Big textile plans for 2015


The government of Ethiopia unveiled plans for the textile industry to have 46 additional projects by the end of the Growth and Transformation Plan in 2015, contributing to the sector’s projected revenue of USD 2.5 billion by 2015.
Although it projects that in the current Ethiopian fiscal year (2011/12) no major textile projects are going to be operational, it foresees six projects to begin operating in the next Ethiopian fiscal year, followed by 18 in the following fiscal year, eventually reaching 22 by the end of the GTP period.
Out of the 46 textile projects that are expected to become operational by the end of the GTP period two are expected to be cotton grinning industries, four are spinning industries, seven weaving and one each for knitting and finished-woven textile industries.
It also sees two projects that are finished-knitted factories, three that are woven-garment industries and two knitted-garment industries.
In addition to the new projects the plan foresees increasing revenue by capacity building and utilization of existing factories as well as attracting new investments.
The expected projects coincide with the estimate that the textile industry can increase the number of spindles from 236,852 to one million, the number of looms from 1,336 to 5,000 and the number of stitching machines both for weaving and knitting from the current 9,000 to 20,000.
The government believes that it can increase its revenue and the number of projects as per the GTP’s goals because it says the country has a large pool of 80 million plus population growing at 2.5 percent each year, which is trainable and relatively low cost as compared to other competing countries in the sector.
According to the government the labor cost is not only smaller than more established textile producing countries like Pakistan but also less than fellow African countries like neighboring country  Kenya, the northern African country of Tunisia, and the Indian ocean island of Mauritius.
It also states that the existence of both urban and rural areas for investment on leasehold, rental basis or freely depending on where the investment is undertaken makes it more attractive.
Currently it’s estimated that only three percent of land from the total just over three million hectares set aside for cotton has been cultivated producing cotton seed of approximately 122,478 tons annually with an overall yield of 16.87 quintal per hectare. The total production of lint cotton in Ethiopia is estimated at around 42,000 tons annually.
The Ethiopian government also estimates that the projection of USD 2.5 billion in textile revenues will be helped by the bilateral and multilateral agreements it has with regional trade blocks and countries like the US with the African Growth and Opportunity Act (AGOA) and with the regional body the Common Market for Eastern and Southern Africa (COMESA).
It has also signed 16 similar bilateral agreements with countries as diverse as Russia, Turkey and the Arabian Gulf nation of Yemen which are recently investing heavily in the Ethiopian Textile industries.
If everything works out as planned by the end of the GTP textile industries will create three million more jobs. They will facilitate 11 billion birr in credit service to 2.2 million actors/enterprises. It also aims to create market opportunities for 1.4 million actors in 10 billion birr at the domestic market and for 110,000 actors in 300 million birr at the international market.