Ethiopia - next stop
for textile industry?
Swedish
clothing retailer H&M wants to set up shop in Ethiopia, since production
costs there are cheaper than in the Far East. Other clothing manufacturers are
hesitating. Could Ethiopia become the next Bangladesh?
Ethiopia's economy just
keeps growing - since 2007 at times with double-digit leaps and bounds.
"The Economist" projects that the country will experience annual
growth of 7 to 8 percent through 2016.
Ethiopia's government is apparently placing special emphasis on
the textile industry - by 2016, the country aims to export more than a billion
dollars worth of apparel. Factories established by the likes of H&M are
more than welcome.
According to a supplier, the Swedish chain wants to produce more
than a million items of clothing per month in the East African nation. A
company spokesperson confirmed that test runs have already been ordered from
Ethiopian producers.
Cheaper
than China
Many producers have in the past relocated production to
countries that offered cheap labor, like Bangladesh or China. But in such
countries, social standards have risen along with wages - while the world seems
to be examining production conditions increasingly critically. So producers
have started considering new options for cheap labor.
On the African continent, Morocco and Tunisia are known as
clothing production countries, mostly for discount apparel. Other African
countries, like Ghana or Kenya, don't play much of a role in the fashion
industry, according to GermanFashion, a German industry association.
Ethiopia offers a number of advantages, said Thomas Ballweg, a
procurement and technical consultant at GermanFashion. "On the one hand
are the lower costs - much lower than in China - with 80 million people living
there. And, it's near the sea - and quick to get to Europe via the Suez
Canal," Ballweg said.
This could shorten delivery time by a third compared with coming
from the Far East. In addition, Ethiopia's climate and that of neighboring
countries is well-suited for the cultivation of cotton, Ballweg emphasized. As
long as the cotton was of high enough quality, clothing producers could save on
expensive import by using local materials.
No new
Bangladesh
Apart from H&M, British supermarket chain Tesco and
Ireland-based discount textile company Primark also produce in Ethiopia,
according to GermanFashion. Observers warn that Ethiopia could become another
Bangladesh, with textile factory workers laboring under scandalous conditions.
Reports recur of Bengali factories burning down and causing numerous deaths. In
April a textile factory collapsed, killing more than a thousand people.
Christoph Kannengiesser of the German-African Business
Association told DW he can't imagine such a fate for Ethiopia - even discount
apparel companies like H&M or Primark are concerned about their reputation.
"For a company with a brand name that relies on its
clientele's approval, it would be a disaster for it to become known that social
or environmental standards are not being kept," Kannengiesser said.
He said standards set by the International
Labor Organization and World Trade Organization are high enough, adding that
that numerous non-governmental organizations and other independent groups monitor
production conditions in countries with cheap labor.
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