Novel Denim Holdings Limited announced today that under the recently passed African Growth and Opportunity Act apparel manufactured in both South Africa and Madagascar is now fully eligible for duty-free and quota-free treatment when entering the United States, subject to certain conditions.

Apparel produced at Novel Denim's Mauritius facilities became eligible under this legislation in January 2001.

KC Chao, president and chief executive officer of Novel Denim, said in a statement: "With this recent clearance, we are now able to ship our garments into the United States on a duty-free basis from all of our manufacturing facilities. As one of the largest apparel manufactures in the region, producing over 12 million quality garments a year, we see an enormous opportunity to further develop our business with existing as well as new customers in the United States."

Under the African Growth and Opportunity Act, South Africa qualified with the same status as Mauritius, requiring fabrics to be manufactured from yarn of African origin.

Madagascar was qualified with a special exemption permitting the use of non-African produced yarns and fabrics for a period of four years.

"This special benefit is particularly helpful for our new knitted garment business, which can use fabrics from countries such as China and still retain the duty-free status," said Mr Chao. "As a result, we now have the added flexibility to optimize our fabric production capacity in South Africa and Mauritius for use in our own garments, as well as for sales to regional garment manufactures who require African produced fabric to qualify for duty-free entry into the US."