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NEWS & RESEARCH FROM THE AFRICAN CONTINENT
(#3 / 2019 - 19 February 2019)
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NEWS

ETHIOPIA - TEXTILE FACTORY TO BE PRIVATISED, 9 February 2019
The Ethiopian government will surrender its minority share in BM Ethiopia Garment & Textiles, the former Adey Abeba Yarn Factory II. To fully privatise the company, the Public Enterprises Holding & Administration Agency has floated a tender to transfer the remaining 49% share it holds in BM Ethiopia. The 58-year-old company sits on 39,820sqm of land and operates with 530 permanent employees producing blankets, yarn and fabrics. Hwan M. Ryu and the government of Ethiopia partnered to run the factory in 2011. READ HERE >>

Comment
I guess in Ethiopia it is not only going to be about privatising textile and apparel companies where the state has interests – but it will also be about trying to bail-out Ethiopian textile and apparel companies that have failed into which government development agencies have ploughed loads of public resources. See the article on Ayka Addis in the last edition of this newsletter.

Seems like UK taxpayers have been roped into another this lets-bail-out-the-Ethiopian government exercise. The UK's Department for International Development's funded Enterprise Partners project has now advertised for an expert to who will advise on the policy, process and procedure and disposal of repossessed assets by Development Bank of Ethiopia.
READ HERE >>



MAURITIUS – TROUBLE ON THE HORIZON FOR ITS TEXTILE & APPAREL INDUSTRY? February 2019
PALMAR TEXTILES
Palmar (SEE >>) a 1,300 employment (including 904 Mauritians) textile and garment factory based in Mauritius has been placed under receivership. Apparently, the company owes creditors about Rs600m (US$16.5m). Palmar has a fabric knitting and finishing plant (maximum capacity of about 200 tonnes per month – but rumour has it that it's been operating at far less than full capacity utilisation for some time); and the company also makes jeans and knit garments. READ HERE >>

COMPAGNIE MAURICIENNE DE TEXTILE (CMT)
CMT (SEE >>) which currently claims to employ 10,000 people is rumoured to be considering retrenching half of its workforce over the next three years. CMT makes knit fabrics (1,000 tonnes per month), and knit garments. The company's MD is reported as saying that he planned to expand his company's operations in Madagascar and Bangladesh (and even perhaps Mozambique) leading to speculation that this may mean a reduction in the workforce at its Mauritian operations. READ HERE >>

Comment
Azad Jeetun, economist and former director of the Mauritius Employers' Federation, finds that the case of Palmar is symptomatic of the fate of many textile companies facing a cash deficit and crumbling under massive debt. "There is no doubt that while the production costs of this sector are already high, making companies less competitive on the international market, the advent of the minimum wage in January 2018 has made the situation worse". "Worse, there has not been a rise in productivity among the labour force, with the result that wages have continued to rise, again based on a generally rising inflation rate." The minimum wage is currently. Rs8,140 (US$237). READ HERE >>

It is interesting to note that Palmar used to have manufacturing operations in Mozambique. It established the "Belita Mozambique" in the port city of Beria – about 600 jobs created; with a US$7m investment. This plant closed in September 2005. According to a US Embassy cable release by Wikileaks (SEE >>) the company also abandoned plans to open a 550 job jeans factory in Maputo. The reasons behind the closure include: "According to Palmar Group Project Manager, the closure is a result of several factors, not the least of which was Belita's inability to secure orders from US-based buyers (probably caused by significant difficulties adjusting to the realities of a post-quota China trade environment). Other factors leading to the closure included increasingly expensive logistical issues with the ports of Beira and Durban and rising costs charged by its shipping agent. Mozambique's lack of a well-trained workforce translated into lower labour productivity and quality control."


