African Cotton & Textile Industries Federation
05 About ACTIF. 06 ACTIF Continental Representation. 07 ACTIF Members. 10 The Cotton Component. 12 The benefits of investing in the Carbon Footprint mitigation project. 15 Towards a climate smart African cotton value chain.
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17 CTA conference with a difference.
Editorial
Foreword
Strengthening the regional value chain.
African Cotton Industry: Interesting times.
News in Brief ACTIF visit to India.
19 International Cotton, Textile & Apparel Conference for East Africa: Key Outcomes. 28 Regional clothing Project: ACFRN: A study on, Chinese ascendancy in the global clothing industry, its impact on African countries.
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30 Investing in Sub-Saharan Africa's cotton, textile & apparel sectors. “The time for Africa is now.” 32 Technology and Innovation: Advancing a Vibrant Textile Industry in Africa. 36 Cotton potential in Africa. 37 Readers comments / Calendar of events. 38 Pictorial
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
40 Congress Recesses without Renewing the AGOA Third Country FabricProvision, as Apparel Imports Continue To Improve 42 Economic Partnership Agreements A new dawn for Africa’s CTA sector 43 Special Focus on Nigeria: Efforts to revive a sleeping giant. 1
Editorial
Strengthening the Regional Value Chain. By Rajeev Arora, Executive Director, ACTIF & Editor (Cotton Africa Magazine) We are delighted to welcome all our distinguished readers to
growth of apparel exports to the U.S. from our region, and
another exciting edition of the Cotton Africa Magazine. We are
emphasizes the need for ACTIF
proud to be in circulation with now our 3rd edition, and are truly
amalgamate their efforts and sustain the current engagement with
grateful for the continued ongoing support and feedback we have
the US Government, US Congress and key Trade representatives
received from across the board. The year 2011 was full of
to extend the African Growth and Opportunity Act (AGOA)
vibrancy and a lot memorable events including hosting of the first
“third-country fabric” provision. ITMF President Bashir Ali
ever East African Cotton, Textile and Apparel (CTA) conference
Mohammed advises on the paramount need for the region to
held in Mombasa and ACTIF’s participation in the 7th
invest and adapt innovation and technology in order to compete
International Cotton & Textile Conference held in China.
effectively in the global stage. I’m also pleased to note that
2012 has arrived saddled with its expectations and challenges. At
Carbon foot print mitigation in the Textile Industry has been
ACTIF we believe it is another step forward toward achieving our
highlighted in this issue with contributions from our ACTIF Vice
vision of an integrated cotton, textile and apparel industry that
Chair, Daniel Wong and Prof. Godwell Nhamo, a climate change
effectively competes on the world market. Previous years have
expert.
seen the region slowly thrust through barriers that stand in our
ACTIF’s goal is to see greater synergy within the African region,
way to realize our goals and strengthen the regional value chain.
enhancement of partnerships toward a common goal and
It is at this current level of achievement that each one of us has to
drawing in international industry players to boost trade and
take responsibility of progressively contributing toward the
strengthen the value chain. We will be happy to receive your
development of the African Cotton, Textile and Apparel industry
feedback and contributions on how we can improve or any
within our respective capacities, across the cotton value chain.
specific topics that you would like us to cover in our subsequent
In our 3rd edition you will find some thought provoking articles
issues. Our online editions can be accessed through our website
that address several issues within the industry demonstrating the
www.cottonafrica.com, advertising opportunities are also available
hopes, challenges, as well as guided strategies to build and grow
to regional and international enterprises that would like to reach out
the industry. Paul Ryberg, one of our regular contributors, clearly
to our primary our audience in over 20 African countries.
demonstrates the importance of AGOA that has led to significant
I wish you all a happy read!
