />
stakeholders.<br />
Because Vimal is a relatively small organisation, it was determined that Vimal cannot afford to seek external/<br />
independent third party assurance. However, the involvement of TAS is reviewing Vimal’s data allows us a<br />
unique insight into the content of this Report, and permits us an opportunity to make comment over the accuracy,<br />
consistency and completeness of the data contained herein.<br />
Findings<br />
In general, Vimal’s sustainability reporting processes are adequate to meet the GRI’s G3 ‘Application Level C’.<br />
However, it was found that:<br />
• Vimal’s process to identify its ‘Most Material Issues’ was informal in nature, albeit improved through this<br />
reporting process, and the company still requires a formal process to actively engage stakeholders on a<br />
ranged of ‘sustainability-specific issues’;<br />
• Although significant steps have already been taken to improve the quantity and quality of meaningful data<br />
(particularly production efficiency and environmental data), more work needs to be undertaken to ensure<br />
that Vimal sets and achieves specific sustainability performance targets;<br />
• Vimal has not yet undertaken to complete an assessment of its compliance to the DTI Codes of Good<br />
Practice (fully implemented as of the end of February 2008).<br />
Recommendations<br />
• Vimal should ensure that stakeholders (internal and external) are adequately engaged to comment on this<br />
Report and/or to inform the content of the next Report.<br />
• Vimal should actively engage its key stakeholders to ensure that the company is effectively addressing<br />
stakeholder-specific concerns, and that any ‘new’ issues are incorporated into Vimal’s ongoing sustainability<br />
strategy.<br />
• Vimal should undertake to complete its compliance to the DTI Codes of Good Practice within the 2008<br />
calendar year, in order to enhance the quality and/or relevance of this report relative to local stakeholder<br />
expectations.<br />
• Vimal should ensure that future reports include improvements in the quality of data, particularly those<br />
pertaining to the DTI Codes of Good Practice and the environment.<br />
Opinion<br />
For all data under review, errors identified during our assessment were addressed by Vimal prior to finalising<br />
this Report, and nothing came to our attention to lead us to believe that the final data is not reliable. As a result,<br />
we believe that the sustainability data in this Report gives a fair representation of Vimal’s sustainability performance,<br />
and that this report adequately represents a GRI G3 C level report.<br />
Trialogue Assurance Services<br />
29 February 2008<br />
34
CONTACT DETAILS<br />
Vimal Clothing Enterprise C.C.<br />
Tel: +27 31 538 2400<br />
Fax: +27 31 539 6874<br />
Address: Fairways Park<br />
4 Fairways Avenue<br />
Mount Edgecombe<br />
Durban<br />
South Africa<br />
4300<br />
Contact Person: Miss Khemie Prithipal<br />
Khemiep@vimal.co.za<br />
<strong>The</strong> graphic design and layout of this Report was<br />
completed by Candice Ekermans, our Johannesburg-based<br />
independent design consultant.<br />
We are very pleased to support Candice with this<br />
project, as she is a living testament that courage<br />
and tenacity can overcome all challenges.<br />
Although one might not notice it when reviewing this<br />
Report, Candice is legally blind, which for others might<br />
have suggested no future in the field of marketing<br />
materials development.<br />
We hereby wish to compliment and thank Candice<br />
for her excellent work. Candice can be contacted at<br />
minxgraphics@gmail.com.