SOUTH AFRICA – H&M TO ESTABLISH SOUTH AFRICAN SOURCING OFFICE, February 2019
According to an H&M job advert: "Proudly made in South Africa" is something H&M endeavours to support and is now looking for a Supply Chain Specialist that can initiate and drive the test processes of local sourcing. You will be responsible for the startup and execution of this project and if successful implement it as our standard practice for the retail operation in South Africa. This is a new exciting role that can pave the road to new opportunities for H&M and the South African textile industry. Functioning as the bridge between our retail and production operation it will be crucial to identify new opportunities and ensure execution. Sounds like you? We are looking to recruit an experienced Supply Chain Specialist. You will be based in Cape Town, on a 12-18 months assignment. Reporting to Country Manager of H&M South Africa and dotted line to Africa Production Manager." READ HERE >>

A Background to H&M's New South African Sourcing Office
Parliamentary Reply to a Question – South African Minister for Economic Development Ebrahim Patel: H&M is reportedly the world's second-largest clothing retailer, with stores in a number of countries, including in South Africa. Earlier this year, the company featured an advert of a black child wearing a sweatshirt with the words "coolest monkey in the jungle" etched on the front. The company was widely criticised for insensitivity, and some responded with outrage. The company issued a public apology and hired a diversity leader to strengthen company sensitivities. It had been known for some time that the company has not used South Africa as a source for the manufacture of clothing. The Economic Development Department (EDD) reached out to the company to draw to their attention to the fact that the African continent is not purely a consumer market for goods but also a source of clothing and textiles. The Swedish ambassador also facilitated discussions between the company and government as well as NGOs. During the discussions, it was acknowledged that every single item in an H&M store from assets, stock in trade and consumables is imported. The EDD and some NGOs pointed out that a full and complete mea culpa would preferably include using South Africa as a source for clothing and other consumables, which would create local jobs and help to bring down levels of unemployment in the country. READ HERE >>

Comment
What is interesting with this South African position is that its only an 18-month contract. And after that? H&M has recently appointed a new South African country manager (apparently an expatriate) whose primary job, I imagine, is one concentrating on managing their expanding retail operations. Will this person take all the knowledge of the 18-month incumbent and then manage South African sourcing? I guess there is no chance in hell that H&M will use Southern African manufacturers to supply product to their global operations. It is more likely to be the case that the appointed person will scope South African manufacturers for possible suppliers that will only supply South African stores with relatively derisory amounts of garments and home textiles.

There is also a link – the "dotted line" – to an "African Production Manager". I presume that this must mean a person based in Ethiopia – a place where H&M have placed some huge sourcing bets! However, what is going to happen there is a mystery too for H&M are rumoured to be reorganising their senior management staff in the country. Watch this space – will H&M's Ethiopian office be given enhanced capabilities; or will it be downgraded. Remember – there has, apparently, recently been a significant re-organisation of how PVH manages its East African production with new staffers being brought in … others moved sideways … and some departed!



SOUTH AFRICA – RETAILER EDCON'S WOES


Updates on the EDCON Restructuring
Apparently, the EDCON group needs about R3bn (US$213m) to get it out of its current predicament.

One hears that the core elements of its rescue package hinges around three issues: i) mall owners which rent space to EDCON stores agree to convert rental reductions into equity; ii) that South African banks that hold EDCON bond notes should convert these into equity (apparently one bank is not meeting this standard); and, iii) substantial funding should be injected into the business.

It has been rumoured that South Africa's Public Investment Corporation (the institution that manages public service workers' pensions) was set to comit substantial funding (apparently around R1.8bn (US$128m)) but then it withdrew from the deal. Its possible that some of the recent disclosures of some of its allegedly rogue investment activities may have given it cold feet; or after a due diligence exercise they considered the potential investment to be a poor one.

So what funding source is left? Apparently, the country's Unemployment Insurance Fund (UIF) is now mulling options. A 2016 amendment to the law that governs the UIF provides that the revenue it has collected may also be used for the "financing of the retention of contributors in employment and the re-entry of contributors into the labour market and any other scheme aimed at vulnerable workers." Of course what will be interesting is: i) will the funds made available by the UIF be sufficient for EDCON?; and, ii) if the UIF commits to making a contribution who will manage its "investment" for they certainly UIF staff would not have any skills to do this!

In the meantime landlords and suppliers of clothing / footwear / home textiles must be getting anxious - will they be paid in full and on time for the goods they have supplied the group. Apparently EDCON has already missed making some payments to some manufacturing vendors - no doubt many who are owed money are now praying that EDCON had a good trading weekend for, at this point in time, its the only place where EDCON can get cash!

