Welcome

to
Ethiopian Textile Industry Development Institute
 TEXTILE INDUSTRY
DEVELOPMENT IN ETHIOPIA

An Overview of Facts and Opportunities

Ethiopian Textile Industry Development Institute (ETIDI)

October, 2014
 A brief History
Textile sub-sector has long history of tradition in Ethiopian
beginning from the old times.
•People make clothes from the cotton supplied by small holder farmers
•This traditional cottage industry is inherited and continues up to now
•Making an important contribution to textile requirements.

The Beginning of Modernizing the Sector

The first integrated mill was established in 1939 in Dire Dawa
Town by the name Dire Dawa Textile Factory, which marked
the beginning of textile industrialization.
 CURRENT STATUS OF MEDIUM & LARGE LEVEL
TEXTILE INDUSTRIES

o Textile Products contributed 1.6% to the GDP (nominal) and

accounted 12.4% of the Industrial output by value terms in
2010.
 Annual Production capacity of Textile and Apparel Industry
 102 thousands tons of yarn
 207 million meter woven fabric
 50 million kg of knitted fabric
 63 million pcs of knitted garment and
 28 million pcs of woven garment
 Employed more than 48,000 workers
 For the last eight years, the export performance of the sector
has show an increasing trend, on average 50% per annum.
 The country gains USD 111.3 Million in the last fiscal year
 Number of Operational Factories as Per to the Value Chain

S. No. Area of Operation Number of Factories

1 Ginning 18
2 Integrated Textile Mills 20
3 Spinning 5
4 Weaving and/or Knitting 12
5 Handloom (medium size) 6
6 Dyeing and Printing 3

7 Blanket Factory 6
Garment Factory(knitted/woven)
8 60
Total 130
 Type of product, product range and production capacity

 In the country now a days from 10s to 20s on open end

and up to 60s count ring frame have been produced with
the available technology
Total Spindle available Installed
capacity(Ton/day)
Ring Frame Open End

288480 14480 260

 The Existing Technology in Spinning

Manufacturers Machines

TRUTZSCHLER Blow Room, Card, Draw Frame

ZINSER Roving and Ring frame
SCHLAFHORST Open end and winding
ORLINKON a combination of zinser and
SCHLAFHORST schlafhorst for roving ring open
end and winding
MURATEC Automatic Winding
RIETER Blow room up to ring and open
end
LUWA Humidification Plant
MARZOLIE From Carding up to Ring Frame
Total
 The Existing Technology in Weaving

Available Number
Type Of Machine Make
Of Machines

Shuttle loom Hutenslay 24

Rapier weaving Somet, Picanol,dornier, 1,199

vamatex, Versamat
Air jet weaving Picanol, Dornier 211

Water jet Tsuelakoma 190

Projectile weaving Sulzer 24

Handloom ethiopia 143

Total
1791
 The Existing Technology in Knitting

Available Number
Type Of Machine Make
Of Machines
Single Jersey Pailung, Pilotelli, Mayer, 175
knitting machine Monarch, Weliknit, Terrot,
Orizio, Protti
Double jersey Fukuham, Monarch, Mayer, 65
knitting machine Terrot, Pi-lung, Norah
Flat bed knitting Shima-sika, Protti, Norah 28
machine
Socks knitting 536
machine
Jacquard knitting Pailung 9
machine
Warp knitting Mayer & ci 6
Total 813
 The Existing Technology in Finishing

Type Of Machine Make Year Of Manufacture

Singing machine Ostoffsenge 1982-2004

Reggiani
Scouring-Bleaching Textim 1972-1983
machine Gollera
Mercerizing machine Textima 1964-1982
Gollera
Comerio
Continuous washing Erbateck 1972-2009
machine Gollera
Yarn dyeing machine Dilmenler 1972-2009
Longclose
Obeim
Galvani
Obermayer
 The Existing Technology in Finishing

