Could Ethiopia be the next sourcing hot-spot for the apparel industry? The government clearly hopes so, and has set its sights on increasing textile and clothing exports from US$11m in 2005/6 to $500m by 2008/9 - as Niki Tait found out on a recent visit.

The Ethiopian government has highlighted the textile and clothing supply chain as one of the country's key targets for growth, help and investment over the next few years, and plans to raise the level of textile, knitwear and clothing exports from US$11m in 2005/6 to $500m by 2008/9.

This industry focus is part of a major project to accelerate Ethiopia's industrialisation, reduce its dependence on subsistence farming, generate foreign income through exports, increase employment and therefore reduce poverty. And the government has pledged as much assistance as possible to achieve its goal.

Exports of knitted and woven clothing and home furnishings account for 45% of the government's overall export goal. However, existing factories either cater for the growing domestic market or export insignificant volumes relative to the programme's targets.

Industry benefits
The country itself can offer many benefits to the industry. It grows abundant indigenous raw cotton and has the potential to produce other natural fibres including organic cotton, flax, hemp, ramie, silk, and even bamboo.

As the world's second poorest nation with 76m inhabitants, there is plenty of low cost labour. It has abundant water supplies, and its electricity is the cheapest in Africa.

Located on the Horn of Africa with easy assess through the neighbouring port of Djibouti to the Red Sea and thus the Middle East, and through the Suez into the Mediterranean and thus to Europe and out to the US, Ethiopia is well situated to trade on the world market.

Under certain trade rulings, there are no duties payable on textile exports from Ethiopia to Europe or the US, and favourable tariffs under all sorts of bilateral and GSP agreements with many other countries.

Since the overthrow of the communist Derg regime in 1991 Ethiopia has had a stable government operating a market economy with an anti-corruption policy.

Infant industry
However, the textile and garment industry today is still in its infancy. It consists of eight integrated textile mills, all of which are still government owned apart from Almeda Textiles, two spinning mills, two yarn and thread factories and three blanket factories.

The aggregate capacity of these factories is 120m square metres of fabric and 32,000 tons of yarn per year. Most of the factories have become obsolete due to old age and under-investment and operate at significantly below the capacity they were originally designed for.

About 110,000 tons of raw cotton is produced per year, of which only around 6,000 tons is exported. All other materials including synthetic threads, yarns, fabrics, chemicals and accessories have to be imported.

The private sector is mainly involved in knitting and garment production. There are currently about 44 clothing companies, many of which are very new, and a further 80 in some stage of development.

However, many of these newly built and equipped clothing factories are mainly sitting empty, desperate for export orders.

Products made include men's, ladies' and children's outer, casual, work and sports wear, knitwear including T shirts and polo shirts, as well as traditional hand woven textiles.

There are, however, no factories making fully fashioned knitwear, athough Nazareth Garments is considering expanding into this area and Narga Garments has just taken possession of two Forte sock machines, each with a capacity to produce 1000 pairs in eight hours, and appropriate linking machines to go with them.

Most of the garment factories have been set up to make a mix of knitwear and woven goods. These include Almeda Textiles, Elias, MAA Garments, Ras Dashen, GMM Garments, Haile Garments, Knit to Finish, Mulat Garments, Narga Garments, Oasis Abyssinia and Yonis. The first four also produce circular knits or have concrete plans to do so.

Locally based souring companies include Klowt Africa and Total Textile and Garment Services (TTGS), the latter established in 2006 as an Ethiopian/UK partnership. TTGS not only sources products from Ethiopia, mainly for the UK market, but also acts as a consultancy to companies thinking of sourcing from, or investing in, the area.

Ethiopia's textile and garment industries mainly cater for the domestic market, but are increasingly focusing on the export market as a result of favourable government policies and support.

Of the private operators, Nazareth Garments, Almeda Textile, Muya, Maa Garment, Mulat Garment, Ras Dashen Textiles and Knit to Finish, for example, all export.

Training gap
There may be no shortage of labour, but most is unskilled. And with no governmental training centres, training has to be carried out in-house. The cost of labour in the Ethiopian textile sector appears to average around US$35 per month for a factory worker.

Generally there is lack of managerial skills in all areas including marketing, design and pre-production, production and operations management, quality management and industrial engineering techniques.

To help counteract this problem the government is helping to finance up to 75% of the cost of overseas consultants. There is a university at Bahir Dar educating textile engineers, though the training appears more science based than practical and there is a strong need for textile technicians.

There is no garment design, technology or manufacturing training carried out within the country, though a new degree in this area will start in 2007. Consideration is also being given to establishing a degree in knitting.

One of the benefits from the fact that Ethiopia has such a new and undeveloped textile and clothing industry, though, is that it hasn't picked up any bad habits. Management wants to produce to the standard required by the customer, but needs guidance to do so, and with help and time, sustainable long term partnerships are likely to be forged.

It is an industry so far established by entrepreneurs rather than trained industry specialists. But don't expect to submit a one-off sample and assume the order will be produced on time to the required quality level without any input.

Niki Tait, C.Text FTI, FCFI heads Apparel Solutions which provides independent assistance to the apparel industry in the areas of manufacturing methods, industrial engineering, information technology and quick response.

The author would like to thank the Ethiopian Ministry of Trade and Industry, the Ethiopian Textile and Garment Association and Total Textile and Garment Services Ltd for their help in the making her visit to the Ethiopian textile and garment industry possible. Thanks are also extended to all the companies and associations visited for their help, and to Kastro Jimma of UNIDO for providing much additional information.