*|MC:SUBJECT|*
VALUE CHAIN NEWS FROM THE AFRICAN CONTINENT - EVERY TUESDAY
This newsletter contains links to content located on external websites. 
Over time it is likely that some of the links to this content may be broken. 
You are advised to download material of interest as soon as possible.
LOGO OF THE
NEWS & RESEARCH FROM THE AFRICAN CONTINENT
(#13 / 2019  -  21 May 2019)
www.africantextilesandapparel.com
Ethiopian Government Considers Minimum Wage Mechanisms
South Africa's EDCON Restructuring Continues
How Sustainable is the Cotton in your Garments
NEWS

ETHIOPIA – STUDY PINPOINTS LOW PAY AS MAJOR PROBLEM,  7 May 2019
Ethiopia should gradually increase base wages for workers in its nascent clothing-making industry and address ethnic unrest in a region housing its flagship industrial park, according to a study by New York University.  The entry-level pay for those producing for retailers including H&M and PVH at Hawassa Industrial Park is ETB750 (US$26) a month, according to the report by the Stern School of Business' Center for Business and Human Rights.  The annual wages are 40% below the average Ethiopian per capita income of US$783, according to the study.  READ HERE >>

 
FURTHER DETAILS OF THE STERN SCHOOL OF BUSINESS STUDY CAN BE SEEN IN THE RESEARCH SECTION NEWSLETTER (BELOW)

Comment
In interviews with the "Apparel Insider" (SEE >> - subscription required) magazine PVH claimed that many of the issues raised by NYU Stern are out of date and had already been addressed ... and that they hoped, in the future, that all their workers would be paid a "living wage"; Walmart said they are looking into the issues raised; while H&M stated "we have not and do not intend to move production capacity from other markets to Ethiopia in a ‘race to the bottom'".

This is the third report since the beginning of 2019 that has focussed on the wages and the working conditions of Ethiopian textile and garment workers.  These reports have been covered in previous editions of this blog / newsletters, see:
  • Wage Indicator Foundation Data Research  (SEE >>)
  • Worker Rights Consortium  (SEE >)
I predict more exposé will be developed – they will come from activist organisations (for example, the Clean Clothes Campaign and its affiliates).  And they will also come from academics - and not from "friendly" academics.

I wonder how the Ethiopian Government, the value chain manufacturers that are located in the country, and the global apparel brands and retailers that buy goods from the country will respond to sustained negative exposure!

It's possible that the Ethiopian Government will plough money into many lobby organisations in the US and the EU in order to polish its image.  In this context it's likely that the country will also engage publications to write more positive stories about Ethiopian garment sourcing opportunities; while some textile and apparel news agglomerator publications will be discouraged from carrying any negative news (I suspect that this is already happening).  Apparel brands and retailers will no doubt get the many organisations, that generally try to support better working conditions and understand the issue of living wages, that they fund funnel money into to give a more positive impression.

A mini-report, generally supportive of parts of the NYU Stern report,  but critical of some aspects of it - can be READ HERE >>.


ETHIOPIA – STATE REGULATED MINIMUM WAGES,  13 May 2019
Although some public sector institutions and enterprises have set their own minimum wages, there is no consistent minimum wage in Ethiopia.  In response to this situation, the Ethiopian Ministry of Labour & Social Affairs drafted a labour proclamation to establish a Commission to set a minimum wage.  The proclamation will not set a minimum wage but rather establish a commission that will set a base wage across time depending on the economy, cost of living and other factors to avoid the hassle of revising the proclamation repeatedly. READ HERE >>

Comment
Let's take some bets:
  1. a minimum wage for the textile and apparel industry will not be set within the next year.  The Commission will of course have to commission a wide range of (donor funded) research first.
  2. the level of Ethiopian minimum wages that will eventually be set will be so low that they will be meaningless for workers.  I predict that they will be set so low that one will see many investors continuing to establish textile and apparel manufacturing operations in Ethiopia.  Sub-bet: once a minimum wage has been set the industry will still be plagued by wild cat strikes, by low productivity, and significant ongoing workforce turn-over.
  3. once set the value chain manufacturers that are located in Ethiopia, and the global apparel brands and retailers that buy from them, will say that they are complying with all the labour laws of the Government of Ethiopia – including that of statutory minimum wages.  Indeed, I also bet that many of these stakeholders will start to deflect criticism of their conditions of employment by stating that their manufacturing facilities are regularly inspected by the ILO's Better Work programme.
  4. that IndustriAll will continue to put in virtually meaningless trade union affiliate capacity building programmes.  Such programmes will mainly be premised upon occasional seminars and the odd long-term in-house capacity person that will not build the organisational capacity of its Ethiopian textile and apparel affiliate.  I also bet it will be only be a matter of time before IndustriAll proclaims that some of its global framework agreements are delivering for Ethiopian workers.
  5. that the Action-Collaboration-Transformation (ACT – SEE >>) initiative will make little, if any impact, upon the level of textile and garment worker wages in Ethiopia.  ACT is a programme - premised on establishing living wages through sectorally based centralised bargaining processes -  being punted by many apparel brands / retailers that buy garments from Ethiopia, and by IndustriAll.  Sub-bet: will any of ACT's initiatives to improve minimum wages have any success in the next 24 months in its focus countries of Cambodia, Myanmar and Turkey?  I do not think so!
  6. many donor development organisations (and their implementing contractors) that are supporting the development of the Ethiopian cotton, textiles and garment value chain (especially the World Bank, the European Union, DFID (British), GIZ (German), and USAID (American)) will not say anything critical about the negative labour market aspects of the Ethiopian cotton, textile and apparel development path currently being pursued
  7. and finally … that sooner or later environmental non-governmental organisations will start to unpick some of the good stories of Ethiopia's eco-industrial parks revolution.
PVH's WORKER ORIENTATED
CORPORATE SOCIAL RESPONSIBILITY AMBITIONS
GETTING THE CORPORATE SEMANTICS RIGHT!

