Plans to build a major textile factory in Ethiopia are closer to being realised for Chinese textile company Jiangsu Lianfa Textile Co Ltd, after a pre-investment plan to construct the US$500m factory was finalised this month. 

Its decision to invest in the Horn of Africa country comes after making investment assessments in Kenya, Uganda and Tanzania. The Chinese textile firm already undertakes up and downstream work in China including yarn spinning, dyeing, weaving, printing and finishing.

A delegation from the textile company, headed by its chairman Kong Xiangiun, visited Ethiopia last month to meet government officials including the country's President Mulatu Teshome.

The Ethiopian government assured the delegation it would offer full support. Ethiopia's textile industry is the nation's third largest manufacturing industry and a source of growing export earnings.

"The company has decided to invest in Ethiopia due to the benefits and favourable conditions offered to foreign textile investors including cheap electricity, duty free tax concessions on textile exports as well as machinery imports, cheap labour costs and good land access", said Ethiopian Textile Industry Development Institute (ETIDI) spokesman, Bantihun Gessese.

The Chinese textile firm exports woven fabric, textile and apparel products, formal and casual men's wear and women's wear to North America, the European Union, south-east Asia, South America and China.