Ethiopia pushing to create a textile industrial complex for S Korean cos

YarnsandFibers News Bureau 2016-05-28 12:00:00 – Addis Ababa

South Korea and Ethiopia are expected to observe the signing of some 40 memorandums of understanding (MOUs) that could further boost their political and economic ties as their leaders President Park Geun-hye and Ethiopian Prime Minister Hailemariam Desalegn prepare to hold talks.

At the talks, the two leaders are expected to discuss a wide-range of issues, including trade, investment and development cooperation , a senior South Korean official said.

The MOUs call for, among other things, South Korea’s provision for a US$500 million loan to Ethiopia from 2016 to 2018, a move that Seoul says will help South Korean companies make inroads into Northeast African country’s market.

Ethiopia is pushing to create a textile industrial complex for South Korean companies in Adama, a city in central Ethiopia. It is also considering a move to offer tax benefits to South Korean textile companies to attract investment.

South Korea said its textile companies can export intermediate goods that can be made into finished products in Ethiopia. These goods can be shipped to the United States and the European Union without tariffs, a move that could offer a competitive edge to South Korean companies.

South Korea and Ethiopia are expected to sign a double taxation avoidance pact that could facilitate South Korean companies’ investments in Ethiopia as the deal could reduce tax burden on South Korean companies.

Youngone Corporation, South Korean textile and footwear manufacturer, disclosed it aims to invest in the textile industry of Ethiopia. The

corporation’s Chairman. Kihak Sung, expressed its desires after holding talks with Ethiopian Prime Minister, Hailemariam Dessalegn. Youngone is ready to invest in apparel and textile manufacturing industries as quickly as possible.

The corporation wished to invest hugely in Ethiopia for its sees textile as its gateway to Ethiopia’s market.

The company had made feasibility studies in Bole Lemi as well as Adama industrial parks. Youngone may lure other South Korean textile manufacturers to Ethiopia.

Meanwhile, the two countries are expected to agree to hold regular consultations on bilateral and multilateral issues.

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