and AGOA stakeholders to
Editor: Rajeev Arora, arora.r@actifafrica.com Editorial Board: Rajeev Arora, Barry Fisher, Joseph Nyagari, Wanjiku Muigai Contributors: Pierre Berthelot, Danielle Wong, Prof. Godwell Nhamo, Dr. Isabella Wandaka, Harminder Sahni, Wang Tiankai, Dr. C.N. Waturu, Anthoni Murithi, Prof. Dorothy McCormick, Bashir Ali Mohammad, ACTIF, Dr. Alejandro Plastina, Paul Ryberg, Ben Nupnau, Joseph Nyagari Editorial and Design Direction: ACTIF Photography: ACTIF Design and Layout: Whisper Loud Creations Ltd. Advertising Sales: Joseph Nyagari, Tel: +254 725 038 884 / +254 733 247 052, Email: info@actifafrica.com Printed by: Colourprint ACTIF Head Office: TVR Plaza, Block 3A, Muthithi Road, Westlands, Nairobi, Kenya, P.O. Box1249-00606, Sarit Center, Nairobi, Kenya Tel: +254-733247052 / 725038884, Email: info@cottonafrica.com, Fax: +254-20-2022531, Web :
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www.cottonafrica.com Distributed by: Cotton Africa is published every three months and distributed to Cotton, Textile and Apparel industry players including spinners, manufacturers, fashion designers, textile technology providers and traders in 20 African Countries as well as India, China, EU and the United States. The mailing list has been established with the help of ACTIF members across Africa and is updated on a regular basis. Any enquiries relating to the list should be addressed to the editor. Cotton Africa is subject to copyright. Should you wish to lift any material from the publication, please liaise with the editor beforehand.
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Foreword
Africa’s cotton industry: Interesting times. By Mr. Jaswinder (Jas) Bedi Chairman, ACTIF Africa’s regional cotton industry is facing interesting times, full of hope and opportunities that we need to proactively take advantage of in order to increase our share of the global trade. Nigeria is one example of the colossal potentials that exist in our region. I am glad to note that in spite of the overwhelming challenges that led to the closure of many factories, the stakeholders within the the Nigerian cotton industry and the Nigerian Government, have taken it upon themselves to revive the sleeping giant. In particular, it is commendable to note that the National Cotton Association of Nigeria and the Bank of Industry have taken up the lead role in spearheading these efforts. As part of ACTIF membership, we are happy to continue supporting Nigeria and also provide the necessary linkages with ACTIF’s other 19 member countries across the region. We are also looking forward to strengthening our linkages in the West African region beyond the current membership in Nigeria and Ghana in order to build on our key objective of strengthening the regional value chain. I would like to take this opportunity to extend a warm welcome to all to participate in the next Origin Africa event scheduled to take place between 25–28th April 2012, at the Sheraton Hotel, Addis Ababa, Ethiopia. The theme of this event is to celebrate the spirit, style and innovation of modern Africa, and presents a great opportunity to book a booth and showcase to Africa what your organization/company do. This is a move toward greater synergy and partnership across the cotton value chain within the African region together with international participants. A successful journey starts with one step, and is more fulfilling taking it with a friend. Enjoy the read.
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News in brief
India’s export ban: ICA encouraged by India's move to lift export ban. The Indian Government, to the dismay of many, introduced another unilateral cotton export ban. A recall to 2010 ban, ramifications led to huge disruptions of trade with many firms having to pay out large sums of money as a consequence of arbitration awards against them. The ban was also a key element in the extraordinary rise in world cotton prices reaching unprecedented historical heights. The ICA urged India to reconsider its policy and revoke the ban. In a strong show of global support and unity, this message was reinforced by other key industry associations. Six days later the Indian government lifted the ban which is of great encouragement to the ICA and other key stakeholders; subsequently the ICA has requested talks with the Indian government officials to discuss, in greater depth, the issues that led to the ban and to try to seek mutually acceptable solutions. www.ica-ltd.org. Report by the International Cotton Association 13 March 2012.