Year Of
Type Of Machine Make
Manufacture
Fabric Dyeing machine Thies 1959-2009
Fongs
Beneks
Brazoli
Dilmenler
Sclavo
Benninger
Henerikson
Monfort
Drying machine Longlose 1965-1997
Galvani
Fongs
Omez
Goller
Unitechsantaluzia
 The Existing Technology in Finishing

Year Of
Type Of Machine Make
Manufacture
Stenter Bruckner 1969-2004
Monforts
Textima

Calendaring machine Poltecks 1969-2008

Monforts
Comerioercole

Sanforizing/compacting Bruckner 1975-1998

machine Santeks
Tube-tex

Decatizing machine Speratto SPA 1987-2004

Beilla Shrunk
 The Existing Technology in Finishing

Year Of
Type Of Machine Make
Manufacture

Raising m/c Lafer 1987-2004

Shearing m/c Lafer 1987-2004

Printing machine Reggiani 1970-2009

Rijiecon

Curing machine salwade 1989-2009

Quality control machine Guvencelik 1964-2004

Simat

Role winding machine Menschner 1962-2007

Textima
 Projects Under Investment Process

N Name of Investor’s Product

Status
o Company Citizenship Type
1 Karl International India Garment Rented Shade in Bole Lemi Industry Zone and will start operation
soon
2 Gulf Textile Pakistan Garment Rented Shade in Bole Lemi Industry Zone and will start
operation soon
3 Velocity India Garment Undergoing process to start project in Mekele
4 Experience Pakistan Garment Undergoing process to get land in Addis Ababa
Clothing
5 Dima Faiweiwei Ethio-China Spinning Operational
6 Shin TS Com Korea Garment Rented Shades in Bole Lemi Phase 2
7 Jay Jay mills India Garment Rented Shades in Bole Lemi Phase 2
8 SVP India Spinning Finalizing bank process and will soon start construction
9 Green Valley India Spinning Will soon start construction

10 New wide Garment Taiwan Garment Rented Shades in Bole Lemi Phase 2
11 Shin TS Korea Garment Rented Shades in Bole Lemi Phase 2
12 Atraco Garment Rented Shades in Bole Lemi Phase 2
13 Myungsung China Garment Rented Shades in Bole Lemi Phase 2
14 Akper Turkey Integrated Taken land in Ejere, Oromia and starting bank process
 OPPORTUNITIES

 Textile Industry Considered as number one priority sector by the

Government‘s Industrial Development Strategy.

 Availability of more than 3.2 million hectare of land and suitable

climate for cotton cultivation, but only some 6.9 % utilized so far.

 Huge potential for organic cotton cultivation.

 Ethiopia, known as the water tower of Africa, Provides one of the

Cheapest environmentally friendly hydroelectric power supplies in the
world (5 US cents/per kwh).

 Low cost and easily trainable skilled labor force (wages 40USD / a
month), less than Africa’s average.
 OPPORTUNITIES CON’T
• Skilled labor in the sector is increasing rapidly as a result of fast growing
education and training institutions in Textile Technology; two institutes, a
couple of textile Engineering departments in different Universities and a lot
of hundreds of TVET Schools and private training institutions.

• Quota and duty free market access to the US and EU as well as COMESA
markets. In addition Ethiopia signed with more than 16 bilateral trade
agreement, which include China, India, Turkey and Russia.

• Ethiopia offers one of the largest domestic markets in Africa, given its
population size and rapid economic growth.
 …OPPORTUNITIES CON’T

• Provision of infrastructure and service furnished (specialized) economic

zones. For e.g Kombolcha Textile Cluster, Dire Dawa Industrial Zone,
Hawassa Industrial Zone, Gondar Industrial Zone, Mekele Industrial Zone,
Jimma Industrial Zone and Addis Ababa Industrial Zone (s).

• Easy access to land on a lease fee ranging from 0 to 3USD/m2 in regional

states for a lease period of 60-80 years depending on the specific
investment location.

