Seven advantages and potential of developing textile and garment industry in Ethiopia

Domestic textile and garment processing links to Vietnam, Kampuchea and other parts of the country after the transfer, encountered a rapid rise in the local labor costs. Professor Yifu Lin as the representative of the domestic experts believe that the young labor resources and low prices of the continent of Africa, the ultimate destination for the transfer of labor-intensive industries.
Does Africa have the potential to undertake China's textile and garment industry? Looking for answers, led by Vice President Gao Yong, special investment research Chinese Textile Industry Association in April this year, the domestic part of the industry association, the organization of key enterprises on behalf of a total of 14 people in Ethiopia textile and garment industry.
In Egypt, Ethiopia and the delegation of the prime minister's office, Ministry of industry, Ministry of agriculture, development and Investment Committee, textile department Ethiopia textile and Garment Manufacturers Association carried out alone or in combination with the work of the talks. In addition, the delegation also visited Chinese private enterprises to invest in the East Industrial Park and the Ethiopian government investment Bole Lemi Industrial Park, and visited Turkey Ayka investment group of textile and garment enterprises Ayka Addis and part of South Korean enterprises.
Through talks with Ethiopian government departments communication and investigation of industrial parks and enterprises, have a more comprehensive understanding of the Ethiopian delegation and the investment environment to attract foreign investment incentives, and great potential for the development of textile and garment industry Ethiopia positive views.
Ethiopia's textile and garment industry is still in its infancy. At present, the Ethiopian textile and garment enterprises is less than 100, the vast majority of smes. 2012-2013 fiscal year textile and apparel exports of $99 million. 2013 yarn production capacity of 370 thousand tons, clothing for the 80 million. Visitors watch, Ethiopia in the world textile and apparel supply chain is in a position relative to the edge.
Ethiopia, a textile and garment industry's development potential and advantages
1 Ethiopia has a relatively stable political and economic environment, the political risk of small investment. At present, the Ethiopian ruling EPRDF rule in the country has a strong base of stable society. The ruling party and the central government have long been committed to economic development and poverty eradication. Since 2003, Ethiopia has maintained more than ten years of nearly GDP growth in the number of 2, the macro economy to maintain a good momentum of development, the ambitious GTP plan for the past five years, more relevant laws and regulations of investment. Ethiopia and Chinese good political relations, economic and trade cooperation is increasing, has signed a bilateral investment protection agreement. Overall, investment in Ethiopia political risk is small, is conducive to long-term investment.
2 the central government takes the textile and garment industry as a priority development industry, relying on the special industrial park, and a variety of incentives for the development of strategic thinking is conducive to the establishment of export-oriented industries. With the adviser to the prime minister, the Ministry of industry and the Ministry of foreign affairs of the talks, Ethiopia executives have said the textile and apparel industry is one of the most important industries in Ethiopia industrialization, hoping to attract investment China excellent large textile and garment enterprises of Ethiopia, Ethiopia and the government will be in Jiangsu, Zhejiang, Guangdong, Fujian and Shandong five China important textile provinces key investment areas. Ethiopia is currently studying Chinese vigorously develop industrial park, and in the export-oriented enterprises to provide a variety of land, tax (corporate income tax, consumption tax, property tax, business tax, etc.) to import machinery and materials duty-free, &ldquo one-stop service; ” and a number of preferential policies and incentives. Especially the Ethiopian government in cooperation with the United States PVH company, Hawasa in the construction of Textile Industrial Park will be in early December this year step completed, PVH will transfer part of the purchase order to ethiopia. Members of the delegation are very interested in Hawasa's Industrial Park project.
3 Ethiopia rich labor resources, high quality and low cost. Ethiopia currently has a population of more than ninety million people, and the population structure is very young. The Ethiopian government attaches great importance to basic and higher education, so the quality of labor is higher than many other African countries. According to the Turkey investment company Ayka Addis introduction, the current monthly salary of ordinary garment workers 900 Bill, equivalent to less than 300 yuan, labor costs than China and Southeast Asian countries have obvious advantages.
4 Ethiopia water resources, the price is very low. Ethiopia is the one and only Africa hydroelectric energy development advantages, in the construction of the dam revival of the annual generating capacity will reach 6 million kilowatts, the annual power generation will soon reach 8 million kilowatts. Low cost hydropower bring huge cost advantage to the development of industry, according to the current understanding of Ethiopia's price can be as low as 3 cents, which has a great attraction to the tremendous power of cotton consumption.
5 Ethiopia cotton growing potential, with the development of the possibility of clothing from cotton to the textile industry chain. Ethiopia the lint yield only about 70 thousand tons a year, but the national cotton land area of 3 million hectares, the current utilization rate of less than 10%, great potential. If the Ethiopian cotton plant, with a production of cotton industry into a virtuous circle, its resources and cost advantages can be fully played. In addition, Ethiopia's hair, hemp raw material resources are also very rich.
One of the 6 Ethiopia as the least developed countries, preferential trade policy on exports to the US and Europe enjoy zero tariff quota zero. This year the United States AGOA act has a great chance to extend more than 10 years, and the EU's EBA access will not be canceled in the short term. At the same time, because of Ethiopia is “ the common market for Eastern and southern Africa ” members of investment in Ethiopia commodities but also in 23 African countries preferential tariff export a total population of 300 million.
SevenEthiopia. Infrastructure is improved, the operation is good China EGYPTAIR route. The members of the delegation are very concerned about the Ethiopian import and export infrastructure issues. Ethiopia has no port, goods need to import through Djibouti port. It is understood that the railway from the capital to Djibouti will be officially opened at the end of this year, greatly improving the efficiency of cargo transport. At the same time, the Ethiopian government highly stressed Egypt leading position in Africa and Shanghai, Beijing city and China daily non-stop flights of advantage.
In addition, the Ethiopian National Development Bank also provides less than 70% of the investment and financing support for the textile and garment industry, preferential interest rates as low as 8.5%. In the case of inflation and currency devaluation, local loans are very suitable.
Two practical problems in Ethiopia, textile and garment industry's development and challenges
1 industry is not supporting issues outstanding. Textile and garment industry is a highly connected industrial chain, the operation of the upstream and downstream industries supporting the production of high efficiency, high quality of the project is very critical. The current needs in Ethiopia garment enterprises basic materials need to be imported, which will cause the manufacturing cycle is longer, can not meet the requirements of rapid response to strict orders. There is the same problem for Ethiopia domestic yarn fabrics enterprises, the quantity and quality are not guaranteed.
2 high logistics costs. According to the delegation of understanding, the current domestic highway, Ethiopia railway transportation is not market-oriented reform of state-owned enterprises, inefficient and expensive. According to Ayka, from its factory to the port of Djibouti, a container transport costs more than $3000. The high cost of logistics is not expected to be solved in the short term.
ThreeImproving worker productivity is a long-term challenge. According to that in the East Industrial Park and Turkey Ayka research group, compared with the mainstream of world manufacturing countries, Ethiopia worker productivity is still at a low level. As one of the best local textile companies, Ayka investment in first-class textile equipment and enhance the output of space.
It is worth mentioning that the visit also learned Chinese investment in Ethiopia enterprises also have to invest due to lack of understanding of law and policy causes the operation difficult situation. It is also suggested that in Ethiopia investment enterprises should fully grasp the local laws in due diligence, do not sign preferential terms beyond the legal provisions.