The on 13 May 2019 the 2018 PVH "Corporate Social Responsibility" report was been released (SEE HERE >>).  The company sets itself some targets.

PVH proclaims: "Fashion has the power to be a positive force in the world.  So, when we identify areas where we can make an impact for our people and planet, we won’t stop at halfway.  Our ambition is for 100% of our products and packaging to be ethically and sustainably sourced, and for 100% of our suppliers to respect human rights and be good employers."

The PVH worker orientated priority ambitions are:
"Priority: Amplify Worker Voice – Improve working environments through worker engagement and representation.  Key Target: 100% of workers employed by key suppliers will have their voices heard through democratically elected representatives by 2025."
Comment:  So its only workers employed by "key suppliers" - whose selection will be selected by PVH - what a disengenuous formulation!  And why wait until 2025?


"Priority: Promote Safe Workplaces – Ensure safe and healthy workplaces for all workers in our supply chain.  Key Target: 100% of our suppliers will promote and maintain safe and healthy work environments by 2025."
Comment:  So does this mean that unsafe and unhealthy workplaces will tolerated until the end of 2024?

"Priority: Advance Living Wages – Create conditions for national living wage agreements through industry-wide collective bargaining linked to our purchasing practices.  Key Target: 100% of our key suppliers in two key production countries by 2025 and four by 2030 proactively support industry-wide collective bargaining to achieve living wages."
Comment:  I wonder into which category Ethiopia falls - the 2025 category or the 2030 category?  Note this does not comit PVH manufactruing vendors to pay a living wage - but just create the conditions that would allow for a sectoral living wage to be negotiated.  PVH are not making the mistake that H&M did when it proclaimed in its 2013 “Roadmap Towards a Fair Living Wage" that its "strategic suppliers should have pay structures in place to pay a fair living wage by 2018".

"Priority: Recruit Ethically – Partner with our suppliers to ensure ethical recruitment practices for migrant workers.  Key Target: 100% of migrant workers at our Level 1 and key Level 2 suppliers will not pay recruitment fees by 2025."
Comment:  ... and I assume that the PVH "get out of jail free card" will be determined by how they categorise who is a "key" supplier and who is not.  I also wonder if this provision will also apply to the recruitment of that category of staff considered to be management.
Source: PVH Factory List (31 December 2018) - SEE HERE >>

Note
PVH no longer has any accredited manufacturing vendors in Lesotho.  Did the September 2018 increase to Lesotho's minimum wages make production in the country unviable?  Or was the production in the country's Ever Unison plant taken over by the New Wide group's factories located in Kenya - the New Wide group is a major H&M supplier?

For the first 
time PVH now lists the number of employees per accredited manufactuing supplier.

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

RWANDA – NEW GARMENT FACTORY,  11 May 2019
The Rwanda Development Board (RDB) has signed an agreement with Pink Mango C&D, a Chinese firm, to establish a garment factory in Kigali, Rwanda.  The factory that will be located in the Kigali Special Economic Zone will produce garments for both the domestic and export market.  The Chinese firm is expected to provide 7,500 jobs for Rwandans by its fifth year of operation and create cumulative export earnings of US$20m over the next five years.  READ HERE >>


ETHIOPIA – NEW GARMENT FACTORY,  13 May 2019
KPR Mill Ltd (SEE >>), an integrated textile manufacturing company from India, opened its first overseas garment unit, in Ethiopia's Mekelle Industrial Park.  The garment factory will have a capacity of 10 million items each year.  So far, employment has been created for 700 people, and export shipments have commenced to Europe and the US.  The opening of the factory is the result of a collaborative partnership with the International Trade Centre's (ITC) Supporting Indian Trade & Investment for Africa programme (SITA), which works to build trade and investment linkages between India and East Africa.  READ HERE >>


UGANDA - NEW INTEGRATED TEXTILE & APPAREL PLANT,  7 May 2019
A new vertically integrated spin, weave/knit fabric, garment plant will be established in Uganda.  Apparently Shree Modern textiles will develop 46,000 square metres of building, install 30,000 spindles, and include a sewing floor with 1,000 machines.  The envisaged total investment will be worth about US$45m.  It will produce garments for the domestic and export markets.


