Laska Furniture: The tough road to the Rs 50 million benchmark

Laska Furniture is taking the last leap to become a medium-sized company. Since 2014, it transformed itself from a retail company to an export manufacturing firm and has been receiving since the acclaim of SME support authorities.

According to officials of the Small and Medium Enterprises Development Authority (SMEDA) and Enterprise Mauritius, Laska Furniture is one of the most promising SMEs in the furniture business right now. Having s쳮ded throughout the year 2015 to penetrate the SADC market where it is selling its office furniture, Laska has impressed. It has just acquired one valuable piece of machinery that should help it increase its productivity level in 2016.

This year, Laska plans to open a carton manufacturing firm to lower cost and remain competitive on the international market. However, Lawrence Cheong, its Malaysian owner and CEO, is of the view that Laska’s growth will be hampered by the lack of skilled labour on the domestic market.

Lawrence Cheong has settled in Mauritius in 1997. As a furniture specialist, he first saw Mauritius as a market, importing goods from Malaysia and selling locally since the last 15 years. In 2014, Laska bloomed. Lawrence Cheong saw opportunities in the SADC and COMESA duty free agreements that will enable the company to sell to the fast developing markets of East Africa and decided to set up a manufacturing plant. It is worth mentioning that the buyers of Laska are found in South Africa, Mozambique, Kenya and Tanzania. “The local market is too small for Laska for it to expect high returns on investment that can keep us going in the long term”, Lawrence Cheong told Business Magazine. Recently
though, his business won some tenders in both the private and the Among his local clients, he now counts the government of Mauritius itself, Medine and a few call centres. In 2015, Laska registered aRs 30 million turnover which makes of it an SME in Mauritian terms. As
it wants to grow beyond the Rs 50 million benchmark in the years to come, the export market does not seem to be the only option.

Launching of a carton box plant

Exporting furniture can be costly from Mauritius. Freight charges, production and packa-ging costs weigh heavily on the performance of this activity on the international stage. If we take packaging for example, Lawrence Cheong tells us it has to be imported. To keep the boat afloat, Laska will launch its own carton box factory soon. It has already been registered as Laska Boxes Industry. This subcompany will help Laska reduce its dependency on imported cartons and may in the future even supply other Mauritian producers.

For the time being, the South-Eastern Countries are heavily dependent on Chinese producers because of their capacity for mass production at low prices. However, Laska intends to offer African buyers the alternative of buying closer to them at equally low prices and better quality. The year 2015 has been great for this SME. With the help of Enterprise Mauritius, it has been able to land contracts in the aforementioned countries and is confident to see its sales grow there as time passes. For 2016, Laska intends to send 20-30 containers abroad. Its next target is Madagascar whose economy is painfully recovering from its past political instability.

To help meet rising backlog orders, Laska invested in compu-terised machinery imported from Italy that costed around Rs 20 million. This machinery has been proudly spoke about by SMEDA and Enterprise Mauritius officials to Business Magazine saying it is this kind of technology that must be used by small businesses for them to achieve middle size.