• English language is widely used in the business sector as it is the medium

of instruction in secondary and tertiary schools of the country.
 INCENTIVES

Aim: To encourage investment and promote the inflow of foreign capital and
technology into Ethiopia (both domestic and foreign).
1. Investment Incentives
Tax holidays:-

 100% Duty free importation of new or used machineries, equipments,

construction materials and vehicles (used as capital goods for the investment)
as far as it is not producible locally in Ethiopia.

 Duty free importation of spare part of 100% of capital investment for the first
5 years of operation.

 Ownership Transfer of invested capital goods to third party enjoying similar

privilege.

 It is possible to hire international expatriates free from income tax as far as

they stay for no more than two years.

 Reconciliation of VAT for materials purchased locally during the project period
is possible if declared in 6 months time.
2. Financial Incentives
 Development Bank of Ethiopia (DBE) extends a 70% loan against
30% equity contribution in cash by the investor for Brand New
Establishments.

 DBE’s extends loan with an interest rate of 8.5% and grace period of 5
years.

 Co-financing, loan buyout, working capital and international loan

repayments out of Ethiopia are some of the services DBE and many of
the domestic banks extend to the private sector.
 … INCENTIVES CON’T
Financial Incentives:-
 A one year non-collateral working capital loan scheme called Export
Guarantee Scheme with 1% interest is allocated in DBE to help
exporters manage their cash flow constraints. Long term non-collateral
loans are also available in many banks on different loan modalities
depending on export performances.

 Remittance of profit and dividends out of Ethiopia is possible.

 State owned logistics enterprises (Ethiopian Shipping Line, Ethiopian

Airline, Dry Port Services and Maritime) provide their services at
Break-Even Point(BEP).

 Training of operators is given free of fee.

Above all, Ethiopia has relatively regionally stable socio-political and economic
system & also Ethiopian labor law is in conformity with ILO standards.
 … INCENTIVES CON’T
3. Operation incentives
 Tax holidays:-

 Income Tax Holiday depending on export performance.

 Exemptions of Customs Tax and Duties on raw material through
a set of incentive schemes called duty draw back, voucher and
bonded manufacturing warehouse.
 Exemption from customs duty of locally purchased raw
materials on fast refund bases.
ETHIOPIAN TEXTILE INDUSTRY DEVELOPMENT INSTITUTE (ETIDI)

The Institute That Unlocks the Future of

Ethiopian Textile Industry
 THE ROLE OF ETIDI

 Objective:- Enabling the Ethiopian textile industry to be

competent in the global market through investment
support, production capacity building and marketing
support.
 Mission :- Enabling the Ethiopian textile industry
competent in the global market by providing sustained
investment expansion, consultancy, training research and
development laboratory and marketing support and
services.
 Vision :- We aspire to be a world-class institute that
enables the Ethiopian textile industry competitive in the
global market.
 ETIDI is organized along the textile value Chain
 SUPPORTS AND SERVICES CON’T
Capacity building(production)
 Training, benchmark implementation, laboratory testing and
inspection, R & D, Certification of quality standards etc.
 Technical consultancy and supports by availing local and foreign
experts
 Support in quality assurance and certification
Market supports and Services
 Marketing capacity building ( training and consultation)
 Logistics facilitation (transport, customs, finance, port, utility etc)
value chain- input and output linkages.
 Inputs facilitation (Sourcing and Supply chain)
 Facilitate input supply linkage with local raw material producers and
market linkage with foreign buyers
 FACILITIES OF ETIDI

Fully equipped training facilities

 Model spinning factory (under progress)
 Model weaving and knitting factory (under
progress)
 Finishing facilities (under progress)
 Design and Garment training classes and
facilities
 Modern and certified chemical and physical
laboratories
 Fully equipped library.
 MAIN CHALLENGES

 Since current machines are mostly

fitted with sophisticated electronic
devices not maintenance friendly
 Problem of availability service center
 Availability spare part