Multinationals textile company pitching their tent in Ethiopian textile Industry

YarnsandFibers News Bureau 2014-10-25 14:00:00 – Ethiopia

Ethiopia, Africa’s second most populous nation with the growing influx of investment in its textile business will enhance the country’s efforts to improve local companies engaged in the manufacturing sector.

While The Economist projects an annual growth of 7 to 8 percent through 2016 for the country, Ethiopia’s Government Growth and Transformation plan places growth rates of at least 11.2 percent per annum during a decade long period it set to achieve a middle-income status.

One of the important sectors that will likely play a primary role in achieving this status is the manufacturing industry, for which textile is grouped into.

Many multinational textile companies have started pitching their tent in Ethiopian textile sector. This week, BDL Group, a Bangladeshi company announced a $30 million (765 Million Birr) investment , which will go into building a textile and garment factory in Mekele City, Ethiopia which will employ at least 3,000 locals.

According to reports, construction will commence by December and production will be delayed till the last quarter of 2015.

BDH’s investment comes barely a month after Chinese textile company, Jiangsu Lianfa Textile Co. Ltd revealed its plan to build a $500 million textile factory in the East African country after making similar pre-investment assessments in Kenya, Uganda, and Tanzania.

Jiangsu Lianfa Textile Co. is a leading textile company with extensive operations in various countries in where it sells woven fabric, apparel and textile. Its plant, which will be situated in Ethiopia’s capital city, Addis Ababa, is expected to create at least 20,000 jobs when operational, inside sources have revealed.

The Ministry of Trade and the Chinese Kingdom Holdings Ltd has also signed an agreement that will allow the company invests in the country. The agreement was inked after a delegation of Chinese investors held talks with the Ethiopian Prime Minister Hailemariam Desalegn.

Kingdom Holdings Ltd is number one producer of linen, and it has been a major exporter of such products for the past 11 years in China. It has the capacity to produce more than 11 thousand tones of textile each year.

The textile factory to be established by Kingdom Holdings Ltd is expected to create job opportunities for more than five thousand people.

According to Thomas Ballweg, a procurement and technical consultant at GermanFashion; Ethiopia offers a number of advantages that could make it play a major role in the textile/fashion business.

On the one hand are the lower costs – much lower than in China – with 80 million people living there. And, it’s near the sea – and quick to get to Europe via the Suez Canal.

Last year, Ethiopia made $111.45 million from exporting textile. Ethiopian textiles are mostly exported to China, Italy, Germany, Turkey, China, Italy and the US.

Ethiopia’s efforts in attracting and assisting investors are extremely encouraging. It is the overall economic growth of Ethiopia that has been attracted multinational company to come here.

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