Six industrial parks in Ethiopia expected to generate USD 30 billion through garment exports by 2025

Adama Industrial Park was launched in October 2018
by Textile Quotient News Desk
1 Feb 2019

China’s Antex Group commissions it plant Ethiopia’s Adama Industrial Park

Ethiopia has experienced the largest increase in the African Growth and Opportunity Act (AGOA) exports to US from East Africa countries with a sharp 62 per cent year-on-year. According to the East Africa Hub of the US Agency for International Development (USAID), Ethiopia may quickly become the second or third largest exporter under AGOA in East Africa, if the growth momentum is sustained.

The country has managed to have a healthy policy frame work incorporating it in the out stretched goal of Growth and Transformation Plan (GTP) giving due emphasis to private investors. It reinforces investors with benefits like attractive tax holly days, duty-free packages, investment packages, and developing infrastructure along with cheap labour costs. This is part of a drive to turn Ethiopia into a manufacturing hub in Africa. Foreign investment in the textile industry has risen from USD $166.5 million in 2013/14 to USD 36.8 billion in 2016/17, as per the Ethiopian Investment Commission.

Six textile and garment oriented industrial parks in Ethiopia are expected to generate USD 30 billion worth of exports by the year 2025. Ethiopia continues its rigorous quest of building industrial parks, which is part of the initiative to make Ethiopia a manufacturing hub of Africa by 2025.

Countries like China, India, Turkey and even Bangladesh are alternatively creating their manufacturing base in Ethiopia primarily due to increasing labour costs in their respective countries or to get attractive incentives as FDI . According to data from the Ethiopian Investment Commission (EIC), 124 foreign investors have expressed interest in the Ethiopian textile sector, out of which 71 are from China, more than 30 investor inquiries from India. Ayka Addis, the Ethiopian subsidiary of the Turkish textile giant Ayka Textile, inaugurated in 2010 its factory at a cost of USD140 million at Alemgena, 20km west of Addis Ababa, creating jobs for more than 10,000 people. Ayka Addis has the capacity to export textile products worth US$100 million a year per annum. Investment opportunity in Ethiopia is also taken by Bangladeshi companies; Experience Group entered Ethiopia about five years back and DBL Group has set huge investment plans in Ethiopia.

 Majority of the clothing companies looking at putting up production units in Ethiopia are testing the waters with small volumes

 Antex Group, a Chinese textile manufacturing company, has officially started exporting its products, making it the first company to export from Adama Industrial Park launched in October 2018. According to Antex Chairman, Qian Anhua, from first export to Europe, a container of swimwear, the company is expected to generate USD 100,000. The company has created jobs for 1,500 individuals and the number is expected to reach 10,000 when it goes fully operational.

Ethiopian government is working to overhaul the national logistics sector

As part of the ongoing economic reform program, the Ethiopian government is working to overhaul the national logistics sector. It is planning to cut the import-export transit time by half by 2020. The government feels that high cost of logistics is undermining the country’s overall trade competitiveness. The limited participation of the private sector in the logistics sector is one of the shortfalls in the sector along with lack of modern systems and inefficient customs clearance procedures.

Ethiopia is about to open the final stretch of a 700 km (450-mile) electric railway to Djibouti’s coast

The Ministry of Revenues is planning to launch a customs single windows service. The administration of Prime Minister Abiy Ahmed (PhD), whose focus is on economic liberalization, expressed commitment to enhance the participation of the private sector in the entire logistics supply chain. There is also an initiative taken by the administration to diversify the country’s port access. Reduce the number of documents required for import and export by half, reduce the average duel time of imported goods to two days in dry ports and increase general cargo carried by multi-modal transport system coverage to 90 percent.

H&M established its office in Addis Ababa in 2012, and has been buying clothing from a number of Ethiopian manufacturers since then. Besides H&M, Gap, Tesco Tchibo, Otto Kessler, PVH –brands- Calvin Klein and Tommy Hilfiger; Levi’s, Zara, Giorgio Armani, Hugo Boss, Decathlon are sourcing garments from Ethiopia.  Over 150 companies from China and India have started sourcing production from Ethiopia.

Ethiopia News Region

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