The sale of Celrose? 13 February 2019
The South African Minister of Economic Development made the following comments during his input into the State of the Nation debate: "While the Democratic Alliance (DA) plays the critic on joblessness, we are taking steps to create jobs, like at … [the] Celrose factory in Tongaat which created more than 600 jobs over the past 2 years." READ HERE >>

Comment
But with Celrose there are still strong rumours that South Africa's Industrial Development Corporation (IDC – which reports to the Minister for Economic Development) has been roped into to buy the stake currently owned by the distressed Edcon retailer (SEE >>). Buying Celrose – purportedly one of South Africa's better garment manufacturing plants – will come with some high risks. Much of its production is clearly focused on Edcon – and as the retailer struggles it may buy more imported goods; and, its reduced square meter footprint (EDCON is trying to downsize the amount of space that it rents) will result in it selling fewer clothes. So taking over a plant with high exposure to Edcon will have loads of problems for the purchaser. If you are interested, you can read more about Celrose in a 2015 South Africa's Competition Tribunal ruling related to Edcon taking over it's the manufacturer. READ HERE >>



SOUTH AFRICA – WOOLWORTHS WOES, 11 February 2019
Some snippets from a radio interview:
Nompu Siziba: "So we know that much of Woolies' problems stem from their apparel. What have their problems been exactly, and to what extent have the likes of Zara, Cotton On – and even our local stores like Mr. Price and Jet – disrupted the retailer's fortunes?"

Brian Thomas: "Let's separate the Australian business from the South African business for now. In the South African business everyone will appreciate there is effectively the food business and then there is the clothing business. The food business has been an incredible performer over time. The clothing business has been one that has suffered various misfortunes in South Africa. It is primarily around women's clothing where the missteps have been made, probably mainly over the past 24 months or so. I'm not a fashion guru myself, but I understand that some of the big mistakes that they made were in going "too fashionable". The clothing cuts that they had in their stores for the target market that they were aiming at were too short, and just not the right fashion for the target market, which is kind of the woman from 25 to 35 or 40. That just wasn't appropriate. What they are doing at the moment – and, as I say, I qualify this by saying I'm no fashion expert, but I certainly see it in my local Woolworths – is they are very much going back to the basics, back to basic T-shirts, the basic stuff that everyone in that age category will be prepared to wear. When you do that, you do start to compete head-on with a number of the other retailers in the space.

"But another big one that has cropped up of late is Pick n Pay Clothing, which is very competent in that basic space. And many of the international guys which you spoke of – I think if anything they came in with a big bang and everyone rushed off to H&M, Zara and so forth – those have probably fallen back a little over the course of the past year or so. So the initial market share gains have been given up, and you are starting to see the locals taking a bit of market share again. So there is potential in South Africa for Woolworths to turn that clothing business around very strongly if they get the basics right.

"All of the retailers in South Africa, particularly the clothing retailers, have had a tough time of late. There are not many that one can point to as being massive successes in terms of share-price returns. The earnings of a number of these companies have been under significant pressure, and really it's a function of the very weak consumer in South Africa. I certainly feel, and I'm sure you do, that there is not a lot of extra money in the pocket at the end of the month, and that is translating to very stagnant sales by the retailers. Up to now, the retailers across the board in South Africa, in my opinion, have done a very good job at working on the cost line. So they've been able to still generate small amounts of profit growth by containing the costs. I'm not talking about the cost of the goods that they are selling, but the other costs – the rentals that they are paying, the staff that they are paying, and so on. That has been able to generate some profit and earnings growth for them over time.

"Laurium Capital's current feeling on this one is that they are starting to run out of a bit of road on that cost lever. There is a little more than they can do with the landlords, but not a whole lot more they can do with the staff costs. As a result, your earnings growth is going to be fairly stagnant in a lot of the clothing retailers for some time. As you know, it's earnings growth that drives share-price growth, so we need to see earnings growth coming back. What will really drive that is consumer confidence, more people in the shops buying more, driving the top line, the sales line, which eventually will lead to the profits.
READ HERE >>


ZAMBIA – BELARUSIAN FIRM TO MAKE ZAMBIA AIRFORCE UNIFORMS? 14 February 2018
A Belarusian manufacturer of textile products Mogotex is expanding its export market and intends to sell textile products to Southern Africa. The company has reached an agreement on making special clothes for the Zambian Air Force. A Zambian military delegation visited Mogotex in December 2018. Mogotex specialists visited the main base of the Air Force & Logistics Command of Zambia in January 2019. Mogotex specialists are now busy designing field uniforms, making samples of trousers, raincoats, and high-visibility vests. In March-April 2019 representatives of the Zambian Air Force will be able to test the special clothes made by the Belarusian company to evaluate the quality. After that, the samples will be sent for approval of the commanding officer of the Zambian Air Force. READ HERE >>

Comment
While no commercial deal has been struck it is hard to believe that no company in Botswana or in South Africa could not make these garments.


