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Ethiopia: Textile Expo Concludes With Big Deals, Contracts

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The three day event dubbed “Origin Africa hosting the Africa Sourcing and Fashion Week 2015”, a trade expo that focuses on textile, apparel, home décor and technology, was concluded yesterday with some major sourcing deals and contracts signed between local firms and foreign companies.

According to Fassil Tadesse, president of the Ethiopian Textile Industries Association and board member of the African Cotton and Textile Industries Federation (ACTIF), the event, which brought together as many as 180 global exhibitors from 25 countries and various buyers and investors, was a success from the point of view of engagements between buyers and textile manufacturers in Ethiopia.

He also noted that a number of companies which have come to Ethiopia with the explicit plan to strike sourcing deals have been busy signing contracts and visiting factories for sourcing. According to Aurelia Calabro-Bellamoli, senior industrial development officer at the United Nations Industrial Development Organization (UNIDO), Small and Micro Enterprises (SMEs) and local designers were also part of the textile expo showcasing their work to the visitors.

Patricia Haslach, US Ambassador to Ethiopia, on her part said that Ethiopia has the potential to attract major brands interested in sourcing textiles and apparels. She referred to the 2014 survey report that the US based McKinsey has conducted. The survey suggested that Ethiopia is shortlisted to become one of the top destinations for the textile and apparel sourcing in Africa. According to the ambassador, currently, H&M, Primark, Tesco and the like are sourcing from Ethiopia.

The survey result posted on McKinsey’s website puts Ethiopia atop 11 potential countries in East Africa based on a survey that was done on 40 top chief purchasing officers. The group generally responded favorably to a question whether they expect to either start or increase sourcing from East African countries between 2014 and 2020. In the case of Ethiopia, out of 40 respondents 28 have expressed expectations to start sourcing. Eight more respondents have said they will increase the value of current purchases.

However, the country’s share of the global apparel exports trade is a meager 0.01 percent. Nonetheless, propelled by the cheapest wage rates in the sector the prospect for growth is immense. According to McKinsey, the monthly wages are believed to be around 60 US dollars. But, there are quite a number of industry players crying for betterments in areas of logistics and an alternative to the Port of Djibouti. “Inefficient port services, unpredictable customs procedures, unreliable power supplies, shortage of trained staff and labor turnover” are some of the challenges investors wish to see easing.

Despite all the odds, many are convinced that Ethiopia is a frontier market for the future of the textile and apparel business. During the trade expo, sophisticated machineries for sewing, cutting, packaging, home décor have been exhibited. Japan, France, Italy, Germany, Turkey and the like have brought modern machineries, which according to some might threaten the existence of traditional weavers, well-known for their handmade national fabrics. The machines have the ability to produce patterns in a fraction of minutes which could take local weavers days.

Despite such fears, the Origin Africa trade expo has staged the country up front in the textile business, especially in terms of prospects, together with Africa countries such as Kenya, Mauritius, Lesotho, Madagascar, Uganda, Tanzania, Botswana, Egypt, South Africa and Swaziland, all coming behind to Ethiopia. According to Sileshi Lemma, director general of Textile Industries Development Institute (TIDI) by the end of 2020, the textile sector is set to reach a value of 4.5 billion dollars with annual export revenue targets of raring USD one billion.