Japan helps Angola restore textile and apparel sector
The Angolan government is seeking to rebuild its textile and clothing sector
Japanese international trading house Marubeni Corp has teamed up with US based clothing and textile management consultants Werner International in rehabilitating a textiles factory in Angola to produce denim and knitwear products. The move is part of a long-term plan by the Angolan government to restore its clothing and textile sector, which was severely damaged by the country's civil war, which lasted from 1975 to 2002.
Angola wants to diversify its economy away from oil. Government figures for 2015 said oil accounted for more than 95% of export earnings and 52% of government revenues, making Angola vulnerable to the fall in global oil prices over the past 18 months.
The financial squeeze has also prompted the Angolan government to open talks with the International Monetary Fund (IMF), which it wants to help finance an economic growth programme. The IMF said it would be "supporting a comprehensive policy package to accelerate the diversification of the economy, while safeguarding macroeconomic and financial stability."
Marubeni and Werner International's work dovetails with this strategy. The Japanese company is working on a contract worth around JPY25bn (US$229m) by Angola's ministry of geology, mining and industry to get the facility in Dondo, central Angola, back into operation. Werner International is presently training the management of the start-up.
"With the eventual delivery of our equipment, the facility is expected to produce 2m T-shirts a year, 2m polo shirts and around 6m metres of denim," says Kuniyoshi Matsui, a spokesman for Marubeni, in Tokyo.
"Angola has been battered by civil war and its cotton business has been badly damaged," he adds. "The Angolan government has been seeking to revive the nation's textile industry and also to create jobs in the agriculture sector."
Marubeni was invited to take part in the project from the planning stages, he explains.
Under the project, existing buildings are being extensively renovated and modified, while the production plant will be fitted with state-of-the-art textile machinery for spinning, weaving, knitting and dyeing.
Once the factory is back in production, the project will enable Angola to reduce imports of some textile products – such as fabrics for shirts and uniforms, towels and bed sheets – and replace them with domestically manufactured goods.
Matsui said the plant may employ as many as 1,000 local people when it is operational.
The Dondo project is the third and final phase of an agreement between Marubeni and the Angolan government, with the earlier projects involving restoring textile factories in Luanda, the capital city, and Benguela, western Angola.
This latest contract has been financed by buyer's credit provided by the Japan Bank for International Cooperation (JBIC), its first project in Angola.
A note from Werner International president Constantine Raptis welcomed the commission from "the powerhouse company of Marubeni and the government of Angola to assist with an exciting new textile start-up plant producing knitwear and denim products. We are currently in Angola training the management in the start-up of the installations and securing the profitability of the plant."
The Angolan government has been proactively courting Japanese help as it seeks to rebuild a vibrant textile and clothing sector. Last September, Angola's minister of public administration, employment and social security António Pitra Neto welcomed the social and economic benefits of such assistance, when taking delivery of 14 sewing machines from the Japanese embassy in Luanda, earmarked for use in the three planned new factories.
He said the move would inspire the development of additional vocational education so the plants had a ready supply of qualified staff – they will employ 3,500 people, he predicted. The initiative was good, "not only for the diversification of the ongoing economic programme, particularly in industry, but also the national system of vocational training," he said.
Pitra Neto said the initiatives would be helped by employment law liberalisation within Angola's new General Labour Law nº 7/15, which also entered into force in September. The legislation scraps a rule insisting that employment contracts must be limited to between six months and three years. Going forward, contracts offered by any company can be up to five years in duration and for medium, small and micro-sized companies, 10 years.
The Angolan government is currently following an 'Angola 2025' long-term development strategy devised by its planning ministry. It commits the government to try and increase textile and clothing exports, especially to neighbouring southern Africa countries.
The plan says this should be achieved by creating competitive clusters of textile and clothing manufacturers, plus effective domestic production supply chains; supporting import substitution; offering benefits and incentives (especially for finance, including venture capital assistance; research, marketing and communications) to boost exports; and tariff protection.
A World Trade Organization (WTO) review of Angolan trade policy noted that in 2015, the average import tariffs for textile products in Angola were 9.5%, clothing 12% and footwear 9.4%.
With additional reporting by Julian Ryall and Brendan De Beer.
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