Written by Mina Yirga - Horizon Ethiopia Staff Writer
Sunday, 21 September 2008
Coffee retailing giant Starbucks is interested in Ethiopia for more than just the specialty coffee varieties that have at times inflamed tensions and wound up giving the country a huge PR boost. After eight months of preparation to measure up to the Seattle giant’s social responsibility standards, Almeda Textile Plc will be shipping 20,000 pieces of black master coffee barista aprons for Starbucks.
“It was a difficult process to meet demanding standards, but our perseverance has paid off, says Mulugeta Gebreher, senior merchandiser of exports for Almeda Plc.
Aided by increasing demand and tax incentives such as the AGOA program, foreign customers are beginning to see Africa as a potential supplier of textile products. From 2004 to 2007 alone the category of imports to the US under the preferential trade agreement doubled from 23 to more than 47 million dollars. Many major customers are looking past the traditional sector powerhouses like China, India and Pakistan, to Africa in a bid to tap into unexplored markets.
Ethiopia too is one of the beneficiaries of this shift with over 4.5 million in AGOA textile exports to the US in 2007. Amongst other local textile factories, Almeda has become a leader poised to position itself at the forefront of this surge.
This vertically integrated mill was established in 1992, with a total investment capital of over 700 million Birr. The factory has become a magnificent landmark in the middle of a beautiful valley surrounded by mountains located seven kilometers from the center of Adwa town on the main road to the historical city of Axum (1,006kms north of Addis). With 3,000 employees, Almeda is the largest employer drawing from the town’s 80,000 residents.
Having selected the “Rolls Royce” of textile technology machinery in both mills, the design capacity includes the flexibility to choose a variety of textiles, yarns, fabrics and blends of synthetic and natural materials. Almeda is currently providing its foreign buyers (mostly Italian companies who sourced over two million dollars worth of Ethiopian textiles last year) and local customers alike with a wide variety of products including home textiles, work wear, hospital wear, Tshirts, polo shirt, trousers and more
At the international level, competing with textile giants from China, India, Pakistan and Bangladesh has not been an easy task for Almeda but it sees promise. “The cost of production is rising in these countries due to increasing labor costs and decreasing government subsidies,” says Mulugeta. “The European and US customers are deliberately disengaging some of their businessfrom these countries especially from China to Africa even though they may have to pay a little higher price.” The Ethiopian textile industry is still in a nascent stage of development.
Looking at the textile industry as a whole, the export performance is much below the desired expectations and the available potential as the country garnered only one-third of the desired 29 million dollars in the first nine months of the current fiscal year. Scarcity of vendor based industries, lack of technology and manpower as well as distance to port have been cited by industry insiders as explanations for the underachievement. “Despite the limitations, the textile industry can grow at a much faster pace since the Ethiopian government is vigorously pursuing the development of infrastructure and giving incentives like export guarantee schemes and tax exemptions in addition to liberalization of textile trade, AGOA and EBA which creates a lucrative business opportunity for foreign customers,” says Mulugeta.