NEW BOARD ELECTED: Ethiopian Textile & Garment Manufactures’’ Association (ETGAMA) Ethiopia Textile and Garment Manufacturers Association – ETGAMA elected a new board during their annual general meeting held in November 8th 2011 at Damu Hotel meeting hall. The board is now in operation. The newly elected board members with their respective positions are listed below: 1. Mr. Fassil Tadesse – President 2. Mr. Yidnekachew Taye –Vice President 3. Mr. Yilikal Bisenebit – Administration and Finance 4. Mr .Kassaye Mekuria - Member 5. Mr . Haile G Egzabher - Member 6. Mr. Getachew Biratu - Member 7. Mr. Abiy Gidey - Member ACTIF wishes to thank the outgoing chairman Mr. Kassaye Mekuria and his team for all their support and extends its congratulations to the new Chairman Mr. Fassil Tadesse and the entire board. We wish them all the best as we continued to work together to develop the regional value chain. Report by the Secretary General: Ageazi Gebreyesus, ETGAMA.
ACTIF visit to India to promote Origin Africa 2012 Trade Expo event in Addis, Ethiopia. ACTIF chairman Mr. Jaswinder Bedi and the executive Director Mr. Rajeev Arora, the Executive Director of ACTIF with the support of WAZIR India were able to meet with the full value chain national associations and manufactures in India to promote the Origin Africa go to event to be held in Addis Ababa, Ethiopia between 25th and 27th April 2012. Several meetings were held resulting in positive interests of not only participation in the event, but also to explore the investment and partnership opportunities with Africa. ACTIF team was able to interact with a number of stakeholders, including Mr. Deepak Seth, Chairman, House of Pearl - a $200 million export house that ships apparels to USA and EU markets from India, Bangladesh and Vietnam; Mr. Mukund Chaudary, Chairman Confederation of Indian Textiles Industries (CITI) and also Chairman of Spentex India one of the current investors in Ethiopia's in cotton and ginning sector; Mr. Amit Goyal, Regional Chairman of the Federation of Indian Export Organization (FIEO) - an overall organization representing all sectoral manufacturers for export federations; Mr. Patudia, group chairman, GTN Group - one of the largest ginning and spinning company in India; Mr. Dhiren Seth, Chairman, Cotton Association of India (CAI); Mr. Prashant Agarwal, Managing Director, Bombay Rayon Fashions - a billion dollar group and also the largest exporters of garments in India having manufacturing facilities in India, Bangladesh and now interested to invest in Africa; Chairman Mr. Amit Ruparell and Executive Director Mr. Rajagopal for The Cotton Textile Export Promotion Council (TEXPROCIL); Mr. A. B. Doshi, Textile Commissioner, Ministry of Textiles, Government of India; Mr. Sanjeev Duggal, CEO & Executive Director Centum learning limited - a Bharti associate investment company working in 16 African countries in corporate training, skill development, vocational education and training & employment generation; Mr. A.K. G. Nair, group director of Pearl Academy of Fashion - a pioneering Institute of Fashion and Design imparting quality and innovative Education and Mr. Neeraj Prakash of Strange Exports PVT Ltd - an upcoming investment group for exporting apparels in India. Report by the African Cotton and
Mr. Jaswinder Bedi (Chairman, ACTIF), Mr. Prashant Agarwal, (Managing Director, Bombay Rayon Fashions) and Rajeev Arora, (Executive Director, ACTIF)
Textile Federation (ACTIF)
Malawi Cotton industry developments.
