By Devika Jyothi
Ethiopia is fast emerging as the sourcing hub for the global textile and garment industry. Major global brands such as PVH, H&M, Raymond, Zara, Vanity Fair and several others have set up their facilities in Ethiopia and are enjoying the operational and financial benefits offered by the country.
With the objective of promoting Indian investment in the textile and apparel sector in Ethiopia, a high level delegation led by His Excellency Mr. Bogale Feleke, State Minister, Ministry of Industry, Government of Ethiopia, is visiting major textile clusters in India to present investment opportunities to potential investors and entrepreneurs. The delegation includes top level representatives from government institutions, industry associations as well as Ethiopian textile and apparel companies.
In facilitating the meetings to promote business collaborations between Indian and Ethiopian companies, Supporting Indian Trade and Investment for Africa (SITA) is organising seminars and workshops from 17-21 July 2017. The events will be held in the cities of New Delhi and Ahmedabad in association with the Confederation of Indian Industry (CII), as well as Dindigul in association with Tamil Nadu Spinning Mills Association, and Coimbatore, in association with South India Mills Association.
Launching the programme at the CII Headquarters in New Delhi on 17 July, Mr. Pranav Kumar, Head -International Trade Policy, highlighted the major incentives available for Indian manufactures and entrepreneurs in Ethiopia. ‘At a time when the MFN (most favoured nation) tariffs work to their disadvantage, Indian companies may well benefit from the duty free access to the huge European and United States’ markets by investing in Ethiopia,’ he said.
Mr. Sileshi Lemma, Director-General, Ethiopian Textile Industry Development Institute, presented an overview of the industry and business climate in Ethiopia, elaborating on the incentives as well as the important initiatives undertaken by the government to support the development of the textile and apparel sector.
In his key note address, Hon. Minister Feleke expressed his appreciation for SITA and CII’s efforts in supporting the long-term development of the textile industry in Ethiopia. Presenting the potential investment opportunities in the sector, he commented: ‘We strongly believe that the textile industry would play a major role in the industry development strategy of the nation.’
‘Ethiopia’s textile and clothing industry is undergoing major development, aided by the presence of low labour cost and skilled and highly-motivated workforce. This surge has been helped by the country’s impressive economic growth over the past years. Ethiopia’s enormous export potential is made possible by the wide availability of raw cotton and other natural fibres and Ethiopia’s access to domestic, regional and international markets,’ Minister Feleke said.
The seminar continued with an overview presentation, ‘Ethiopia – Aspiring to become the leading manufacturing hub in Africa,’ on the business climate and investment opportunities for potential Indian investors. An interactive session followed with the Ethiopian delegation responding to the various queries from the Indian counterparts, ranging from labour, skill development and capacity building initiatives to financials and the regulatory regime as well as sustainability.
‘The duty free access to the European Union and United States’ markets, and the availability of a motivated and skilled workforce make Ethiopia an attractive destination, particularly given the fact that we face a labour shortage in the sector in India,’ said Mr. Suresh P of Zodiac Clothing Co. Ltd. ‘And, the Ethiopian government machinery is very much on cue and upfront in addressing the issues affecting the sector.’
‘While the opportunity is a definite positive, the commercials will have to be looked at,’ Mr. Suresh said, adding: ‘If things work out, we would mainly be interested in setting up fully integrated manufacturing activity, and I see a 5-year down-the-line prospect for Ethiopia becoming a manufacturing hub for garments. We will have challenges to get specialized skill sets – that however can be mitigated with help from the government and the transfer of skills from our existing set up.’
‘The financials are all positive. However, while trying it out in Ethiopia may be comparatively easy for big businesses and brands, for smaller family run businesses like us, it is a major decision. We are keenly observing the possibilities,’ said Mr. Karan Jain, Director, Pooja International.
‘Ethiopia is expected to become the hub of textile manufacturing within the next 4-5 years. The Government has the vision and commitment – we are looking at over 150 potential investors and the creation of nearly 174,000 jobs in the sector by 2025,’ Mr. Lemma said. ‘While the world’s leading brands like PVH, H&M, Zara, Vanity Fair and several others have established their manufacturing facilities in Ethiopia, the opportunities are still largely untapped. There are immense opportunities across the value chain for Indian companies to explore,’ he observed.
The first leg of the programme, the Delhi cluster, concluded with a visit to Orient Craft Limited (OCL), one of India’s leading garment manufacturers and exporters. The delegation explained the possibilities and opportunities available for the company for a profitable investment in Ethiopia. ‘We will definitely look at the possibilities,’ said Mr. Sudhir Dhingra, Chairman and Managing Director of OCL.
As Mr. Govind Venuprasad, SITA Coordinator assures, ‘Ethiopia is in the forefront of the narrative of African transformation. And, there is only one way that an Indian company can go in Ethiopia. That is up. There is no other way.’