Event on – 26-Aug-2015
Ethiopia textile and apparel investments accelerate By Jozef De Coster Several international groups are expanding their production capabilities in Ethiopia From fast-growing textile hub Mekele to expansion plans by several international groups to expand their production capabilities in Ethiopia, the scale of current and planned investments in the country appears to be accelerating. Jozef De Coster reports from last week’s ‘Origin Africa’ event in Addis Ababa. The city of Mekele in the north of Ethiopia is aiming to become the country’s textile capital. Maa Garment & Textile Factory, which has 1,488 workers and is a supplier to companies like H&M, Asos, George at Asda, Calzedonia, Primark and Tesco, plans to increase its knit capacity from 9.6 tons to 20 tons per day and to build a new plant for woven items. DBL Group from Bangladesh, the vertically integrated knit garments manufacturer and exporter with an annual turnover of more than US$250m, is investing some US$100m in a garment, knitting and dyeing factory in Mekele.
According to Murtoza Mamum Al-Azim of Atelier Sourcing, a member of DBL Group, the factory will be operational in the second half of 2016. Initial employment is estimated at 5,000-6,000 workers, and the group will make additional investments in the coming two years. Among DBL’s customers are H&M, KiK, Lidl, Esprit, Puma, George and Walmart. The Italian hosiery and beachwear producer Calzedonia announced last year it wants to establish a factory with 2,000-3,000 workers in Mekele. But the most ambitious investment project in the city, both in quantitative and qualitative terms, is that of the Indian entrepreneur Siddharth Sinha. His Velocity banner (the manufacturing arm of the Vogue group of companies) will keep its five factories in Egypt, with around 4,000 employees, but plans to expand aggressively in Ethiopia.
The Ethiopian operations are due to start in January 2016 with a new garment factory that will employ around 3,000 workers and mainly manufacture knits and denim articles. Velocity plans to ultimately employ some 10,000 people in Ethiopia Sinha believes that investing in the most modern ‘green’ machinery and production technics and in ‘soft skills’ will pay off. Employees are educated to understand the value of product quality and the practice of kaizen or continuous improvement. Velocity customers include brands like Levi’s, Vanity Fair, Target, Zara and H&M. Also in the North of Ethiopia, Almeda Textile (brand name Altex), located near the airport of Axum, has big expansion plans. The company currently has 5,500 workers, and according to export market chief Tedros Berhe, plans to double its workforce to 11,000 by 2017 and to triple it by 2018.