Durban - Family run company Universal Lace and Fabric Mills, the only raschel lace manufacturer in southern Africa, has seen its business grow in the last few years.

Local clothing companies that it supplies have taken advantage of the Africa Growth and Opportunities Act (Agoa), which gives African textile and apparel manufacturers preferential access to US markets.

The business, started 35 years ago by a consortium of 10 families, is now exploring direct export opportunities.

Kamalesh Naran, a director of Universal Lace, said: "We need to focus on our customers' export drives and their efforts to increase their market share.

"But there is an opportunity for us to directly export particularly into other parts of Africa, such as Mauritius."

Tapping into export markets could help shield Universal Lace from the impact of cheap imports from the Far East, Brazil and Mexico, as well as from the vagaries of the local market.

"To maintain and grow our market share we need to increase production at lower costs and find new markets. We are working towards increasing exports and forming strategic alliances with other clothing manufacturers that are exporters.

"This will give us critical mass and enhance our market share in non-traditional markets," Naran said.

The company has faced the challenge of a drop in orders from chain stores, which have reduced their lead times.

In addition, high labour costs and relative inefficiencies in South Africa compared to other countries had put major downward pressure on prices, he said.

Universal Lace produces about 120 tons of lace each year for about 165 customers. Of these, about 15 are exporters contributing 15 percent to Universal Lace's turnover. This contribution is growing steadily.

Universal Lace's customers primarily use its products for apparel, specifically intimate apparel and ladies outwear. Its products are also used in luggage, shoe and coffin manufacture.

Universal has a licencing agreement with Noyon, the largest independent international lace manufacturer, to manufacture its designs locally. This means the company is on a par with European competitors in terms of design.

"We can compete on price and quality but not necessarily on technology," Naran said.

He estimated that it would cost the company about R20 million to upgrade its knitting machines to the point where they would be on a par with those of European lace manufacturers.

"Increased exports from the clothing sector has resulted in a paradigm shift to thinking globally and not nationally," Naran said.