Phillips-Van Heusen (PVH) Corporation - a giant American clothing company and owner of the Tommy Hilfiger, Calvin Klein and Heritage brands after visiting Ethiopia has put forward 10 investment prerequisite to the Government of Ethiopia (GoE).
The prerequisites include consideration of tax incentives, logistics issues, priority for electricity power and getting a ready-made industrial park, according to sources.
The company officials visited Ethiopia, along with 27 textile and garment factories from different countries, last week, for the third time in two months. The second round visit was made by 40 companies led by Mark Green, vice president of the company in May 2014.
The third stay saw a high level meeting between the representatives of PVH and government officials, including Sisay Gemechu and Tadesse Hiale, both state ministers for Industry, and Likyeleshe Abay, deputy commissioner of the Federal Investment Commission (FIC), as well as representatives from the Textile Industries Development Institute (TIDI), on Wednesday August 28, 2014, at the Radisson Blu hotel on Tito Street.
During the discussion, the company officials submitted 10 preconditions in written form to the government to make adjustments. The officials decided to form a government committee to review questions forwarded by the Company as some of the issues demand a policy reform.
PVH, which was established in 1881, generated a revenue of 8.2 billion dollars in 2013, with a 967 million dollar profit. Its products are sourced from factories in Bangladesh, Sri Lanka, China, Honduras, Hong Kong, Indonesia, the Philippines, Malaysia, Mongolia, Singapore, Thailand and Taiwan. It sells these products through 700 outlets across different countries, where it employs over 12,000 people.
The government wants this company to take its investment to Dire Dawa or Hawassa, but the company has its eyes on the Bole Lemi Industrial Zone in Bole District. Phase one of this zone has 20 shades on 156ha; five of these shades have already been taken by various companies, including George Shoe; the remaining 15 shades, under construction have already been given to 22 companies. PVH wants the government to give it a ready-to-use industrial park for all the factories that it wants to bring to Ethiopia to dwell on phase two which will be constructed on 186ha of land.
The officials of PVH also visited Dire Dawa, 515km east of the capital, and Hawassa, 273km south of the capital in the Southern Region - two areas that the government wants to promote as industrial zones.
The company wanting to make its way in to Ethiopia is seeking to benefit from low labour and input costs, as well as enough land to invest. H&M (Hennes & Mauritz), from Sweden, with its own brand clothes has maintained an office in Ethiopia for the last two years, has not done much.
Currently, in Ethiopia there are 17 textile factories and 1,120 cotton farms, despite the textile and garment export performance have been disappointing over the last four years. The government has identified the unreliable inputs supply as a reason for the poor performance of the sector and is deciding to establish a four billion Birr enterprise to supply inputs to the local textile and garment industries.
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