KENYA – BT COTTON DEBATE RAGES

In support of BT cotton (13 February 2019):
The surge in support for biotech in Kenya is partly the making of President Kenyatta, who views the release and commercial production of Bt cotton as essential for the revival of the country's textile industry. "President Kenyatta is prioritising food security, affordable housing, universal healthcare and manufacturing," said the head of plant transformation laboratory at the Department of Biochemistry at Kenyatta University. The scientist stated that he believed that once Kenya starts growing its first Bt variety that it will be only a matter of months before the other East African Community (EAC) countries of Uganda, Tanzania, Rwanda, Burundi and South Sudan follow suit. READ HERE >>

In a contrary Kenyan view (16 February 2019):
Before propagating genetic engineering, a technology whose public safety record is widely contested, stakeholder engagement across the board should have been paramount. Yet the Kenya Plant Health Inspectorate Service and the Kenya Agricultural & Livestock Research Organisation proceeded with National Field performance Trials and Confined Field Trials without upholding this principle, which would have required, among other considerations, publication of the trial protocol. Why the secrecy, especially when threats to public health such as environmental pollution due to pollination of transgenic materials are widely acknowledged in the scientific community? The reasons for declining cotton output have not been sufficiently interrogated but have largely been blamed on climate change – for which GMOs are constantly prescribed as the solution. READ HERE >>


SOUTH AFRICA – BT COTTON, 5 February 2019
Bt cotton was the first genetically engineered (GE) crop variety to be grown commercially in sub-Saharan Africa. The cotton area planted increased by 110% to 37,426 hectares in the 2017/18 production season, from 17,841 hectares in the 2016/17 production season. The increase in hectares planted was mainly due to the more favourable prices of cotton in relation to competitive crops, the renewed interest in cotton production, and better climatic conditions. All cotton plantings in South Africa are GE. READ HERE >>


ZIMBABWE - FOREX SHORTAGES CRIPPLE TEXTILE SECTOR, 13 February 2019
According to the Secretary General of the Zimbabwe Textile Manufacturers' Association production in the textile sector in Zimbabwe remains subdued. In 2018 it hovered at around 40% capacity utilisation mainly due to foreign currency shortages and an influx of cheap imports. It was stated that the shortage of forex affecting the textile industry was because the sector was not a priority one for the Reserve Bank of Zimbabwe. READ HERE >>


ZIMBABWE – MERLIN WOES, 12 February 2018
Merlin's judicial manager has pleaded with company shareholders to withdraw court cases or risk the company's total shutdown. Once listed among the largest textile companies in the country, with over 2,000 employees, the firm was placed under judicial management for the third time in December 2011. The judicial manager said two potential investors, Cottco Pro Company and Baobab Spinning, had shown interest in the company, but the ongoing legal battles with shareholders and Old Mutual were derailing the process. READ HERE >>

Comment
There are two jobs I would hate in life. One serving craft beer to a bunch of bearded, corduroy wearing randomly tattooed men who are fans of The National (a US band). The other job would be a judicial manager of a distressed textile plant in Zimbabwe. They never seem to be able to sort issues out. They get caught up in endless time loop scenarios – ever seen Groundhog Day (it's a movie)? On the other hand ... there is always one person that get a cut in any liquidation ... and that if the court appointed judicial manager / liquidator!


SOUTH AFRICA - CHINA BANS SA ORIGIN GREASY WOOL, 18 February 2019
Australian woolgrowers are set to benefit from the suspension of wool exports from South Africa to China due to an outbreak of foot-and-mouth disease. The peak body of the South African wool industry, Cape Wools SA, has released a statement saying that the industry decided to postpone a wool auction due to China's customs department suspending "all greasy wool imports from South Africa as a result of the foot-and-mouth disease outbreak earlier in the year". READ HERE >>



