|
One of government’s six top priority areas, the
textile industry, is to witness a landmark expansion
at a project cost of one billion Br in the 2007/ 08
budget year. The expansion will be launched in six
textile factories owned by the state and leased to
private companies.
Through the Privatisation and Public Enterprises
Supervisory Agency (PPESA), the Ministry of Trade
and Industry (MoTI) instructed the factories to work
on the necessary expansions. Though the factories
welcomed the instruction, they requested the supply
of cotton to be improved.
The textile factories under the expansion projects
in the next fiscal year are Arba Minch, Bahir Dar,
Dire Dawa, Ethio-Japan Nylon, Awassa and Kombolcha.
The current production capacity of the Awassa
textile factory has reached 2,036kg of spin thread
while it aims to produce 3,866kg. It produces 6,428m
of weaved textile and plans to produce 9,147m.
Arba Minch textile factory plans to reach 3,086kg up
from 2,084kg of spin thread. Weaved textile is
expected to grow from 6,323m to 16,291m.
Bahir Dar Textile SC would increase its spin thread
from 2,000kg to 2,750kg and weaved textile would
grow to 10,000m up from 7,000m.
Other than the textile factories owned by the state,
private companies that would undergo expansion
projects are Alemaya Textile, Kebere Enterprise
(under state management), Adama Textile as well as
Africa Cotton.
Sources from MoTI told Fortune that, although the
whole project to expand the textile factories would
require eight billion Birr, in a phase by phase
project, the first needs one billion Birr.
In an effort to enlarge the opportunities of export
markets for the textile factories’ products,
government targets three textile factories in the
first phase of expansion projects, Beyene
Gebre-Meskel, manager of PPESA, disclosed to
Fortune.
According to Beyene, the first phase of the project
needs 400 million Br to expand the three textile
factories.
The Plan for Accelerated Sustainable Development to
End Poverty (PASDEP) hopes that after three years,
the country will earn 500 million dollars from
textile exports. To realise this plan, 1.6 billion
dollars investment capital is required.
Based on the plan, 48 enterprises in thread and yarn
and 31 in the production of grey textile, 22 in
knitted textiles and six for coloured, stamped and
finished textiles are to be included. In woven
garments, 53 enterprises and in knitted garments,
31, together with another 91 factories are expected
to be under the project. The plan also stipulates
that the existing textile factories should expand.
An expert from the textile sector told Fortune that
the government’s effort in the past to focus on the
garment industry helped establish more than 50
factories. However, the government initially
expected the existence of garment factories would
give an edge to the expansion of the textile
industry, which was not up to the satisfactory level
and the government started to focus more on the
expansion of textile, asserted the expert.
It is the second year since PASDEP began
implementation; however, the textile export
performance is well below the level of expectation.
The planned export earnings from the industry was
62.4 million dollars. However, it only garnered 12.6
million dollars.
Sources from MoTI told Fortune that performance in
terms of earnings from export was low, as factories
under construction could not enter into the
production line and export their products. However,
in the next fiscal year things would change for the
better, he added.
Seleshi Lema, the head of the leather, leather
product, textile and garment development department
under MoTI, emphasised the importance of the esector.
“This sector has been one of government’s top
priorities and over the past three years we learned
from the experiences and made a lot of improvement,”
he told Fortune. “This project is part of this
priority.”
As the textile industry grows, the demand and
consumption of raw materials (cotton) would
increase. The private sector would be encouraged to
participate in cotton farming and, moreover, the
state farm development enterprises are expected to
be active in the production of cotton and PPESA
would assume the responsibility to translate the
plan.
In line with the plan to increase the supply of raw
materials for the expansion of the textile industry,
PPESA has included the Abobo Agricultural
Development Enterprise in Gambella Regional State
under its first project to implement cotton
production.
The Enterprise in Gambella owns 1,500hct of land,
part of which has been growing cotton. An additional
of 7,000hct of land has been obtained from the
region and the land grows the cotton plants.
During the just ended fiscal year, from 3.9tn of
cotton exports, 12.6 million dollars has been
earned. Since the production of cotton in Ethiopia
is not widely demanded by the textile factories, the
industry had to import cotton from overseas.
Currently, the project to develop cotton production
locally with the required standard is undergoing as
well as growing hybrid cotton and meet the
industry’s requirement, sources disclosed.
|
