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Description
Saba Ltd., a seasoned shoe manufacturer established in 1995, stands as one of Bulgaria''s enduring footwear producers, distinct from any legacy of the socialist era. The company''s product range spans men''s, women''s, and children''s footwear, encompassing sandals, shoes, boots, and loafers. Notably, since 2016, Saba has ventured into a new market niche: ice skate production, constituting an impressive 8% of the total production output. Presently, the majority of their footwear production caters to children, with approximately 20% dedicated to sports shoes for men and women. The company''s annual production capacity fluctuates between 70,000 to 100,000 pairs of shoes, contingent upon complexity.
Saba Ltd. faces mounting challenges in meeting client demands, grappling with precision issues in the manufacturing process and product quantities. Critical components within their current production line have remained unchanged for over 15 years, resulting in frequent equipment breakdowns that escalate material wastage. Operating predominantly with raw materials owned by their clients, each contract imposes specific material waste thresholds that must not be exceeded.
The ongoing project is not only pivotal for the company''s short and medium-term growth but is instrumental in its survival, ensuring the sustenance of enduring partnerships with global brands. Simultaneously, it propels the company toward establishing its own brand identity. The acquisition of a tailor-made Eco-materials shoe production line, employing the Strobel sewing method, will facilitate a significant boost in production capacity, while fostering energy efficiency and curtailing material and water wastage.
Summary of project results
Saba Ltd. faces several key challenges:
Adaptation to Market Shifts: The shift in consumer preference towards high-quality, sportswear shoes made from advanced synthetic materials has decreased orders, as Saba’s current equipment cannot handle these materials efficiently or precisely. This has led to longer production times and increased the risk of material damage, putting pressure on the company to adapt or risk losing customers.
Dependency on Foreign Brands with Low Profit Margins: Reliance on European brands provides stability but limits growth, as low profit margins hinder investments in innovation, production improvements, and independent brand development. This dependency also reduces Saba’s ability to create high-value products under its own brand.
Rising Global Competition: Increased international competition has highlighted the need for quality production, reasonable pricing, and flexibility. Competing in today’s market requires more than low labor costs, and Saba Ltd. must enhance its operational efficiency and product quality to stay competitive.
In summary, Saba Ltd. needs to modernize its equipment and production processes to align with market trends, develop its brand, and improve operational flexibility to overcome these challenges.
The project has allowed Saba Ltd. to design a custom-built, eco-focused sewing line that aligns perfectly with its needs, based on a detailed analysis of the current production challenges and market demands. This new production line, built with the Strobel Construction method, is specifically tailored for athletic and eco-material shoes, providing numerous benefits for production capacity, energy efficiency, and environmental impact.
Key Features and Benefits of the New Line:
Strobel Construction Sewing Method: This method, often used in athletic shoes, creates a lightweight and flexible "sock-like" structure by stitching the shoe’s upper material directly to a fabric bottom. This technique enhances comfort and flexibility, which are key features for sports shoes and everyday wear that Saba aims to produce more of.
Eco-Materials Integration: The line is designed to support eco-leather materials, enabling Saba Ltd. to pivot away from natural leather. This shift aligns with the increasing demand for sustainable, synthetic options that use less water in production and have a reduced environmental impact. By incorporating these eco-materials, the company is poised to appeal to a growing consumer base that values sustainability.
Enhanced Energy Efficiency: The line is expected to improve Saba Ltd.’s energy efficiency by 27%, significantly reducing the environmental footprint associated with production. This is achieved through modernized equipment that minimizes power usage while maximizing output.
Expanded Production Capacity: With 26 single-needle sewing stations, 4 double-needle stations, and specialized equipment for side sewing, sole pressing, and heel finishing, the line will significantly boost the company’s production throughput. This increase in capacity will help Saba Ltd. fulfill larger orders and respond to market shifts more flexibly.
By investing in this line, Saba Ltd. not only increases production capacity but also aligns with future market trends favoring eco-friendly materials and efficient, high-quality manufacturing processes. This setup supports the company’s goals of expanding its product range, attracting environmentally conscious consumers, and enhancing its competitive position in a rapidly evolving market.
The project has driven significant growth and operational improvements for Saba Ltd., both in terms of financial performance and environmental responsibility. The results of the project highlight how the strategic investment in modern, eco-efficient technology and process improvements has transformed the company’s competitive position in the footwear market, are as follows:
- By the end of 2024, Saba Ltd. anticipates an impressive 52% increase in turnover compared to 2021, a result of its expanded production capabilities and the appeal of its eco-friendly product line. This growth reflects the company’s improved ability to meet demand for sustainable, high-quality footwear.
- The company expects to more than double its net operational profit by the end of 2024, projecting a 110% rise over 2021 levels. This significant profitability boost is due to streamlined processes, energy-efficient machinery, and higher output capacity, enabling Saba Ltd. to reduce costs while capitalizing on market opportunities.
- Introduction of Innovative Technology: The acquisition of a new, tailor-made production line has revolutionized Saba Ltd.''s operations, allowing the company to efficiently manufacture eco-friendly footwear using the Strobel sewing method. This line, specifically designed for eco-materials, enhances precision and minimizes material waste, giving Saba Ltd. a modern production edge.
- CO2 Emissions Reduction: The new production equipment not only enhances production efficiency but also reduces CO2 emissions, supporting Saba Ltd.’s commitment to sustainability and helping the company to meet increasingly stringent environmental standards.
- Enhanced Use of Materials: With machinery that accommodates the precise handling of eco-friendly synthetic textiles, Saba Ltd. has significantly reduced material waste. This measure supports both cost-efficiency and environmental goals, as the company can now optimize material usage and decrease production waste.
- Ten New Positions: The project has also contributed to regional employment, with ten new jobs created to support the expanded operations. This growth in staffing reflects Saba Ltd.’s enhanced production capacity and its need for skilled labor to operate the advanced technology introduced through the project.