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Malawi has increased planted area from historically 50-80000ha to unprecedented 200-230000ha this season, partly motivated by 2011 good farm gate prices plus strong political will by Government and cotton stakeholders. The Government has invested USD 10.0 million for procurement of certified seed chemicals and sprayers. The last 2-4 years, Malawi relied on imports from Zambia and Zimbabwe. This, however, is set to change as commercial seed companies Quoton and Monsanto have begun setting up to produce certified seed locally. Cotton Development Trust (CDT) is in the forefront of conducting demonstrations which commenced 4-5 years ago from mere 100 demos now up scaled to 1500 countrywide with multiplier effect from follower farmers . Finally the authorities in Malawi have allowed controlled trials with mock trials running this season and Real trials projected for next season. A more comprehensive feature on Malawi will be featured in the subsequent issues of Cotton Africa Magazine. Report by Patrick Khembo Chairman, CDT Malawi.
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About ACTIF
ACTIF Board
About ACTIF ACTIF is a regional trade body formed in June 2005 by the cotton, textile and apparel sectors from across sub-Saharan Africa to create a unified and recognized voice in both regional and global trade affairs. Individual countries recognized the fact that they could no longer act in isolation or remain fragmented in the face of current and future challenges to the cotton and textile industry, hence the need for regional integration that would in turn lead to market discovery, increased business linkages, trade and investment. ACTIF’s mandate is to bring the disparate needs of the cotton, textile and apparel sectors into cohesive and consensus driven positions at regional and international trade and development forums. The aim is to promote African cotton, textile and apparel value chain from farm to fashion. Brand Africa – Origin Africa’s campaign is designed to help Africa make its mark in the fashion world by showing buyers the scope of its design, fabrics and manufacturing facilities.
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Mission “To develop and successfully deliver services that enhance our membership’s competitiveness in the world market.” Vision “An integrated cotton, textile and apparel industry that effectively competes on the world market.” Objectives • Build cooperation, interaction, partnerships, alliances, networks and market linkages; • Promote a regional supply chain, focusing on trade issues of all sectors of the value chain, building a platform for reducing constraints to regional trade; • Address challenges and increase competitiveness in the global post-quota environment; • Address key policy issues that negatively affect regional and global trade; • Collect market data, generate information exchange and share regional expertise; • Promote investment and encourage international alliances and affiliations; • Recognize and support accepted principles of international codes of corporate conduct; • Facilitate awareness of new technologies and represent the regional membership at regional and international fora and lead advocacy and lobbying actions for the best interest of ACTIF members.
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ACTIF Continental Representation Corporate membership includes National Associations from 20 countries
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Botswana
Egypt
Ethiopia
Ghana
Kenya
Mozambique
Namibia
Nigeria
Rwanda
South Africa
Zambia
Zimbabwe
Lesotho
Sudan
Madagascar
Malawi
Mauritius
Swaziland
Tanzania
Uganda
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Members
ACTIF Members
