Recently, KPR Group, an integrated textile manufacturing company from India inaugurated its garment unit at the Mekelle industrial park and in the same month, Trybus Group, a Texas-based menswear clothing company started exporting garments from its unit at the Kombolcha Industrial Park. The Ethiopian government has been building industrial and textile parks in different cities of the country to enhance the textile productivity and help in attracting foreign investment. Textile and garments are the top products currently manufactured at Ethiopia’s industrial parks and at present there are around 175 textile units in various industrial parks of the country.
Main Textile industrial parks of Ethiopia
|Name of Industrial Parks||Address||Area (Ha)||Main Industries||Main Tenants at Park|
|Bole Lemi Industrial
|Addis Ababa||157 & 170||Apparel & textile||C & H Garment, Evertop Sportswear, C & H Garment, LYU Shoutao Factory|
|Hawassa Industrial Park||Hawassa||300||Apparel & textile||Arvind Apparel Manufacturing, ITL Apparel, Hirdaramani Garment, EPIC Apparel|
|Adama Industrial Park||Oromia||2000||Apparel & textile, Food, Manufacturing||Antex Textile, Sunshine Ethiopia Wool Textile, Kingdom Linen Ethiopia|
|Mekele Industrial Park||Tigray||1000||Apparel & textile||KPR Exports, Strathmore Apparel manufacturing, DBL Group|
|Jimma Industrial Park||Oromia||150||Apparel & textile||Under Construction|
Ethiopia’s textile and garment industry has attracted foreign investment from global brands (such as H&M and Calvin Klein) and the Government of Ethiopia believes that textiles is one the sectors that would help the nation become a middle-income country by 2025. The country has the potential to generate USD 30 billion in export from the textile and apparel sector by 2030.
The Ethiopian Government has set out plans to increase its textile and garment exports by $1 billion through its Second Growth and Transformation Plan II (GTP II). The sector is also expected to create more than 300,000 jobs during the planned period. Textile manufacturing and leather & leather products (like footwear, bags, jackets) are among the priority areas of investment as identified by the Second Growth and Transformation Plan of Ethiopia.
The textile industry in Ethiopia has much room for foreign investors. Specific investment opportunities in the textiles sector include ginning, integrated textile mills, spinning, weaving and/or knitting, dyeing and printing, production of garments; the manufacturing of knitted and crocheted fabrics, carpets, and sportswear. Ethiopia is a leading cotton-producing country and there is huge potential for foreign investors in cotton cultivation, particularly in Omo-Gibe, Baro Akobo, Blue Nile and Tekeze River basins of Ethiopia.
Ethiopia, one of Africa’s fastest-growing economies is projected to grow by 8.5% during the 2018-2019 fiscal year (IMF). In recent years governments reforms has succeeded in opening the Ethiopian economy for foreign investors, especially in commercial agriculture and manufacturing industry. Ethiopia alone accounts for over 33% of all FDI within the East Africa region. FDI inflow reached a record US$3.3 billion in 2018. China, India, and the USA are the main FDI contributor; other foreign source markets attracted to the country are France, the UAE, and Saudi Arabia. Ethiopia’s textile and garment industry in particular has attracted corporate investment from global brands and the country is likely to gain from the ongoing trade war.
As part of the Belt and Road Initiative (BRI), Chinese private textile manufacturers are exploring more avenues to develop an industrial base of Ethiopia and helps in transforming the country into a textile exporting hub of the region.
Abundant low-cost labor presents a comparative advantage to a foreign investor for export-oriented light manufacturing, particularly in leather, textiles, and agro-processing industry. Another important factor that attracts foreign investors is low power tariffs in the country. Ethiopia’s electricity cost is one of the lowest in the world. And finally, strategic location eases access to lucrative markets in the Middle East and Europe.
Select foreign investment in the textile sector in Ethiopia:
- Chinese textile manufacturing company Antex has established its facility at the Adama Business Park in Ethiopia
- Italy’s textile manufacturer Calzedonia has established its manufacturing facility in Ashegoda, in Ethiopia
- KPR Mills from India, has started a manufacturing unit in Ethiopia.
- British company, Intrade UK Ltd, made a $100 million investment on spinning and making textiles at the Mekelle Industrial Park
In the last five years the prominent foreign investors in Ethiopia in textile sector include Antex Group, Calzedonia, Intrade UK, Lonto Garment, Hela Clothing, Arvind Mills and Raymond Group.
Countries like Turkey and Sweden have already set up their foot in Ethiopia’s textile sector, and other FDI source countries are China, India, Italy, United Kingdom, Japan and France
To promote the textile industry, Ethiopia is organizing International Textile Machinery Exhibition (ITME) in February 2020. The first African edition of ITME will take place in the capital city Addis Ababa. ITME-Africa is expected to bring the world’s top textile leaders in one place. The event shall cover four broad categories: textile, textile engineering, financial institutions, and allied segment.