KENYA - NEW GARMENT FACTORY,  5 May 2019
Mas Holdings (SEE >>), a Sri Lankan apparel and textile manufacturer, says it will create job opportunities for 3,100 Kenyans once it starts operation in Athi River (near to Nairobi).  With an investment of KSh1.5bn (US$14.8m), Mas Holdings leapfrogs Hela Clothing as the largest apparel and textile manufacturer in the country.  Hela employs 1,500 workers.  Mas Holdings will export apparel products to the US, United Kingdom, and the Netherlands.  READ HERE >>


ETHIOPIA  - POTENTIAL WORK STAYAWAY THREATENS HAWASSA INDUSTRIAL PARK ACTIVITIES,  May 2019
The militant Sidama youth group (locally known as the "Ejjeto") who are demanding greater political autonomy for the Sidama zone in the Southern Nations, Nationalities, and People's Region (SNNPR), are apparently threatening a longish general strike / stayaway in June 2019 if their demands for a statehood referendum are not met.  Other Sidama groups have stated that they may unilaterally declare independence by July 2019.  READ HERE >>  Subsequently, the SNNPR's Welaytas ethnic group have also released a statement calling for greater autonomy and self-rule.  READ HERE >>

Comment
Things do not look good for the tenants of Ethiopia's flagship Hawassa Industrial Park - as it lies in the capital (the city of Hawassa) of the SNNPR.  Its difficult to see how the park factory owners and their workers will be able to exclude themselves off from these extra-parliamentary political protests.  Many industrialists may want to call on the federal government for security protection - this in-turn could result in the military being brought in; and, perhaps even select geographic area states of emergency.  Both of these responses will impact upon production and could excerbate tensions further.  As a South African trade unionist working in the late 1980s and early 1990s I was fully exposed to the damage that extra-parliamentary politics could have on production - the battles between ANC and Inkatha supporters were especially vicious.


ETHIOPIA – ELECTRICITY RATIONING,  18 May 2019
Ethiopia has started to ration electricity for domestic and industrial customers after a drop in water levels in hydroelectric dams led to a production deficit.  Ethiopia's Minister for Water & Electricity said that the decline in water levels at the country's Gibe 3 dam led to a deficit of 476 megawatts (MW), more than a third of the country's electricity generation of 1,400MW.  READ HERE >>

Comment
Not good for garment and textile manufacturers.  However even if the Grand Renaissance Dam was complete – Ethiopian firms would still have problems with the supply of relyable power – as much of the distribution system is archaic and in desperate need of repair and maintenance.


SOUTH AFRICA – WOOLWORTHS APPOINTS NEW BOARD MEMBER,  9 May 2019
The Woolworth's board has announced the appointment of Belinda Earl as an independent non-executive director of WHL with effect from 1 July 2019.  She has over 30 years' experience in fashion, general merchandise and design.  Her executive career included roles at Marks & Spencer with the most recent being Style Director.  She was the CEO of Jaeger, a premium British fashion brand until 2011, and CEO of the department store group Debenhams Plc from 2000 to 2003.  She joined the Board of Debenhams 1999 after a career of fifteen years in the group.  Over that time, she held roles in buying and merchandising and as Trading Director with accountability for various business segments.  She started her career as a graduate trainee at Harrods and held her first management position was there.  READ HERE >>

Comment
This appointment must be driven by the poor performance of the existing Woolworths executive and senior management related to its purchases of women's clothing.  The purchasing decisions of these staff have significantly dented this retailer's profits.  See the "African Cotton, Textiles & Apparel Monitor" for coverage of Woolworths' women's garment purchases. HERE >> and HERE >>.  This appointment must be costing Woolworth's shareholders a lot – but I guess Woolworths senior management will do anything to try to fix its women's fashion retailing operations.  That it could not find anyone local to do this job says a lot about the state of senior management and executives in South Africa's apparel retail industry.


SOUTH AFRICA – COMPETITION AUTHORITY APPROVES EDCON RESTRUCTURING,  9 May 2019
The Competition Tribunal has approved the large merger whereby a new company, registered as "K2019216440 (South Africa) Limited", will purchase the entire issued shares of Edgars Consolidated Stores Limited (ECSL).  The EDCON Group (ECSL, Edcon Limited and all their subsidiaries) is in financial distress and at risk of being forced into business rescue or insolvency proceedings.  The merger is intended to achieve a restructuring and recapitalisation of the debt and equity structure of EDCON Limited.  This, to provide a stable platform for the planned turnaround of the EDCON Group.

The merger was approved with conditions, including that Edgars commits, for a period of five years, to foster and develop a more competitive production environment in South Africa through:  i) continuation of the Import Replacement Programme which entails expanding procurement from South African suppliers (including small, medium and large enterprises);  ii) building relationships with South African suppliers of products for resale in Edgars stores to inter mitigate the risk of exchange rate fluctuation, secure faster supply chain turnaround and cater for local consumer preferences; and,  iii) participation in initiatives by inter alia Government, the Industrial Development Corporation (IDC) and NGOs (Editor – I assume the Southern African Clothing & Textile Worker's Union SACTWU)) aimed at improving capacity and competitiveness and to create jobs in the textile and apparel industry value chains in South Africa.