ETHIOPIA / KENYA / RWANDA / SENEGAL – C&H GARMENTS SENEGAL, November 2018
The C&H Garment facility located in Senegal's Diamniadio industrial park (40km from the capital of Dakar) covers an area of about 7,500㎡ and has (26 November 2018) installed 26 production lines. They planned to have 16 of these lines operational by the end of 2018. When fully functional (by the end of 2019) the plant will have 1,000 workers. The C&H Senegal plant will specialise in the manufacture of T-shirts, coveralls and casual wear for the US market, fulfilling contracts for companies such as the Southpole brand. Senegal's proximity to the US market - seven hours away by air - makes it an attractive investment opportunity. Senegal also benefits from the US African Growth & Opportunity Act (AGOA) which provides trade preferences for quota and duty-free entry into the United States for certain goods, including textiles and apparel. READ HERE >>

Comment
My my ... the travels of C&H through Africa! It wo;d be good to get a more detailed overview of the company in its many locations. Best done by an independent academic ... certainly not by a curmudgeon blogger like me. At the moment it appears to be showered in glory and gloss because of one of its shareholders … the high flying "Ambassador" Helen Hai.

We often read variations on this theme: "Helen Hai is the United Nations Industrial Development Organisation (UNIDO) Goodwill Ambassador for industrialisation in Africa. She is the CEO of the "Made in Africa Initiative" which advises the governments of Ethiopia, Rwanda, and Senegal on industrialisation and investment promotion. Ambassador Hai is Co-Founder of C&H Garments, which is a pioneer Pan-Africa export-oriented garments manufacturer with a presence in Ethiopia, Kenya, Rwanda and Senegal. … Ambassador Hai was named a 2015 Global Young Leader by World Economic Forum and received the 2015 African Business Icon Award. She is on the committee of Global Commission on Business and Sustainable Development."
READ HERE >>

And then there is this … "[Ms Hai]… is a senior adviser on South-South cooperation for the International Finance Corporation (IFC) and works closely with the UK's Department for International Development (DFID), the World Bank, the Gates Foundation, the Tony Blair African Governance Initiative and other multilateral players involved in development issues in Africa." READ HERE >>

But I would like to know more about C&H's garment production.

Little is known about C&H's garment factory in Kenya. Where is(was) it located? Is it still producing garments? How many people does(did) it employ? What are(were) its markets? If its no longer part of the C&H stable why is this case? Who owns it now? Etc. I suspect if it was still owned by the C&H group, and it was employing loads of people, that we would be reading a lot more about it.

In about 2015 C&H opened a garment manufacturing facility in Ethiopia. C&H Ethiopia was(is) located in the Bole Lemi I industrial park. It was(is) a reasonably substantial factory with ambitions to employ about 1,500 people. But then, mysteriously, it was sold and bought by the massive Chinese conglomerate – Sumec. There are many questions: Did C&H Ethiopia ever reach its employment target? If not, why not? When was it sold? Why was it sold? Did the firm ever make a profit? What challenges did it encounter in Ethiopia? What did the buyers of its garments think about the company? Etc.

C&H also opened a garment plant in Rwanda in 2015. This is a sad tale. This firm was apparently selling garments into the US using AGOA trade preferences – but then the Rwanda government decided to impose a ban on the import of worn clothing. As this threatened US worn clothing exporters the US administration withdrew the country's AGOA status. Through no fault of the C&H it was left up a mucky creek without a paddle. Its understood that C&H Rwanda is now making clothes for the domestic Rwandan market place, and is selling garments into the EU. It is unknown if it is working anywhere near the capacity it was working at when it was exporting garments into the US.

For more on C&H and Ambassador Hai
READ HERE >> and READ HERE >>. For something academic on C&H Rwanda READ HERE >>.
SNIPPETS FROM AROUND THE WORLD

MCKINSEY'S GLOBAL APPAREL RETAIL MANUFACTURING TRENDS TO LOOK OUT FOR
Fashion companies have to wake up not only to the tougher economic environment but also to changing consumer trends and shifts in the fashion system. As trends indicate, new markets, new technologies, and shifting consumer needs present opportunities but also risks. McKinsey predicts that 2019 will be a year shaped by consumer shifts linked to technology, social causes, and trust issues alongside the potential disruption from geopolitical and macroeconomic events. According to them only those brands that accurately reflect the zeitgeist or have the courage to self-disrupt will emerge as winners. SEE >>.


