Dividend Policy Benefits Ethiopia Textile Investment Boom

　　 according to According to the statistics of Ethiopia Textile Industry Association (TIDI), the first 6 months of 2013~2014 fiscal year (July 2013), Ethiopia exported 60 million US dollars in textile and apparel, compared with the same period in the previous fiscal year, the export volume increased by US $15 million. Volta Information Center, a leading website in Ethiopia, said that Ethiopia's textile and apparel industry is experiencing explosive growth and will become one of the most important industries of Ethiopia.

　　 The advantages of production conditions are favored by international textile enterprises.

In recent years, many international Producers have set up product processing bases in Asia, such as Bangladesh and Vietnam. At present, with the increase of wage level and the increase of labor costs in Asia, some producers are more and more strict in terms of production conditions, and they are beginning to look for cheaper labor markets as production bases. According to the German Fashion Association's report, Morocco and Tunisia are known as clothing producers in African countries, mainly producing "discount" (cheaper) clothing, while other African countries such as Garner and Kenya are less developed. Ethiopia, as the second largest population in Africa, has many advantages in production. Thomas Ballweg, purchasing and technology consultant of the German Fashion Association, believes that Ethiopia has abundant labor force and low production cost. On the other hand, Ethiopia has the convenience of approaching the Suez canal, and the products can be shipped to European countries nearby. Compared with the Far East countries, the time of transport products from Ethiopia will be greatly shortened, which will save 1/3 of logistics and transportation time.

Thanks to favorable policy environment, low labor costs and convenient transportation conditions, some world famous textile enterprises are seeking to invest in Ethiopia. In May of this year, India Shrivallabh Pittie Textile Group will invest 550 million US dollars to build a SVP textile company, the largest textile factory in Africa, in Ethiopia Kombolcha, and the Bank of Ethiopia will provide financing support for it. A delegation from a garment investor in the United States visited Ethiopia and visited Ethiopia's investment prospects. The vice chairman of Phillips-Van Heusen (PVH), head of the delegation, said he was impressed by Ethiopia's efforts to create an attractive investment environment and promote industrialization. Akber, a Turkey textile company, is also planning to invest $175 million to build factories in Ethiopia, and other famous garment manufacturers are also considering whether to set up factories in Ethiopia. According to the Volta Information Center report, the first 9 months of the fiscal year, the Ethiopian clothing and textile industry has invested $84 million. In addition, Sweden's international clothing giant Hennes and Mauritz (H&M) and the British retail giant Tesco are also planning to open branches in Ethiopia.

The government of Ethiopia has formulated an economic development plan. By 2016, the economic growth rate of Ethiopia is about 7%~8%. At the same time, the government of Ethiopia also stressed the importance of strengthening the development of the textile industry, and welcomed the large garment manufacturers like H&M to build a factory in Ethiopia. According to a supplier of H&M, H&M hopes that orders for garment processing in Ethiopia can reach 1 million pieces per month, and a company spokesman confirms that Ethiopia's manufacturers are beginning to be included in H&M's clothing supply system.

Imports of raw materials were encouraged by national policies.

Recently, Minister Abtew of Ethiopia Ministry of industry said that since the implementation of the financial year, due to the continuous expansion of the company's production capacity and the strong demand in the domestic market, Ethiopia industrial production enterprises have been plagued by insufficient supply of raw materials. For this reason, the Ministry of industry has taken active measures to expand the import of raw materials for industrial production, especially the leather and textile enterprises that are subject to raw material constraints, and will be strongly supported by the Ministry of industry. At the same time, the Ministry of industry will also actively respond to the shortage of domestic electricity supply to meet the production needs of industrial enterprises. Abtew minister said that at present, the market demand of Ethiopia in the domestic market has been expanding. In the past 6 months, 60% of the textile and leather products have been supplied to the domestic market. At present, according to official sources, Ethiopia has 60 garment manufacturers and 15 textile enterprises. The Minister of industry Sisay Gemechu has announced plans for the construction of the textile and leather industry industrial park in the country.

The determination to develop the Ethiopian textile and garment industry can be seen from the investment projects formulated by the government. Textile and clothing production is the first investment promotion project of the government, including: first, strengthen garment processing and manufacturing to promote the increase of import and export orders. Second, we should make use of the advantages of cotton in the local and neighboring countries for spinning production. Third, the introduction of weaving production projects to ease the urgent need for fabric tension.

The head of the Leather Industry Development Research Institute (LIDI) said that in the past 9 months, the exportation of the leather industry earned a total of 99 million 890 thousand US dollars, an increase of 11%. compared with the same period last year. Therefore, leather processing is also an investment project of the government. Including: men and women leather shoes production, leather bag production and leather gloves production projects.

　 Infrastructure is supported by multi-party funds.

Whether infrastructure is perfect is an important consideration for many international textile enterprises to choose factory bases. Infrastructure conditions in Africa are relatively backward, which is also one of the reasons that restrict the development of its textile industry. As one of the members of the African Union, Ethiopia's Economic Development Bank of Africa (BADEA) decided to provide us $10 million in April this year to support the construction of the Essex highway project in Arabia. In May, Standard Bank of South Africa will set up a representative office in Ethiopia as a platform for entering Ethiopia. At the same time, the world bank agreed to provide us $380 million loan to Ethiopia to improve the infrastructure and public services in the city of Ethiopia and promote sustainable development.

In addition to the economic assistance from African Union and other international organizations and institutions, Ethiopia has continuously created and improved the construction of textile and garment industry, including capital, logistics, infrastructure and public services. It has created favorable conditions for the development of the textile and garment industry. The Ethiopia textile industry association also put forward a textile development plan in the stage of "economic growth and transformation plan", which was implemented in the country from 2010~2011 to 2014~2015. The association said that in the implementation of the economic transformation plan stage, Ethiopia plans to achieve US $1 billion in exports of textiles and clothing by 2016.