Among the garment manufacturing companies in Ethiopia, there are a number of big names. These names are: Huajian Group, Beconnected Industrial, Bahir Dar Textile Share Company, Ayka Addis and H&M.
1 Beconnected Industrial
Currently, Ethiopia’s textile industry has little sophistication. Although, it offers a lot of promise, its potential is not yet fully realized. The government is committed to making the industry flourish, with the textile and apparel sector being a key component of the country’s industrial manufacturing strategy.
With a promising demographic, abundant clean renewable energy, low labor cost, and competitive energy prices, Ethiopia has the potential to become a center for the textile and apparel industry. Moreover, the country’s proximity to the US and EU markets will boost textile and apparel exports.
The Ethiopian government has also introduced many incentive schemes for investors. For example, it has approved low interest loans for garment industry businesses. These loans can be used to upgrade the technology in the industry. The government is aware of the shortcomings of the industry, as it lacks efficient systems for the basic technology tools. It is focusing on capacity building and knowledge transfer.
There is a growing number of textile and apparel businesses in the country. Most factories are owned by foreign companies. There are also a large number of companies with state-of-the-art machinery that are idle. The garment industry is also a lagging behind in terms of digital processing of transactions.
Ethiopia’s garment and textile industry is a small industry. In 2014, it contributed 6% of the total value of exports. It is not yet a mature industry, and needs to be developed further to compete in the global market.
While the country’s industrial policy has been successful in developing local export firms, its focus has been less successful in developing competitive domestic firms. It has not implemented a successful quality management system, nor has it successfully established linkages with the national economy.
2 Ayka Addis
Currently, Ethiopia’s textile sector is attracting international companies. There are more than 150 planned factories. Leading retailers such as Primark, H&M and Walmart have already set up production units in Ethiopia. In addition, Indian and Chinese companies are making inroads into the country.
One of the biggest Turkish-owned garment manufacturing companies in Ethiopia is Ayka Addis. This factory was established in Alemgena, west of Addis Ababa. It is expected to generate at least 100 million USD in annual revenue. It also expects to create at least 10,000 jobs.
Ayka has a close ties with most major garment manufacturers in Turkey. It is a vertically integrated textile firm that manufactures ready-made garments, knitted apparel and home textiles. It also plans to establish a five-story industrial complex. It plans to rent out buildings to relocating factories.
The factory’s main customers include American multinational retailer H&M. The company has established an office in Ethiopia and is working to form a cluster of suppliers.
In January, the Ethiopian government invited Chinese textile companies to invest in the country. They plan to build at least 200 new units. The government expects to generate more than $2 billion in export revenue from the relocation.
The Ayka Addis Textile & Investment Group is one of the largest textile complexes in sub-Saharan Africa. It is located twenty kilometers west of Addis Ababa. The factory has four production sections and a staff of about 4157. It was built with a budget of 140 million USD. Part of the construction cost was covered by the Development Bank of Ethiopia.
In March, Tesco announced that it will open a fashion manufacturing plant in Ethiopia. It is estimated that this will bring 60,000 job opportunities to the region.
3 Huajian Group
During a meeting with late Ethiopian Prime Minister Meles Zenawi, Chinese executives told him the Huajian Group could build a shoe factory in Ethiopia. They were given the green light by Meles, who recommended the venture as a way to stimulate economic growth in Ethiopia.
Huajian shoes are manufactured at the company’s Ethiopian factory in Dukem town. The shoe factory is a small but efficient operation that provides employment opportunities to local residents. The factory employs 2,000 Ethiopians and 200 Chinese management employees.
One of the most important pillars of China’s relationship with Ethiopia is the shoemaking industry. The company is planning to make Addis Ababa the hub of shoe production in Africa within the next decade.
The company has been a major beneficiary of the country’s BRI (Borderless Realignment Initiative) program, which has led to a 57 percent increase in the export of local leather products. It has also received substantial subsidies from China to help it run its Eastern Industry Zone.
The company’s new supply chain would export to the US and Europe within ten years, generating more jobs in Ethiopia and helping the government’s economy. The company plans to create at least 100,000 new jobs in its industrial zone.
The company has a number of facilities in Addis Ababa, including a canteen and a laundry service. The company has also committed to invest $2 billion with the China-Africa Development Fund. The World Bank’s private-sector lending arm has also shown interest in the venture.
Despite the criticism the company has received, Huajian has made many good efforts to improve productivity. It has also emphasized employee welfare. It has created a comprehensive training system for new-comers to the industry, giving them hands-on training from experienced mentors.
4 Bahir Dar Textile Share Company
Founded in 1961, Bahir Dar Textile Share Company is a leading textile manufacturing company in Ethiopia. The company produces a variety of products including bed sheets, home textiles, yarn and fabrics. The company offers fast delivery and high quality products at low cost.
The company works in a sustainable manner. It is a vertically integrated textile mill. The company uses organic cotton in its products. It also uses environmentally friendly manufacturing processes.
The company has a good network for sourcing. It also utilizes the most technologically advanced machines. The textile factory produces 82 thousand m2 of fabric per day. The spinning department produces 15 tons of yarn each day. The weaving department can produce 50 thousand meters of fabric.
The company sells its products both domestically and abroad. It also aims to expand its activities. The textile industry in Ethiopia is growing at a good pace. The garment and textile sector is expected to grow 40% in the coming years. The government of Ethiopia has put out a growth and transformation plan for the industry. It targets 2.4 billion USD in 2022. The textile and garment sectors are expected to contribute 17% to total manufacturing value.
The textile industry has attracted foreign investment. The country is an attractive place for companies due to the availability of cheap labor and energy. In addition, the textile industry is expected to contribute to the economic development of the country.
The factory has a well treated water resource from the town. It is located on the shore of Lake Tana. It produces high-quality garments and textiles. The factory also implements quality management system based on ISO 9001:2015.
The company has a branch in Addis Ababa. The company exports its products to western countries. It is also certified by Oeko-Tex 100 standards.
During a recent trip to Ethiopia, the Swedish retailer H&M and its investor Swedfund were able to visit two of the country’s most promising garment manufacturing companies. The two firms are working to create a more sustainable and ethical textile industry in Ethiopia. They are also working to set standards for socially responsible production.
The garment manufacturing industry in Ethiopia is just beginning to take shape. The nation has been pushing for the growth of its apparel industry for several years. Its government has identified apparel as a key sector and has been sending officials to Asia to learn best practices.
A large number of potential suppliers have already established factories. The apparel industry in Ethiopia has the potential to become a larger player in the global market. Some of the world’s largest retailers have been looking for alternatives to the soaring cost of manufacturing in southern China for a few years now.
The country has long hoped to be the next big textile destination. It beat out other East African nations including Tanzania, Uganda and Kenya, in part because of cheap labor and renewable energy.
According to the Bernstein investment-research firm, it is now cheaper to make clothes in Ethiopia than in China. The country’s customs service is not as efficient as it used to be, and its road link to the port of Djibouti is crowded in many places.
The Hawassa Industrial Park, located 140 miles south of Addis Ababa, is home to a number of low-wage, labor-intensive factories. Some of its customers include Levi’s and Guess. It also produces for the likes of PVH, Gap, Primark, and Tesco.
Another of the garment manufacturing companies in Ethiopia is the Velocity Apparelz Companies, which started producing at a $50 million factory in Mekele, northern Ethiopia, last year. The company aims to double its production over the next two years.
Henry Pham (Pham Quang Anh), CEO of DONY Garment
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