On employment Edgars committed, subject to external circumstances (such as prevailing macro and microeconomic conditions and trading conditions) and internal circumstances (such as the state of the EDCON Group's financial position and operating performance), that it would use its best endeavours to implement measures aimed at avoiding involuntary retrenchments, particularly amongst non-management related store staff, including offering employees of stores that are closed down equivalent positions in alternate stores. READ HERE >> and the Competition Tribunal's Order and Merger Clearance certificate can be  READ HERE >>

EDCON CEO said that the group would use the R2.7bn (US$18.8m) lifeline it received from lenders, landlords and the Public Investment Corporation (PIC) to restructure its business model in order to its competitiveness.  Pattison said the restructuring would include the resizing of some of its units into operations that worked better.  “We have committed to an Edgars as a department store where big stores work better than small stores,” the CEO told analysts and suppliers. “We will have fewer bigger Edgars stores.  In terms of Jet the small stores and medium stores work better than  big stores.  We will have more medium size Jet stores and less stores over all.”  READ HERE >>

In another report on the same meeting the EDCON CEO claimed that a major chunk of the costs involved in the restructuring deal that saved EDCON went on strategy consultants.  He estimated that that consultants received about R1bn (US$70m) over three years.  He said they always descended in droves when a company was in trouble.  Getting rid of them was "the biggest cost saving in one fell swoop" that EDCON made - putting the amount saved at about £1.5m (R27m) a month.  "These guys were all employed from the overseas offices [of Bain Consultants and PwC]."  As part of the current recapitalisation of the group there was the cost of advisers, working on behalf of banks, but paid for by the company.  He estimated that by the time the rescue deal is final, advisers and legal fees would have cost R350m (US$24.4m) to R400m (US$27.8m).  READ HERE >> (subscription required)

Comment
Its interesting that EDCON has been asked to buy locally - this must give many of its competitors (including Woolworths, Truworths, Foschini, Mr Price, Pepkor) who have no such restrictions a significant competitive edge.


SOUTH AFRICA – CONSTITUTIONAL COURTS SIDES WITH EDCON OVER RETRENCHMENT OF 1,818 WORKERS,  2 May 2019
The Constitutional Court has dismissed an appeal by 1,818 retrenched employees of retailer EDCON.  This was despite the court granting the applicants leave to appeal a prior Labour Appeal Court ruling, which refused them condonation for the late launching of an application in terms of the Labour Relations Act challenging the procedural fairness of their retrenchment and asking for compensation.  READ HERE >>


SOUTH AFRICA – NEW CLOTHING FACTORY LAUNCHED,  29 April 2019
South Africa's KwaZulu Natal's (KZN) province's efforts to boost its once flourishing textiles industry has been given a shot in the arm with the official opening of the UMsinga clothing factory in Msinga.  The female-owned firm was established with funding was obtained from the KZN Department of Economic Development, Tourism & Environmental Affairs' Women Economic Empowerment Programme.  The province allocated an amount of R4m (US$278k); at the time of opening it employed 137 people; and it is making school uniforms and sanitary pads.  The provincial Minister for Economic Development, Tourism & Environmental Affairs officially launched the plant and handed over "dozens of sewing machines" during the launch.  READ HERE >> (note this is a state mouthpiece) and  HERE >>

Comment
The launch of the factory took place ten days before the South African General Election of 8 May 2019!  In the months preceding the general election, the provincial Minister (who has aspirations to become a provincial premier) was directly involved in the rescue of a major towelling plant and the establishment of a new apparel factory.


ETHIOPIA - HAWASSA DRYPORT PLAN SHELVED,  11 May 2019
Lack of budget funding has forced the state shipping enterprise to hold off its planned construction of a dry port facility near Hawassa Industrial Park, the nation's flagship park.  The Ethiopian Shipping & Logistics Service Enterprise cancelled the tender announced at the end of April to construct the port, which was to be located 220Km from the capital.  A feasibility study conducted by the Enterprise two years ago estimated the construction of the facility along with equipping it with necessary machinery would cost ETB117.5m  (US$4m).  READ HERE >>


UGANDA – CONSULTANCY FIRM APPOINTED TO RESTRUCTURE TEXTILE-APPAREL SECTOR,  14 May 2019
After low relative earnings posted by it's cotton and textiles sector, Msingi East Africa – a Nairobi-based industry transformation consultancy (SEE >>) – has enlisted the services of Irish consultancy Bradan Consulting Services to help restructure the country's cotton textile export strategy.  Senior executives at Bradan have already begun their process of evaluating the sector.  READ HERE >>


SOUTH AFRICA – WOOL EXPORTS TO CHINA RESUME,  8 May 2019
The South Africa-China wool trade story is back in the headlines, but this time around in a good way.  Nearly two months since the Chinese authorities temporarily suspended wool imports from South Africa because of the foot-and-mouth disease outbreak earlier in the year, the country's authorities issued a notification on 8 May 2019 stating that the ban will be lifted that same day.  READ HERE >>


LESOTHO – PEASANT WOOL FARMERS FLEECED?  3 May 2018
Lesotho's Wool Centre is selling Lesotho's mohair to a South African company at ridiculously low prices in a secret deal that has the Government's blessings.  Documents seen by "The Post" newspaper reveal that Stucken & Company (SEE >>), South Africa's biggest mohair company, has been buying Lesotho's mohair for "dirt cheap" prices of between M60 (US$4.16) and M118 (US$8.18) per kg.  Figures indicate that Stucken is paying between M280 (US$19.40) and M500 (US$34.64) for a kilogram of mohair at auction floors in South Africa.  An investigation has also revealed that the Lesotho Wool Centre sold the mohair belonging to the farmers without an auction, the same system he promised to use when the Government granted him what is so far the country's only wool and mohair brokering licence.  READ HERE >>


