Capital Ethiopia Newspaper

Textile and leather exports below targets despite impressive gains

Textile, leather and leather product exports in the first five months of 2011/2012 were below the government’s set target. Despite a massive increase in revenue they achieved 67.3 and 84.7 percent respectively. 
Exports from the products earned the country about USD 39 million and USD 62.4 million respectively, an increase of 137 percent and 91 percent from the same time last year.
November brought a huge improvement, however, from the overall five months performance report with textile and leather exports reaching a little more than 80 percent and 107 percent of the targets respectively.
The performance in November was helped mainly by these two sectors as well as to a lesser extent by agro processing products and pharmaceuticals and chemicals exports which amounted to USD 5.7 million and just under USD 1 million respectively.
According to the Ministry of Industry, primarily the economic crisis in Europe, a major export destination, is the cause for some major companies to cancel their orders or delay their order dates.
Major Turkish textile factory Ayka Addis, Kombolcha, and the MIDROC owned MAA Garment were some of the textile factories affected.
In November many factories reported making items for local markets instead of exports. Cotton and yarn prices decreased as well, which prompted some textile factories to hoard the items since they had purchased them at a much higher price.
Even though leather exports were below target, MoT said 14 tanneries and leather factories had performances above their goals in the crust leather stage Ethio-Leather Industries and Dire Industry were above the export target during the five month period in finished leather exports.
MoT further said it expects substantial increases in revenues for the leather sector with a ban on export of leather crust leading to a transition to focusing on finished leather products.
The country earned 124 million birr from exporting textiles, leather, agro-processing products, pharmaceuticals and chemicals, an increase by 95.5 percent from the same time last year.
Although it only met 77 percent of the government’s set target of earning 161.1 million birr during this period.
The Industry Ministry has planned in the 2010/11 budget year to get USD 471.2 million in revenue from these four sectors.