Once fully up-and-running, the Hawassa Industrial Park will create around 60,000 jobs

Once fully up-and-running, the Hawassa Industrial Park will create around 60,000 jobs

Ethiopia's flagship industrial park in Hawassa city, south of the capital Addis Ababa, opened last week, with facilities dedicated solely to the textile and apparel sector.

The newly built US$250m Hawassa Industrial Park will offer 37 factory units on a 300-hectare plot – and, as reported on just-style earlier this year, will produce clothing for US giant PVH Corp, owner of the Tommy Hilfiger and Calvin Klein brands.

PVH prepares for Ethiopia production

According to local news reports, some 15 leading textile and garment companies from the US, China, India, Sri Lanka and six local companies are ready to start operation in the park. Once up to full capacity, facilities are expected to create around 60,000 jobs and generate a total export value of US$1bn. 

The park is also Ethiopia's first major eco-friendly development, and will be mostly powered by renewable electricity sources (hydro-electricity), with energy and water conservation efforts including natural lightning and ventilation, low consumption bulbs, recycling of rain water, and solar powered LED street lights.

The park, which was designed and built by China Civil Engineering Construction Corporation (CCECC), will be used as a model for other industrial parks due to be built in other parts of the country such as Dire Dawa, Kombolcha, Adama and Mekele. Of these, Mekele already benefits from established textiles and leather sector.

With Chinese help the Ethiopian government is also improving Hawassa's connectivity with an extension of the Addis-Adama highway to Hawassa, the construction of a domestic airport, and the extension of the Addis-Modjo-Djibouti port railway to Hawassa.

Ethiopia's growing clothing and textile sector is expanding following a pledge in 2014 from the World Bank to spend US$250m in financing Ethiopian government plans to build seven industrial parks over the next five years.

The vision is to create 2m manufacturing jobs over the next ten years with the construction of 20m square metres of factory space per year, building on a steady growth rate for the sector of 20% annually over the last five years.

Ultimately, the industrial parks are seen as a cornerstone for the growth of the manufacturing sector that will help Ethiopia realise its vision to become middle income country and top light manufacturing hub by 2025.

While apparel firms such as Hennes & Mauritz (H&M), Asos, George at Asda, Calzedonia, Primark and Tesco are already sourcing from Ethiopia, the country's exports have fallen short of expectations, with a range of issues blamed including managerial and technical expertise, power outages and fluctuation, a shortage of manpower and high turnover, weak company linkages, and delays in implementing investment projects.

While apparel exports from Myanmar stand at $1.5bn, Turkey at $18.7bn, and Vietnam at $24bn, Ethiopia's apparel exports reached just $112m in 2014.

That said, speaking at Prime Source Forum in Hong Kong earlier this year, Mark Green, executive vice president of global supply chain for PVH, said the company's experience in Ethiopia has been "nothing short of exceptional." 

Of the Hawassa investment, he explained: "We went in with a concept of 'let's take a brand, best-in-class mills and manufacturers, and let's create something unique and special'. We wanted to create a vertical supply chain, we wanted it to be scalable for the industry so it could grow in a thoughtful and planned way. We wanted it to be sustainable, to make use of green energy, green technology, and we wanted it to be best-in-class. 

"We wanted to take all of our learnings into Ethiopia and build something anyone involved in the country would be proud of. And it will be a blueprint example for the rest of the world to follow."

Ethiopia sourcing vision starting to take shape

Assessing Africa as an alternative apparel source