TOGO - NEW GARMENT FACTORY,  26 April 2019
Togo will have a military clothing and equipment factory.  The foundation stone for the facility was laid by Togo President.  Located in Adétikopé (15km north of Lomé), the facility will be built by Canadian firm Logistik Unicorps, which makes and supplies military and industrial clothing and equipment and is active in Australia, Europe and the Middle-East.  Sources indicate that the plant will cost more than US$10m to develop.  READ HERE >>


MAURITIUS – WORKSHOP ON SUSTAINABILITY FOR THE TEXTILE & APPAREL SECTOR,  19 April 2019
The manufacturing, textile and apparel sector has supported the economic upheaval of several families in Mauritius, and it is undeniable that the industry is facing several challenges today, both internally and externally.  Mauritius is also threatened by increased competition from countries such as Bangladesh, Vietnam and other East-Asian economies which still have the boon of cheap labour to produce their goods at prices which are much lower than what Mauritius can.  To address the challenges in the textile and apparel industry, the Economic Development Board organised a two-day workshop.  The workshop has as objective to consult stakeholders and obtain proposals in view of defining sustainable roadmaps for the Textile and Apparel Industry to ensure their long-run survival and improve their contributions to the national income of Mauritius.  READ HERE>>


ZAMBIA – COTTON OUTPUT TO FALL,  9 May 2019
Production of seed cotton is forecast to reduce by 17.8% to 72,508 tonnes from 88,219 tonnes last season.  READ HERE >>


NIGERIA - APPROVES TWO GMO COTTON VARIETIES TO INCREASE OUTPUT,  9 May 2019
Nigeria has approved two genetically modified varieties of cotton for use by the nation's farmers to help boost supply to its textile industry and cut lint imports of as much as NGN115bn (US$319m) a year.  According to the assistant director at the Abuja-based National Biotechnology Development Agency, the seed strains were modified by the Institute of Agricultural Research at the Ahmadu Bello University in the northern city of Zaria in collaboration with privately owned Mayco Nigeria to include a gene that makes it pest resistant. READ HERE >>


ZIMBABWE - COTTON,  13-19 May 2019
With declining numbers of people growing cotton, a key foreign currency earner for the nation, a local company has unveiled a new cotton variety, which has the potential of doubling yields relative to current seed varieties.  Southern Cotton, which is wholly owned by Zimbabweans and runs two ginneries in Shamva and Sanyati, says it has unveiled the "May 505" and "May 344" varieties of cotton seed.  "The two varieties can produce between 5,000 and 6,000 kg of cotton per every hectare, compared to the 1,500kg to 2,000kgs that current seed varieties produce said the company's operations manager.  READ HERE >>

COTTCO (SEE >>) is set to introduce a new seed variety as it seeks to ramp up production from 140,000 tonnes to 504,000 tonnes per year and generate US$2bn in revenue from next year, the Deputy Minister of Lands, Agriculture, Climate & Rural Resettlement said.  The development comes as farmers are preparing for the start of the 2019 selling season following the recent announcement of a new producer price of RTGS$1,95 by the Government.  READ HERE >>

COTTCO intends to start developing their own commercial farms, targeting at least 100,000 hectares across the country to anchor production and support cotton value chains.  READ HERE >>

The 2018 cotton marketing season is expected to begin in late May 2019 with farmers and authorities finalising payment modalities, a farmer representative body has said.  At a recent meeting, farmers and the authorities provisionally agreed growers would be paid cash amounting to US$10 and RTGS dollars 150, while the remainder will be transferred in mobile or bank accounts for at least 200kg delivered, Cotton Producers & Marketers Association chairman said.  Farmers will be paid US$5 and RTGS dollars 150 for a delivery of between 150kg and 199kg while the remainder will be deposited into mobile or bank accounts.  For a delivery of less than 150kg, the farmers will be paid cash of RTGS dollars 150.  The Government pegged the price of cotton at RTGS dollars 1,95 per kg for this season, up from 47c last marketing season.  READ HERE >>


MOROCCO – NEW TEXTILE FACTORIES OPEN,  6 May 2019
The group Vita Couture – Diprints has opened two new textile factories in Tangier, Morocco, valued at MAD220m (US$22.7m).  Vita Couture will produce ready-to-wear clothing, across 20 production lines.  It will employ up to 2,200 people; while Diprints, will specialise in digital fabric printing – it is a joint venture with Spanish textile company Santandarina.  READ HERE >>


KENYA – EPZ SALES,  6 May 2019
Kenya's Export Processing Zone-based (EPZ) companies raked in KSh77.2bn (US$763m) in sales last year, being a 14.7% growth compared to KSh67.3bn (US$662.7) realised in 2017.  Newly released official data shows that exports, which formed the bulk of trading, rose by 19% from KSh60.7bn (US$600.4m) in 2017 to KSh72.3bn (US$715m) mainly attributed to market access to the European Union and the US (in the latter's case apparel exports in terms of the African Growth & Opportunity Act (AGOA) trade preferences).  READ HERE >>


