Service Industries, the largest shoe manufacturer in Pakistan, is set to inaugurate a new solar-powered factory in March 2020 after obtaining a contract from Genesco for the production of one million pairs of shoes under its licensed Dockers brand name.
The company, which is also known as the Servis Group, has purchased land nearby to have the option of adding a similar amount of capacity in October.
Genesco, which doesn't own the rights to the brand in Europe, has been making about three million pairs of Dockers shoes in China, but the recently imposed U.S. tariffs on Chinese footwear have accelerated a diversification of its sources, and Pakistan came out as an interesting alternative to Vietnam and other countries.
Servis, which is a regular exhibitor at the Expo Riva Schuh and Micam fairs, already doubled its production capacity in May after signing contracts with some important European brands that don't necessarily have a presence in the U.S. market for other reasons, including the quality of its production. It manufactures exclusively leather shoes, using mainly local leather, but in some cases, as with Caprice, it uses leather from other sources.
The company has many other clients in Europe, including Zara (with which it recently expanded the collaboration), Kurt Geiger, Next, Valleverde and the Russian branch of Salamander. It has been in discussions lately with the Danish Bestseller group for the manufacture of Jack & Jones shoes with a dedicated construction for the outsole.
According to Servis' business development manager, Abdul Moeed, Bestseller is attracted in part by the company's environmental commitment to green energy through its existing 2-megawatt solar power plant. Servis claims to have installed the solar-powered shoe manufacturing plant in Asia.
Moeed claims that Servis is very flexible, occasionally accepting orders for short runs of only about 200 pairs. Another asset is the fact that its production is vertically integrated. In manufacturing about 20,000 pairs per day with 10,000 workers, including stitchers, the company makes its own uppers and all kinds of soles and heels. It has its own injection-molding facility and can make polyurethane, EVA and rubber soles. It is currently setting up a relatively inexpensive system for the development of molds by the end of next year in collaboration with a partner.
Founded in 1941, Servis is a stock-listed, family-controlled company run by two brothers. It also makes tires and tubes for motorcycles and bicycles, and it is also involved in retailing. However, its shoe exports have been a growth driver recently, contributing to the group's profitability because of the devaluation of the Pakistani rupee. In the first nine months of this year, the group's total sales went up by 29 percent to 21.9 billion Pakistani rupees (€127.6m-$142.0m), and its pre-tax profit jumped by 105 percent to PKR 1,036 million (€6.0m-$6.7m).
More than half of Servis' shoe production is exported. The company estimates that it represents nearly two-thirds of Pakistan's total exports of leather shoes, which have been growing rapidly in recent years.
In the four months to October, which correspond to the first quadrimester of the country's fiscal year, Pakistan's total shoe exports rose by 52.4 percent to 4.9 million pairs and grew by 18 percent in value to $45.2 million. Exports of leather shoes, which represented 85 percent of total footwear exports in value, rose by 30 percent in volume and by 13 percent in value.