EU's EXPLANATORY GUIDE ON THE RESTRICTION ON CMRs IN TEXTILES & CLOTHING
Restrictions under Regulation (EU) 2018/1513 to control certain carcinogenic, mutagenic or reprotoxic (CMR) category 1A or 1B substances in textiles and clothing will be effective after 1 November 2020. The guide provides lists of articles covered and not covered by the restriction, as well as available analytical methods for determining CMR substance levels. SEE >> and SEE >>.
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PROJECT NEWS

DEPARTMENT FOR INTERNATIONAL DEVELOPMENT (DFID)
ETHIOPIAN INVESTMENT ADVISORY FACILITY (EIAF)

(Project No. 204635)
Start Date: June 2015. End Date: June 2021
Total Project Value: £35 million
Main Contractor: McKinsey & Co
Launched in 2016, EIAF is helping the Government of Ethiopia (GoE) to make better decisions about how it invests public money to boost Ethiopian exports and create thousands of jobs for the country's largely rural, unskilled workforce in labour-intensive light manufacturing. This is important because GoE has one of the highest investment rates in the world as it channels enormous amounts of public money, often through state-owned enterprises (SOEs), into infrastructure to reduce the cost of manufacturing and exporting and attract foreign direct investment.

This project has multiple components that will impact on Ethiopia's textile and apparel manufacturing industry, including:
  • Trade logistics sector benefits from high-quality capacity technical advice and strengthened – advice mainly on reducing cost and time of imports and exports.
  • The energy sector benefits from high-quality technical advice and strengthened capacity – main advice related to reducing grid loss and outages.
  • Industrial parks sector benefit from high-quality technical assistance and strengthened capacity. This output has been re-focused to urbanisation issues that contribute to the success of industrial parks (IPs) - ensuring a supply of worker accommodation which meets International Labour Organisation standards and is, ideally, within walking distance (to avoid transport subsidies) of the Hawassa and Mekelle industrial parks.
SEE HERE >> for more on the project.

USAID'S EAST AFRICA TRADE & INVESTMENT HUB
ONE TRADE SHOW
7 DAYS LATER ORDERS VALUED AT US$10.27m CLAIMED

The USAID funded East Africa Trade & Investment Hub (EATIH – SEE>>) recently supported some East African firms to attend the 'Sourcing-at-Magic' and the 'FN-Platform' trade shows in Las Vegas, United States.

A mere 7 days after the show closed EATIH claimed in a newsletter that their attendance at the show provided firms from Ethiopia, Kenya and Madagascar with greater visibility, and had helped connect these firms with US buyers. EATIH initially stated that the firms had "made 193 business linkages for orders valued at US$20,078,000". A couple of days after this initial newsletter release the Trade Hub revised their initial claim (not via a correction newsletter – you had to pick up this correction by visiting their website!) – they now claim that firms had "made 191 business linkages for orders valued at US$10,275,000". READ HERE >>

The word "potential" did not appear between the word "for" and "orders valued at" - even in the corrected version!
EATIH PARTICIPATION IN THE
SOURCING-AT-MAGIC AND THE FN-PLATFORM TRADE SHOWS
Las Vegas, United States (4-7 February 2019)
How is it possible that so many orders – whether it be US$20m or US$10.3m - be claimed? It is rare that buyers and sellers – unless they already know each other – do deals as quickly as this. There is often the "getting to know you" phase; perhaps an in situ inspection of the manufacturing facility (quality, labour and environmental standards); financial due diligence investigations; the buyer understanding the freight logistics related to manufacturing inputs and the finished products; a time and action calender; an exchange of samples; price negotiation; etc.

So how does the EATIH come out with this figure? Well, I guess they feel it is something that USAID wants to hear; as may some of the staff in US missions within EATIH's scope of operation. Admittedly there is an enormous pressure on project implementers to prove the success of their interventions. Of course, it is possible that when the private sector managing contractor of a development project submitted a tender to run the project that they undertook that they would deliver US worth of new trade as a consequence the donor funds.

But how does a project ultimately come-up with "orders valued at US$10,275,000"?
I guess it could work like this: ...
... a walk-by trade visitor at a trade show is asked by an exhibitor or an EATIH staffer: Q: "what products are you looking for?" A: "golf shirts." Q: "what would your typical order volumes be?" A: "30,000 units!" Q: "what would be your typical prices be per unit delivered?" A: "US$5.50." Business cards and firm profiles are exchanged. Then the project claims they facilitated trade worth US$165,000 (30,000 units x US$5.50) ...
They then add all the implied business via the contacts made at a trade show.