KENYA – WORN CLOTHING IMPORTS SURGE,  6 May 2019
Kenyan second-hand cloth sellers (mitumba) imported clothes worth KEs16.9bn (US$167m) 2018, a 30% spike from 2018.  Stats by the Kenya National Bureau of Statistics showed that in 2018, Kenyans imported 177,160 tonnes of mitumba, the highest in a period of five years.  READ HERE >>


LESOTHO – STRIKING WORKERS DISMISSED,  23 April 2019
Jonsson Manufacturing (SEE >>), a workwear factory in Maputsoe, has with immediate effect terminated employment for about 700 of its workers for recently engaging in an "unlawful strike".  This comes after a two-day strike where hundreds of the company's workers downed tools and picketed on the streets to demand better working conditions from their employers.  READ HERE >>


TANZANIA – COTTON SECTOR DEVELOPMENT,  30 April 2019
The Tanzania Government wants to eliminate sub-standard cotton inputs in order to maximise the output of the sector.  Apparently, the sector has been awash with substandard cotton pesticides and the Government has ordered the Tropical Pesticides Research Institute (TPRI) to intervene.  READ HERE >>

Tanzania Cotton Board have passed 15 resolutions, including allocating 20% of the crop levy from the current 10%, that will stimulate the development of the sub-sector.  The resolutions, among other things, target yield improvement.  A cotton inspection officer at the TCB said that among the resolutions were ones targeting to increase irrigation schemes, to ensure the availability of quality cotton seeds, and improving extension services.  READ HERE >>


GHANA – LOCAL FIRMS WANT TO SUPPLY SCHOOL UNIFORMS, 30 April 2019
The local textile manufacturing companies in the country are asking the Ghana Education Service, to give the domestic industry the opportunity to supply the new Junior High School uniforms.  READ HERE >>


GHANA - COTTON,  30 April - 11 May 2019
RMG Ghana, an agro-input company, is to invest US$10m in the country's cotton industry under a five-year project.  The investment will cover the supply of inputs to farmers, operational costs and marketing.  READ HERE >>

Seed and input cost for the cultivation of cotton for the year 2019/2020 crop season has been fixed at a meeting with government representatives and cotton farmers and companies in Tamale, the Northern Regional capital.  The price of seed cotton grade A, has been pegged at GH₵2.2 per kg whilst grade B seed cotton will be supplied for GH₵1.76 per kg.  The input cost would also stand at GH₵351.00 while repayment in kilograms was fixed at GH₵159.5, according to a memorandum dated 9 May 2019 and signed by Wienco Cotton Operational Manager.  READ HERE >>


BURKINA FASO – COTTON PRODUCTION PLUMMETS, 26 April 2019 Cotton production in Burkina Faso is continuing its downward slide three years after the nation phased out the use of pest-resistant genetically modified cotton.  Last April, the Inter-Professional Cotton Association of Burkina, an industry body comprising farmers and other sector players, set a production target of 800,000 tonnes for the 2018-19 cotton season.  However, the country produced just 436,000 tonnes — despite offering farmers a record US$27.4m in incentives in the form of subsidies on insecticides, fertilisers and irrigation facilities.  Burkina Faso, previously Africa's largest cotton producer, is now fourth, trailing Côte d'Ivoire (455,000 tonnes), Mali (653,000 tonnes) and Benin (675,000 tonnes).  The 436,000 tonnes of cotton produced represented a decline of 29% from the 2017-18 output of 613,000 tonnes, which was down from the 2016-17 season output of 682,940 tonnes.  The decline in production has been consistent over the last three years, much to the worry of industry players.  READ HERE >>


KENYA – BT COTTON,  24 April 2019
During a dialogue on biotech crops and the Big Four agenda at the University of Nairobi critics of biotechnology misrepresented the facts about Bt cotton farming in Burkina Faso.  The truth of the matter is that cotton production in Burkina Faso is continuing its downward slide three years after the country phased out the use of pest-resistant genetically modified cotton.  Last April, the Inter-professional Cotton Association of Burkina (AICB), an industry body comprising farmers and other sector players, set a production target of 800,000 tonnes for the 2018-19 cotton season.  However, the country produced just 436,000 tonnes — despite offering farmers a record US$27.4m in incentives in the form of subsidies on insecticides, fertilisers and irrigation facilities.  READ HERE >>


MALAWI – COTTON PRODUCTION DISAPPOINTS,  23 April 2019
The Executive Director of the Cotton Council of Malawi (CCM) says that Malawi is capable of producing 100,000 tonnes of, but it is failing to achieve that despite a number of interventions to cotton farmers to produced more.  He said the country would produce 24,000 tonnes this season which is an increase of 9,000 tonnes from last year's production.  He pointed out that the sector faced a number of challenges, including the crop being affected by a pesticide called "Jassids", and high moisture levels due to heavy rains the country experienced.   READ HERE >>


