Multinational textile companies are increasingly pitching their tent in Ethiopia, Africa’s second most populous nation. This week, BDL Group, a Bangladeshi company announced a $30 million (765 Million Birr) investment, which will go into the construction of a textile and garment factory in Mekele City, Ethiopia.
The factory will be built on 68 hectares of land received from the Mekele City Administration and will employ at least 3,000 locals.
According to reports, construction will commence by December and production will be delayed till the last quarter of 2015.
BDH’s investment comes barely a month after Chinese textile company, Jiangsu Lianfa Textile Co. Ltd revealed its plan to build a $500 million textile factory in the East African country after making similar pre-investment assessments in Kenya, Uganda, and Tanzania.
Jiangsu Lianfa Textile Co. is a leading textile company with extensive operations in various countries in where it sells woven fabric, apparel and textile. Its plant, which will be situated in Ethiopia’s capital city, Addis Ababa, is expected to create at least 20,000 jobs when operational, inside sources have revealed.
Mekele believes that the growing influx of investment in Ethiopia’s textile business will enhance the country’s efforts to improve local companies engaged in the manufacturing sector.
While The Economist projects an annual growth of 7 to 8 percent through 2016 for the country, Ethiopia’s Government Growth and Transformation plan places growth rates of at least 11.2 percent per annum during a decade long period it set to achieve a middle-income status.
One of the important sectors it hopes will play a primary role in achieving this status is the manufacturing industry, for which textile is grouped into.
According to Thomas Ballweg, a procurement and technical consultant at GermanFashion; Ethiopia offers a number of advantages that could make it play a major role in the textile/fashion business.
“On the one hand are the lower costs – much lower than in China – with 80 million people living there. And, it’s near the sea – and quick to get to Europe via the Suez Canal,” Ballweg said in a media report.
Ethiopian textiles are mostly exported to China, Italy, Germany, Turkey, China, Italy and the US. Last year, Ethiopia made $111.45 million from exporting textile.