The claim of US$10,275,000 demonstrates a complete lack of knowledge or understanding of the purchasing process of reputable and desirable buyers by a development organisation using donor funds.

In my view this approach gives development a bad name. The next time the principle donor hands out a tender, there will perhaps be a tendency for many bidders to exaggerate the value of the orders (and investment) that they will secure. Then the vicious cycle continues. Those projects which refuse to submit to this approach are written-off as not successful.
Of course, these EATIH claims can be investigated via an independent monitoring and evaluation (M&E) audit.

If I were to draw up a scope of work for an independent M&E activity on a development projects' participation in out-of-Africa textile/apparel/footwear/leather trade show I would suggest the following elements (all obviously in the context of the development project's contract of engagement, and their annual work plans):
  • I would request copies of what the project contractor publicly claimed was the output of each trade show attended.
  • I would also want to see the total costs of associated with their participation in each show including the costs of any consultants used.
  • I would examine their reports to the donor HQ to see what they claimed were the outputs (business connections and trade values) of attending each show and how they followed up on their participation after each show.
  • I would contact each enterprise that attended (or who were represented by the development project) each show, or whose attendance was facilitated/sponsored, and ask the following questions:
--- how much of your own funding did you spend in getting to the show?
--- as a consequence of your firm attending this show what was the US$ value of the orders that you actually received and then executed as a consequence of your participation in the show? What was the value of repeat orders?
--- if no orders originated why do you think this was the case?
did any of the potential/actual buyers ever visit your manufacturing facility?
--- in what ways did the development project assist you to prepare for the show?
--- after the trade show did the development project that facilitated your attendance at the show follow-up with you to support you to confirm order enquiries?

-------------------------------------------

and while we are discussing development organisations and trade shows ... some thoughts!

While I recognise that there may be some merits in attending some US and EU apparel trade shows – I think there may be limited opportunities for development projects continuing to send African producers to these shows. The ability of African producers to attend these shows generally only exists for as long as donor funds exist. In my experience once the donor project ends no more African based producers attend these shows using their own resources.

To me there are better ways in which development project resources could be allocated to increase the exposure of African textile and apparel producers to global markets.

Would there not be more value to be gained by development projects facilitating trips to select African private sector run trade shows for select US, Canadian, EU, etc buyers? Africa is now developing a number (perhaps too many) of sector trade shows – there is “Destination Africa” that runs out of Ethiopia; the “Africa Sourcing & Fashion Week” that is held in Addis Ababa; the "Origin Africa" show which is based in east Africa; and, then there is the "Source Africa" trade show that takes place in Cape Town. Should out-of-Africa buyers (from the US and the EU) be supported in coming to these shows by donors they would not only see exhibiting firms; but they could – if the development organisation arranged it – also be able to visit manufacturing plants. If development organisations do their jobs well and there is a buyer response its possible that once the development project ends that buyers would see the value in attending the trade show at their own cost; and they could be taken around to visit factories by parastatal institutions who job it is promote a country's exports.

Many of the newer textile/apparel/footwear value chain trade shows that now exist were effectively founded by donor resources - donors must now rethink before they develop or back any new trade shows. In my view there are now too many value chain trade shows in Africa - the creation of so many shows will result on some existing commercially run shows collapsing because they cannot compete with donor driven interventions!
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RESEARCH

"Cotton Certification in Ethiopia: Can an Increasing Demand for Certified Textiles Create a ‘Fashion Revolution'?" L. Partzsch & L. Kemper. University of Freiburg, Sustainability Governance. Freiburg, Germany. November 2018.
Synopsis: Ethiopia is witnessing a cotton revival. Voluntary certification programs, such as the Global Organic Textile Standard (GOTS) and Cotton made in Africa (CmiA), promise to ensure the sustainability of this development. When advertising certification, companies call upon consumers to ‘join the fashion revolution' and overcome grievances of ‘dirty fashion'. We are interested in the types of relations through which certification initiatives can facilitate a transition to greater sustainability. So far, scholars have shown that sustainability certification emerges from a neoliberal agenda and therefore reproduces asymmetries. Complementing these studies, we make a strong claim for acknowledging the capacity of agency or agents in the debate about power in certification. For this purpose, we use concepts of power to (empowerment and resistance) and power with (cooperation and learning) to explore the two cases of GOTS and CmiA. Both concepts represent different forms of exercising power and bringing about change. We find that GOTS offers consumers the opportunity to alter their position. They have the power to establish an alternative (niche) system of ethical trade. By contrast, CmiA represents power with conventional producers, retailers and consumers. This certification initiative can be considered less radical, but it hasa much better market outreach. While we argue that only certification that demands the creation of alternative market structures can be a starting point for a ‘revolutionary' transition, we also see a need for the conventional industry to change in countries such as Ethiopia. The full report can be found HERE >>.