NIGERIA – CENTRAL BANK TO REVIVE 50 TEXTILE FIRMS,  9 May 2019
The Central Bank of Nigeria is targeting to revive at least 20 textile companies before the end of the 2019 fiscal period.  The move is contained in the technical cooperation proposal for revamping the cotton, garment and textile sector in Nigeria.  The committee, according to the proposal, is saddled with the responsibility to resuscitate at least 50 textile firms by the end of 2023.  The committee is also expected to collaborate with stakeholders to identify, name and shame textile smugglers in Nigeria as well as develop a framework for the eradication of smuggling and dumping of textile products into Nigeria.  The committee would also facilitate the production of 200,000 hectares of cotton fields by 2020 and maintain an annual increase of 100,000 hectares over the next three years.  Other tasks of the committee include to determine power requirements by the textile hubs in each state; develop a framework for the production, transmission and pricing of power within the hub; and facilitate collaboration among all related agencies to ensure compliance with regulations.  READ HERE >>


EGYPT - STATE BUYS TEXTILE MACHINERY,  17 April 2019
Egypt's Minister of Public Enterprises has stated that contracts will be signed for the supply of new equipment to spinning and weaving companies valued at EGP10.5bn (US$616m). The Minister revealed that the development plan of the sector costs EGP21bn (US$1.2bn), clarifying that new machines will arrive in Egypt during 2020, followed by another shipment ten months later.  READ HERE >>


EGYPT – GOVERNMENT DENIES SELLING TEXTILE FIRMS,  10 May 2019
The Egyptian Government yesterday denied recent reports about the sale of the local spinning and weaving factories to foreign investors.  The Ministry of Public Business Sector said in a statement that the recent news about the Government's sale of the public spinning and weaving factories to foreign and local investors were "groundless."  "The government has been seeking to develop the spinning and weaving sector and to restructure its management companies," the ministry explained, describing the textiles sector as "one of the most important Egyptian industries."  READ HERE >>
SNIPPETS FROM AROUND THE WORLD
 
TRUMP’S CHINA TARIFFS  On 17 May 2019, the US Trade Representative’s Office (USTR) published in the Federal Register a notice beginning the process of imposing additional duties of up to 25% on all remaining imports from China (i.e. "List 4").  According to the notice, “[i]n light of China’s failure to meaningfully address the acts, policies, and practices that are subject to this investigation and its response to the current action being taken in this investigation, and at the direction of the President, the Trade Representative proposes to modify the action being taken in this investigation.”  The modification being proposed is imposing additional duties of up to 25% on “essentially all [Chinese-origin] products not currently covered” by one of the previous lists.  READ HERE >>.

List 4” covers approximately US$300bn worth of imports from China.  This list now covers apparel products  SEEN HERE >>


HOW ENVIRONMENTALLY SUSTAINABLE IS YOUR COTTON  Identity cotton standards such as organic cotton, BCI cotton and Cotton Made in Africa (CmiA) are better from an environmental and social perspective, right?  Actually, because the data on these issues is limited and sketchy, we simply do not know whether that is the case – and this raises a huge issue for apparel brands and retailers ..."

... "So where to from here?  All of this is by no means intended to criticise apparel brands or retailers for shifting towards BCI-accredited or organic cotton.  Instead, it is hoped that it can help kick-start a much-needed debate around issues of cotton sourcing and, particularly, claims around sustainable sourcing.  Is the move towards cotton standards such as BCI, organic and CmiA actually more sustainable?  Based on my own investigations into the issue, we simply do not know.

"Do we need more data comparing the different ways in which cotton is grown?  Of course we do.  If brands are switching in their droves to various cotton standards, we need to be absolutely sure they are doing it for the correct reasons and based on top quality research and data.

"Above all, we need to be sure we are doing the right thing by cotton farmers - many of whom are extremely poor.  Switching from conventional to identity cottons comes at a cost to farmers, and the conversion can be challenging, particularly with organic cotton.  This is not a switch to be undertaken lightly, and should not be made without comprehensive data to demonstrate that this is the right step for farmers – as well as for the environment."  MY EMPHASIS
Source
"APPAREL INSIDER".  #7 - May 2019. 
Publication can be subscribed to at the following link: www.apparelinsider.com
CLICK HERE TO FORWARD THIS NEWSLETTER TO A COLLEAGUE
PREVIOUS EDITIONS OF THE
"AFRICAN COTTON, TEXTILES & APPAREL MONITOR"
ARE ARCHIVED ON THE WEBSITE

WWW.AFRICANTEXTILESANDAPPAREL.COM
TO SUBSCRIBE TO THIS NEWSLETTER "CLICK" HERE
RESEARCH

Made in Ethiopia: Challenges in the Garment Industry's New Frontier”.  Paul Barrett & Dorothée Baumann-Pauly.  New York University Stern Center for Business & Human Rights.  New York, United States.  May 2019.
Synopsis:  In recent years, Ethiopia has launched a bold economic and social experiment by inviting the global garment industry to set up shop in the East African country.  Drawn by newly built industrial parks and a range of financial incentives, manufac­turers for some of the world’s best-known brands—among them, H&M, Gap, and PVH (Calvin Klein, Izod, Tommy Hilfiger)—employ tens of thousands of Ethiopian workers in a nascent sector the government predicts will one day have billions of dollars in sales.  This report provides a close look at the flagship Hawassa Industrial Park, a vast and still only partly filled facility which currently employs 25,000 workers about 140 miles south of the capital of Addis Ababa.  For all of its potential, the apparel industry in Ethiopia has already encountered difficulties.  The government’s eagerness to attract foreign investment led it to promote the lowest base wage in any garment-producing country—now set at the equivalent of US$26 a month.  On that amount, workers, most of them young women from poor farming families, cannot afford decent housing, food, and transportation.  Even when factory owners provide additional modest payments for regular attendance and meals, workers struggle to get by.  It’s common for young women to live four-to-a-room, without indoor plumbing.  Given relatively little training, restive employees have protested by stopping work or quitting altogether.  Productivity in the Hawassa factories typically is low, while worker disillusionment and attrition are high.  The full report can be accessed HERE >>

