The Ethiopian Government signed an agreement on December 12th with the BEZEMA Dyes and Chemicals Private Limited Company,
a sister company of the Swiss firm CHT BEZEMA AG, which has been supplying chemicals and dyes for the last 15 years to Ethiopian industries, for a Bonded Warehouse Chemicals and Dyes supply scheme.
BEZEMA is also expected to participate in capacity building activities for the Textile Industry Development Institute (TIDI) and trainings for the chemical processing personnel of Textile Industries.
The agreement, the first of its kind, is with a private company and related to the implementation of Ethiopian government’s scheme through the TIDI for a bonded input supply warehouse implementation.
A bonded warehouse is a building or other secure area in which goods for which duties are normally paid , may be stored, stage-managed, or undergoes manufacturing operations without payment of duty. It may be managed by the state or by private enterprise and is normally used to promote export oriented industries.
Tadesse Haile State Minister of Industry (MoI) said Ethiopia is striving to realize a developed and prosperous nation through its economic policy and industrial development strategy, which gives a special consideration to the manufacturing industry.
Particularly mentioned priority industries were in the textile, leather, AGRO-PROCESSING, chemical and pharmaceutical industries which the government believes have competitive advantage to Ethiopia.
Tadesse also said that this occasion is just part of a pattern where it’s been providing various technical assistances and capacity building through industry specific institutions, in addition to legal frameworks and policy initiatives that have been put in place to support the private sector’s efforts to be at a par with its global competitors.
“We’ve prepared the export promotion Incentive Schemes law, that was recently been revised to attract more investment both domestic and Foreign Direct Investment (FDI)” said Tadesse.
MoI also stated that in order to mitigate the problem of exporting companies with regards to the supply of inputs and accessories, the investment regulation has been relaxed and as a result supply of strategic inputs for the textile and leather industries have been opened for reliable foreign manufacturers through the bonded warehouse system.
Tadesse further said the implementation of a Bonded Input Supply Warehouse Scheme will play a significant role by introducing efficiency and effectiveness in the supply chain of strategic industries through timely delivery and helps avoid unnecessary stock in the industries.
Customs laws and procedures have also been revised to provide efficient and speedy service to the manufacturing industry and those engaged in supporting these industries including bonded supply warehouse operators.
Fasil Tadesse President of the Ethiopian Textile and Garment Manufacturing Association (ETGAMA) said this is an opportunity the textile sector must use for mutual benefit as the sectos’ needs for inputs is very great at this moment.
The Ethiopian Government under its Growth and Transformation Plan (GTP) which by its end in 2015 is expected to have sales value of USD 2.5 billion from textile and apparel sector.
Seyoum Tekleab Garment Directorate director at TIDI stated that if the government is to realize the GTP target there is a great need for reliable and adequate supply of inputs for the sector such as accessories, chemicals and dyestuffs at reasonable price become crucial factor that affect competitiveness of the sector.
He further said the demand from textile industries for chemicals and dyestuffs has been growing for the past several years on average of up to 20 percent annually, and as such this agreement takes significance in this matter.
Bonded warehouses provide specialized storage services such as deep freeze or bulk liquid storage, commodity processing, and coordination with transportation, and are an integral part of the global supply chain.