The creation of industrial parks, like this one at Bole Lemi, is part of the Ethiopian governments vision to transform the country into a world-leading apparel and textile hub

The creation of industrial parks, like this one at Bole Lemi, is part of the Ethiopian government's vision to transform the country into a world-leading apparel and textile hub

Chinese industrialists from Kunshan city, a major clothing manufacturing centre in southeastern Jiangsu province, are eyeing potential investments in Ethiopia's Dire Dawa Industrial Park, China's ambassador to Ethiopia has told just-style.

Tan Jian says a delegation from Kunshan city, led by its mayor Du Xiaogang, visited Ethiopia last month to probe investment and manufacturing opportunities at the hub, which is still under construction.

However, he says there are some issues to be resolved like electricity supply, water supply and land acquisition, before Kunshan investors can invest in Dire Dawa.

The industrial park is in eastern Ethiopia, around 100km from its border with Djibouti – a major port for landlocked Ethiopia – and autonomous Somaliland.

"Many Kunshan businesspeople, especially those involved in the textile and electronics sector want to invest in Ethiopia, primarily to use Ethiopia's cheaper, abundant labour force and relative ease to acquire land for investment, especially in Dire Dawa which is close to Djibouti port," the ambassador explains.

But Tan declined to confirm the US$500m investment that some Ethiopian media publications claim Kunshan executives are considering sinking into Dire Dawa. He was also cautious about confirming when initial investment from Kunshan industrialists in the project might be realised.

Speaking to just-style, Hana Arayaselassie, deputy commissioner of the Ethiopian Investment Commission, says the Ethiopian government hopes businesses from Kunshan can invest in two square kilometres of land within the Dire Dawa Industrial Park. He adds officials are working to resolve any outstanding challenges impeding this investment.

Arayaselassie says a Kunshan investment plan involved "mainly Chinese textile firms [being] expected to invest…" in this plot.

She also provided no timeline for the investment and also could not confirm that US$500m was in the offing.

Meanwhile, construction of the Dire Dawa Industrial Park by the China Civil Engineering Construction Corporation (CCECC) continues, and its launch as a functional manufacturing hub is expected within the next few weeks, according to an Ethiopian government official. 

The US$158m park is also expected to host heavy industry, vehicle assembly, food processing, electronics and chemicals, as well as textile and apparel manufacturing and, when operational, will create direct and indirect job opportunities for close to 40,000 Ethiopians.

Government vision

Dire Dawa Industrial Park in eastern Ethiopia is part of the government's vision to transform the country into a world-leading apparel and textile hub.

Through its five-year 'Growth and Transformation Plan' (GTP-II), which runs to 2020, Ethiopia plans to construct 15 industrial parks with a budget of more than US$1bn. And in recent years, more than 70 garment manufacturers from Bangladesh, China, India and Sri Lanka have begun setting up factories in Ethiopia to produce garments for Western brands.

These investors are drawn to Ethiopia by a range of factors, including base wages as low as $26 per month – the lowest wage in the global garment sector – a large and young workforce, relatively low levels of corruption, and a potential, but as yet undelivered, supply of locally grown African cotton

However, a recent report by the NYU Stern Center for Business and Human Rights found that worker turnover and unrest is undermining Ethiopia sourcing, and that the country's efforts to attract international investment in clothing manufacturing is failing the Ethiopians who work in factories making apparel for some of the world's biggest brands.

Its findings are based on interviews with workers at several factories at the flagship Hawassa Industrial Park located 140 miles south of the Ethiopian capital of Addis Ababa. The park currently has some 25,000 employees and is supposed to grow to 60,000. Factories here produce for brands and retailers including Levi Strauss, Guess, PVH, H&M and Hanesbrands.

The report's authors subsequently shared their advice on just-style on How to support a virtuous sourcing circle in Ethiopia.

The International Labour Organization (ILO) last month launched a programme to promote decent work and inclusive industrialisation in Ethiopia – with an initial focus on the garment and textile industries. And a new EU-funded project aims to help some 21,000 cotton farmers, rural workers and garment workers in Ethiopia.