Comment
Its interesting that the authors of this report thank loads of people for their support in developing their report – but then they state: “Finally, we’re grateful to the current and former Hawassa Industrial Park factory employees whom we interviewed but are not naming to protect them from retaliation.”
 
 
Conference Proceedings - Textile Exchange’s First West Africa Regional Organic Cotton Round Table (OCRT)”.  Textile Exchange, Catholic Relief Services, US Department of Agriculture.  Koudougou, Burkina Faso.  September 2018.
Synopsis:  The agenda for the Regional OCRT was framed around insights from the recent Market Opportunity Scoping Project (MOSP) carried out by the Change Agency for the Textile Exchange which was presented during a panel discussion during the conference on “Organic Cotton’s Contribution to the Economic Growth of African Countries”  SEE HERE >>  and  READ HERE >> 
(see menu on left hand side of the page).
 
 
Cote d'Ivoire: Annual Cotton and Products”.  US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS).  Washington DC, United States.  26 April 2019.
Synopsis:  It has been forecasted that for the market year (MY) 2019/20 cotton fiber production will be at a record 925,000 bales (480 lb.).  The MY 2018/19 production estimate is raised to 875,000 bales, nearing the previous record of 900,000 bales achieved in 2014/15.  For the MY 2019/20 export projection also represents a record at 875,000 bales, owing to record supply and exports from the MY 2018/19 crop carrying into the next campaign.  The Government of Côte d’Ivoire set ambitious production targets that would translate to over 1-million bales of fiber production by MY 2020/21.  Despite intentions to increase local value addition, annual consumption remains low at 60,000 bales.  The full report can be  READ HERE >>.

 
Cotton: World Markets & Trade".  US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS).  Washington, DC, United States.  May 2019.
Synopsis:  The USDA’s first detailed forecast for the 2019/20 marketing year shows world ending stocks forecast down for the sixth consecutive year.  However, stocks outside of China will grow after declining in 2018/19 and reach a record of nearly 45-million bales.  Apart from China, ending stocks are forecast to increase in nearly all major producing and consuming countries as global production remains high relative to consumption due to Brazil’s record crops and the large increase in US production.  In contrast, China’s ending stocks are forecast to fall for the fifth consecutive year and be less than half the level seen at the end of China’s reserve buying in 2014/15.  Flat production, continued reserve sales, and consumption growth in China will combine to work stocks down.  US stocks will rise sharply due to a dramatically larger forecast crop and continued restrictions on US exports to China.  Global consumption is forecast to grow to a record of just under 126-million bales. World consumption will have gained 16 million bales since the low following the 2009 global financial crisis.  The full report can be  READ HERE >>.
UPCOMING EVENTS
SO WHAT IS HAPPENING TO THE
AFRICAN COTTON & TEXTILE INDUSTRIES FEDERATION
(ACTIF)
"ORIGIN AFRICA" (SEE >>) TRADE SHOW AS NO DATES HAVE BEEN ANNOUNCED?

 
  • Better Cotton Initiative - 2019 Global Cotton Sustainability Conference - Conference - 11-13 June 2019.  Shanghai, China.  For more information:  www.bettercotton.org
  • Messe Frankfurt 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
  • Messe Frankfurt 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

Apparently Messe Frankfurt is studying the possibility of establishing a textile trade show in Egypt.
If it does it will add to its existing African portfolio of textile and apparel trade shows (it already owns value chain trade shows in Ethiopia, and two in South Africa).
What will then become of Egypt’s Destination Africa?
CLASSIFIEDS
JOBS, TENDERS & PROCUREMENT
MANUFACTURING EQUIPMENT WANTED / FOR SALE
Looking for staff?   Want to engage a consultant?   Have equipment to sell?   Do you need 2nd hand machinery?   Have a tender?   For a limited period the "African Cotton, Textiles & Apparel Monitor" will publish (free of charge) select classified advertisements from firms / development organisations active in the Africa's crop to shop value chain.   Adverts limited to 50 words / 300 characters (and may include a mini logo). 
--------------------------------------------------------------------------
CLICK TO SHARE YOUR NEWS
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.
 
------------------------------------------------------
 
Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved.
*|IFNOT:ARCHIVE_PAGE|* *|LIST:DESCRIPTION|*
The views expressed in this newsletter do not necessarily reflect the views of the editor.

My mailing address is:
*|HTML:LIST_ADDRESS_HTML|* *|END:IF|*

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

If you would like to subscribe to the newsletter you can also do so by visit the website www.africantextilesandapparel.com

*|IF:REWARDS|* *|HTML:REWARDS|* *|END:IF|*
©2017 ACTAM