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
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
o





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
8
Garment Factory(knitted/woven)
Total
60
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
SCHLAFHORST
a combination of zinser and
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
Type Of Machine
Make
Available Number
Of Machines
Shuttle loom
Hutenslay
Rapier weaving
Somet, Picanol,dornier,
vamatex, Versamat
Air jet weaving
Picanol, Dornier
211
Water jet
Tsuelakoma
190
Projectile weaving
Sulzer
24
Handloom
ethiopia
143
Total
24
1,199
1791
The Existing Technology in Knitting
Type Of Machine
Make
Available Number
Of Machines
Single Jersey
knitting machine
Pailung, Pilotelli, Mayer,
Monarch, Weliknit, Terrot,
Orizio, Protti
175
Double jersey
knitting machine
Fukuham, Monarch, Mayer,
Terrot, Pi-lung, Norah
65
Flat bed knitting
machine
Shima-sika, Protti, Norah
28
Socks knitting
machine
536
Jacquard knitting
machine
Pailung
Warp knitting
Mayer & ci
Total
9
6
813
The Existing Technology in Finishing
Type Of Machine
Make
Year Of Manufacture
Singing machine
Ostoffsenge
Reggiani
1982-2004
Scouring-Bleaching
machine
Textim
Gollera
1972-1983
Mercerizing machine
Textima
Gollera
Comerio
1964-1982
Continuous washing
machine
Erbateck
Gollera
Dilmenler
Longclose
Obeim
Galvani
Obermayer
1972-2009
Yarn dyeing machine
1972-2009
The Existing Technology in Finishing
Type Of Machine
Fabric Dyeing machine
Drying machine
Make
Thies
Fongs
Beneks
Brazoli
Dilmenler
Sclavo
Benninger
Henerikson
Monfort
Longlose
Galvani
Fongs
Omez
Goller
Unitechsantaluzia
Year Of
Manufacture
1959-2009
1965-1997
The Existing Technology in Finishing
Type Of Machine
Make
Year Of
Manufacture
Stenter
Bruckner
Monforts
Textima
1969-2004
Calendaring machine
Poltecks
Monforts
Comerioercole
1969-2008
Sanforizing/compacting
machine
Bruckner
Santeks
Tube-tex
1975-1998
Decatizing machine
Speratto SPA
Beilla Shrunk
1987-2004
The Existing Technology in Finishing
Type Of Machine
Make
Year Of
Manufacture
Raising m/c
Lafer
1987-2004
Shearing m/c
Lafer
1987-2004
Printing machine
Reggiani
Rijiecon
1970-2009
Curing machine
salwade
1989-2009
Quality control machine
Guvencelik
Simat
1964-2004
Role winding machine
Menschner
Textima
1962-2007
Projects Under Investment Process
N
Name of
o
Company
1 Karl International
Investor’s
Citizenship
India
Product
Type
Garment
2
Gulf Textile
Pakistan
Garment
3
Velocity
India
Garment
Rented Shade in Bole Lemi Industry Zone and will start operation
soon
Rented Shade in Bole Lemi Industry Zone and will start
operation soon
Undergoing process to start project in Mekele
4
Experience
Clothing
Pakistan
Garment
Undergoing process to get land in Addis Ababa
5
Dima Faiweiwei
Ethio-China
Spinning
Operational
6
Shin TS Com
Korea
Garment
Rented Shades in Bole Lemi Phase 2
7
8
9
Jay Jay mills
SVP
Green Valley
India
India
India
Garment
Spinning
Spinning
Rented Shades in Bole Lemi Phase 2
Finalizing bank process and will soon start construction
Will soon start construction
10
11
12
13
14
New wide Garment
Shin TS
Atraco
Myungsung
Akper
Taiwan
Korea
Garment
Garment
Garment
Garment
Integrated
Rented Shades in Bole Lemi Phase 2
Rented Shades in Bole Lemi Phase 2
Rented Shades in Bole Lemi Phase 2
Rented Shades in Bole Lemi Phase 2
Taken land in Ejere, Oromia and starting bank process
China
Turkey
Status
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