"Assessment of Workers' Satisfaction and HR Structure of Factories in the Hawassa Industrial Park". Sustainability Agents SUSA GmbH. October 2017.
Synopsis: In the last decade, the Ethiopian economy has been one of the most thriving in the world, with an average of 10.8% growth per year. One of the most important reasons for this impressive double-digit economic growth has been the government-led development and expansion of the textile industry. As part of its development strategy, the Ethiopian government has been actively promoting the textile and garment industry. They have done this by implementing sector development plans and offering incentive schemes to foreign investors, which has made Ethiopia an attractive country for apparel companies who face constant pressure to keep up with competitive pricing. A result of these development efforts is the recently inaugurated Hawassa Industrial Park (HIP) –the biggest eco-industrial Park in the country that has already attracted significant foreign investment and has been operating since 2016. The positive development of the textile and garment manufacturing industry in Ethiopia, however, has not been without any challenges. Despite the implementation of best practices and lessons learned from other Industrial Parks in the country, foreign investors currently operating in the HIP have already reported several challenges, including high rates of tardiness and absenteeism, high turnover rates and dissatisfaction among their workers.

To better understand these challenges, the potential reasons behind them, Enterprise Partners (EP) commissioned Sustainability Agents SUSA GmbH to carry out a study on workers' satisfaction from 19 July to 5 August 2017. The main purposes of the study were: i) To identify the main causes behind the workforce-related challenges currently faced by the factories in the Hawassa Industrial Park ii) To understand how those challenges, impact the factories' operations and production, iii) Based on the results of the study, design specific interventions in the area of HR in order to address such challenges. The full report can be found HERE >>
UPCOMING EVENTS
  • Morocco Fashion & Textile - Trade Show - 28-31 March 2019. Casablanca, Morocco. For more information: www.moroccostyle.net
  • Intertex Tunisia - Trade Show - 4-6 April 2019. Tunis, Tunisia. For more information: www.intertextunisia.com
  • 8th International Sustainable Industrial Areas - Conference - 8-10 April 2019. Addis Ababa, Ethiopia. For more information: www.siaconference.com
  • Source Africa - Trade Show - 12-14 June 2019. Cape Town, South Africa. For more information: www.sourceafrica.co.za
  • Premiertex Africa 2019 - Trade Show - 18-20 June 2019. Nairobi, Kenya. For more information: www.premiertex-africa.com
  • Destination Africa - Trade Show - 9-11 November 2019. Cairo, Egypt. For more information: www.destination-africa.org
  • Africa Sourcing & Fashion Week (ASFW) - Trade Show - 9-12 November 2019. Addis Ababa, Ethiopia. For more information: www.asfw-online.com
  • International Textile Machinery Exhibition - Africa - Trade Show - 14-16 February 2020. Addis Ababa, Ethiopia. For more information: www.itme-africa.com
EDITOR COMMENT!
OH THIS IS GONNA BE INTERESTING - TWO MAINLINE AFRICAN TEXTILE & APPAREL SOURCING EVENTS HELD AT THE SAME TIME ... THE ASFW AND THE DESTINATION AFRICA TRADE SHOWS ! SOMEONE IS GONNA BLINCK AND CHANGE THE DATES ... WHO
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about Mark Bennett - Editor

"The African Cotton, Textiles & Apparel Monitor"
I have almost 30 years' experience working in Africa's cotton, textiles and apparel value chain. Initially I was, for 15 years, a sector trade unionist in South Africa; then, from 2004 onwards, I worked as a development consultant for various Southern / Eastern African governments, and domestic private sectors. In my development activities I have been engaged by private sector foundations, and by DFID and USAID funded contractors. I find it rewarding creating development interventions that help cotton, textiles and apparel stakeholders to better processes, improve productivity, increase sales and add investment. See my full CV at Devex or LinkedIn.
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