Two billion birr allocated to ease cotton, yarn shortage

Ethiopian Industrial Input Development Enterprise (EIIDE) says it has allocated over two billion birr, to provide more support for the textile and garment sector to alleviate input shortages of yarn and cotton.
Asfawesen Alene, CEO, told Capital that EIIDE, a public enterprise formed to supply inputs for the manufacturing industry, plans to provide hard to find items for the textile industry.
“Small and mid-sized industries asked for yarn, we attempted to buy the yarn in bulk but we had to stop after listening to feedback from potential users,” Asfawesen said.
“The small and medium industries have told us that the proposed price for the yarn is high and wasn’t sustainable for business so we so we suspended the bidding process,” he added.
“We know that there is a scarcity of yarn supply so we are negotiating with local textile factories that produce yarn to obtain it at a reasonable price,” he explained.
He mentioned Ayka and Dire Dawa textile factories as some of the companies they approached.
Yarn scarcity has been a concern for the textile and garment industry over the past two years.
“We are providing cotton as one option since there are other suppliers and producers in the country,” “When shortages occurred we help them so they can continue their production without an input scarcity,” the CEO added.
He said that his enterprise has a huge amount of cotton stock that can meet the needs of the market at any time.
In the current budget year EIIDE plans to provide input support worth up to two billion birr.
The regulation allowed EIIDE to produce inputs with its own supply. In the coming fiscal year it will continue providing input by procurement from local and foreign sources.
For the year EIIDE plans to supply input worth 400 million birr for the textile sector and chemicals worth 600 million birr.
The enterprise plans to allocate up to 500 million birr for the agro processing sector and for salt about 200 million birr, which is an input for the textile and leather industries.
“We have adequate capital for the targeted procurements,” Asfawesen said.
The enterprise is supporting manufacturing industries from huge to small scale. In the past couple of years it has spent over one billion birr to supply inputs. Initially it commenced operation by supplying inputs for the textile and garment sector and then expanded to the leather sector.
“In the textile sector we provided cotton and for the leather sector EIIDE supplied raw hides and skin and semi processed products for tanneries,” the CEO said. EIIDE has been also providing inputs for the agro processing sector.
It also plans to commence providing inputs that include chemicals and metals.
The enterprise was formed under the regulation of 328/2014 by the Council of Ministers by replacing Merchandise wholesale and Import Trade Enterprise (MEWIT) to tackle the input shortage and feed input for manufacturing industry, which was under financial constraint because they had to manage a large amount of stock.
It is supplying industrial inputs by importing and producing locally to stabilize the market, while currently it is focusing supply inputs both from abroad and locally.
Bahir Dar Textile Factory and EIIDE have signed a deal that will allow the company managed under Tiret Corporation to sell its products via branches of the public enterprise.
“They are our clients in two ways since they received our inputs and are providing yarn for other textile sector manufacturers,” the CEO said at the signing ceremony.
The company has a capacity to produce up to 10,000 pairs of bed sheets per day. Some are exported and the rest are distributed via local wholesalers locally. Since Tiret took over the management the production has been growing leading the company to partner with EIIDE to distribute the bed sheets across the country, according to Abebe Baye, head of Bahir Dar Textile.
Abebe told Capital that his company plans to supply over 380 million birr worth or around one million bed sheet per annum at the EIIDE shops.
Tiret has bought two textile factories from Ministry of Public Enterprises in the past fiscal year.
Tiret, the endowment conglomerate, has offered 450 million birr and 315 million birr in the privatization process for the acquisition of Kombolcha and Bahir Dar textile factories, respectively.
EIIDE has similar deal with companies to sell products at its over 80 shops. For instance Horizon Addis Trye is selling its product via EIIDE shops.