International companies eye Ethiopia’s textiles


Large international corporations are becoming more interested in investing in Ethiopia as the likes of H&M and TESCO have started to establish their presence in the country.
“TESCO opened its office in Ethiopia very recently and when companies like that start getting involved, others will follow. That is what we are seeing now,” said Melaku Taye, Ministry of Industry PR office head.
Currently TESCO is reportedly buying products from five textile companies and it plans to buy GBP 15 million worth of merchandize with in the coming two years.
TESCO is British multinational grocery and general merchandise retailer headquartered in Cheshunt, Hertfordshire, England. It is the second-largest retailer in the world next to Wal-Mart when measured by profits.
“These big companies did not just decide to open offices and get involved in the industry; it took them over three years of study to determine if the market was viable and if it would be profitable for them,” Melaku said.
During a meeting regarding the textile and leather sector, held at the United Nations Economic Commission for Africa, speakers reported that currently there are 60 garment factories and 15 textile mills in Ethiopia.
Presenters at the conference also pointed out that in order for the government to achieve it’s ambitious plan to get USD one billion from textile and half a billion dollars from the leather sector, it would require a collaborative effort with all stakeholders including the public, along with private and development partners.
According to Tadesse Haile, State Minister of Industry, there are some challenges to the industry sector including the lack of raw materials, high taxations on machineries and affordable human power, which hampers the sector’s growth.
The meeting was attended by the U.K Ambassador Greg Dory, DFID representative Melanie Robinson, TESCO Ethical Trading Director Giles Bolton and TESCO representative in Africa Lumat Ahmed along with representatives of companies involved in the textile and leather sector.
Much attention has been given to manufacturing lately because as experts at the meeting stated the exports from the sector bring in foreign currency and create many opportunities such as bringing in technological transfer and building local managerial skills.
The need for investment not to only focus in and around Addis Ababa was also talked about  during the discussions. In order to have balanced growth in the country, investment should also go towards various regions which are equally suitable.