SITA at African Sourcing Fashion Week 2017: Indian textile associations gauge investment opportunities in Ethiopia

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By Devika Jyothi

Enabling select Indian cotton textile stakeholders to gain a first-hand understanding of the African textile and apparel sector, and in particular the investment opportunities in Ethiopia, SITA facilitated the participation of representatives of the Confederation of Indian Textile Industry (CITI), and the Southern India Mills’ Association (SIMA) – Cotton Research and Development Association (CRDA) at the Africa Sourcing and Fashion Week (ASFW) – 2017.

A major exhibition and conference for the cotton, textile, apparel, home décor and technology industry, the annual ASFW brings together textile and apparel manufacturers, key buyers, vendors, trade associations and government institutions involved in apparel and fashion accessories from the region, and internationally. ASFW 2017, held from 3-6 October in Addis Ababa, hosted over 240 international exhibitors from over 27 countries, and featured high level conference sessions, B2B meetings and a Designer Showcase.  ASFW 2017 was organised in partnership with Messe Frankfurt Exhibition GmbH, Ethiopia Textile Development Institute (ETIDI) and Ethiopia Textile and Garment Manufacturers Association (ETGAMA).

As part of the SITA initiative, Mr B. Lakshminarayana, Chairman, SIMA CRDA and Dr. S. Sunanda, Secretary General, CITI attended the ASFW 2017 exhibition and conference. The Indian delegation’s visit to Ethiopia is a follow-up to the visit of a high-level Ethiopian delegation, led by the State Minister of Industry, to India in July 2017 to present Ethiopian investment promotion opportunities to Indian cotton and textile manufacturers and entrepreneurs. Besides the exposure, the visit also aimed to strengthen institutional linkages between CITI, SIMA CRDA and Ethiopian textile and garment associations.

L to R: Mr B Lakshmi Narayana, Chairman, SIMA-CDRA; Dr S Sunanda, Secretary General, CITI; Ms C Averbeck, SITA; Mr Fasil Tadesse, President, TGMA; Mr Fitsum Arega, Director General, EIC

Organised by the East Africa Trade and Investment Hub, the ASFW exhibition and the panel sessions allowed the Indian delegation to engage with Ethiopian trade associations, government institutions and officials as well as cotton textile manufacturers. Dr. Sunanda and ITC SITA Coordinator Mr. Govind Venuprasad participated in a panel discussion on “Investing in East Africa’s Textile and Garment Industry”. While Mr. Venuprasad highlighted the opportunities, the cost benefits and global market access available for Indian investors in Ethiopia, and East Africa, Dr. Sunanda stressed the need for skilling the local workforce to ensure competitiveness.

‘While the availability of less expensive labour is definitely a plus, skill development and training is critical in garment manufacturing, particularly in the SME sector,’ Dr. Sunanda remarked. ‘In that regard, the Ethiopian industry can learn from the Indian growth story, and adopt the best practices in technology and training from Indian counterparts,’ she observed.

At the ASFW expo, innovative technologies developed by the Indian cotton research institution, CRDA,  that are particularly useful to smallholder cotton and yarn producers, such as the SIMA Kapas cotton plucker, were introduced to Ethiopian producers. SIMA CRDA also presented a Kapas cotton plucker to the Ethiopian Cotton Producers Exporters and Ginners Association (ECPGEA).

According to Mr. Lakshminarayana, the SIMA hand-held machine would enable a farmer to pick 60 to 80kg of kapas (raw cotton) a day compared to manual picking of 12 to 20 kg/day.  Using this plucker, the farmer would be able to bring down the labour cost by 20 percent, and pluck only mature bolls without trash and contamination.

During the visit, the delegation also had the opportunity to attend the India-Ethiopia Business Dialogue – a separate event organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Indian Business Forum in Ethiopia, to enhance cooperation in trade and investment between India and Ethiopia. President Ram Nath Kovind of India, and President Mulatu Teshome of the Federal Democratic Republic of Ethiopia were present at the event, which hosted a 30-member delegation comprising of business leaders from different industries. At the event, the Ministry of Industry and Ethiopian Investment Commission presented investment opportunities as well as the state-run agro-industrial parks in Ethiopia.

Further, the Indian delegation visited Bole Lemi Industrial Park and Hawassa Industrial Park. The state-run industrial parks provide developed land and pre-built sheds equipped with all utilities and infrastructure for potential investors. The first industrial park, Bole Lemi Phase 1 houses several foreign-owned garment manufacturers, focused on exports, including Ashton Apparels, India; C&H Garments, China; Arvind Lifestyle Apparel, India; and Shints ETP Garments, South Korea to name a few.

The team was impressed by the visit to Hawassa Industrial Park, a US$250 million park covering 300 hectares located at Hawassa, 275km away from Addis Ababa. Exclusively dedicated to the textile and garment manufacturing industries, Hawassa runs a Zero Liquid Discharge (ZLD) facility that enables 90 percent of sewerage disposal water to be recycled, fulfilling international environmental standards. The Hawassa eco-friendly industrial park, which has an one-stop-shop for all government services, has attracted several  leading global apparel and textile companies including PVH, USA; Wuxi Jinmao and IndoChine Apparel, China; Raymond and Arvind, India; PTU, Indonesia; TAL and EPC, China and Hong Kong, among others.

The Indian textile associations’ visit will serve as a multiplier, mobilising member companies to explore investment opportunities in Ethiopia and the region. As a next step, an exploratory visit is now being scheduled for a larger delegation of Indian companies and investors in the coming months.

‘The Ethiopian textile and garment industry, with its competitive cost structure and global market access, has great potential to become Africa’s cotton textile, and apparel hub,’ commented Mr. Venuprasad. ‘Indian cotton textile and garment manufacturers have much to offer to facilitate this growth, as well as to gain from it,’ he added.

‘In addition to the provision of plug and play industrial parks, the Ethiopian Government is today very much committed to supporting investors set up in Ethiopia, including with regard to visas and customs. I would urge Indian investors to take advantage of the opportunities on offer,’ Mr. Venuprasad said.

Hawassa Industrial Park – One-stop-shop

Voices of SITA
Voices of SITA
This blog provides a window into the SITA project. Through stories from India, Ethiopia, Kenya, Rwanda, Uganda and the United Republic of Tanzania, this blog showcases the project’s progress and impact.