Botswana 1.Botswana Exporters Manufacturers Association (BEMA) Evangelist Loago Raditedu: Executive Director Tel.267-3911883/4 Fax.267-3911001 Cell.7230000 or 72300080 Email.bema@exporters.bw Email.proscons@info.bw Egypt 2.Alexandria Cotton Exporters Association (ALCOTEXA) Mr.Ahmed K.Elbosaty: President 68 Gameat Al Dowal Al Arabia Str. Al Mohandessin-Giza 12311-Egypt Tel.202-3336-1516 Fax.202-3336-1481 Email.elbosaty@modernnile.com info@alcotexa.org www.alcotexa.org 3.Textile Export Council Dr.Dalia Rady: Executive Director Imtdad Ramses Ministry of Finance Towers, Tower 6, 11thFloor Tel.002-02-23420918 Fax.002-02-23420918 Email.info@Textile-Egypt.org www.Textile-Egypt.org Ethiopia 4.Ethiopia Textile & Garment Manufactures Association (ETGAMA) Ageazi C. Yesus: Secretary General PO BoX 29945, Addis Ababa Ethiopia Tel. +251-116630675 Fax. +251-116630681 Email: etgama@ethionet.etionet.et / info@etgama.org www.etgama.org 5.Ethiopian Cotton Producers Ginners & Exporters Association Assefa Aga Roba Ethiopian Cotton Producers, Ginners, and Exporters Association Head Office Infront of Addis Ababa Stadium Sahile Silassae Building, Suite 1004 Tel. +251-11-515-5708 +251-11-515-5706 +251-11-515-9441 Fax.+251-11-515-2488 P.O.Box: 100277 Addis Ababa, Ethiopia E-mail: info@ethiopiancotton.org ethiopiancotton@ethionet.et Ghana 6.TEXSTYLES GHANA LTD Miss.Kwabena Owusu Yentumi P.O.BOX 606 CO,Tema Tel.233-022304439 kwabena.yentumi@vliscogh.com Kenya 7.Kenya Association of Manufacturers (KAM) Mrs.Betty Maina: Executive Director betty.maina@kam.co.ke
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Primary Contact: David Sijenyi Assistant Executive Officer David.Sijenyi@kam.co.ke Textile Contact-Nairobi Patrick.kaleve@kam.co.ke joseph.wairiuko@kam.co.ke Textile Contact-Mombasa kameamombasa@africaonline.co.ke 8.Cotton Development Authority (CODA) Micah Pkopus Powon (C.E.O) Mr.Fanuel Lubanga (Marketing Officer) Riverside Lane off Riverside Drive P.O.BOX.66271-00800 Nairobi Tel.254-02-4444155/156/253,254-3530908 Fax.254-020-4444151 Email.info@cottondevelopment.co.ke Website.www.cottondevelopment.co.ke 9.Association Of Fashion Designers Of Kenya-AFAD Corporate Member Lucie Njoroge: Secretary Physical Address Adalyn House, Ngong Road Off Kindaruma Lane Post Office Box. 2131-00200 Nairobi Telephone.254-0724357615/0734265392 Email.info@afadk.co.ke Website.www.afadk.co.ke Lesotho 10.Lesotho Textile Exporters Association (LTEA) Mr.Johnny Lin: Executive Secretary Private Bag: A73 Maseru 100 Lesotho Physical Address: 009 Thetsane Industria Maseru Lesotho Tel.266-22312788 Fax.266-22326649 secretariat@lesothotextiles.com www.lesothotextiles.com Madagascar 11.Groupement des Enterprises Franches et Partenaires(GEFP) Julie Ratsimisetra: Secretary P.O.Box.7564 Antananarivo 101, Madagascar Physical Address: Villa E2, village des Jeux, Ankorondrano, Antananarivo Tel.261-202238050 Fax.261-202238050 Email.gefpmg@moov.mg www.gefp.mg Mozambique 12.Associacao Algodoeira de Mocambique Mrs.Gizela Chisano P.O.Box.1621 Avenida de Angola,2850 Maputo, Mozambique Tel.258-21-466583 Fax.258-21-466018 Email.gizela.chissano@jfs.co.mz 13.Mozambique Institute for Cotton Mr.Noberto Mahalambe iampab@zebra.uem.mz Mr.E.Langa cmacauacua@tvcabo.co.mz Malawi 14.Malawi Garment and Textile Manufacturers Association
Mr.K.K.Desai Desco1943@gmail.com 15.Cotton Development Trust Patrick W.Khembo: Chairman Chemicals and Marketing Company Ltd Kidney Crescent Road Light Industrial Area Blantyre Email.pkhembo@chemicals.co.mw P.O.Box.1230 Blantyre Tel.265-1-870600 Fax.265-1-871515 Mauritius 16.Mauritius Export Association(MEXA) Miss.Lilowtee Rajmun lilowtee@mexa.mu www.mepza.org Namibia 17.Namibian Manufacturers Association (NMA) Hennie Fourie P.O. Box.20810, Windhoek, Namibia Physical Address: Square Park Centre Corner of Hebenstreit & Willemien Streets Ludwigsdorf, Windhoek Tel.+264-061-308053 Fax.+264-088-621079 Email.nma@nmanamibia.com www.nmanamibia.com Nigeria 18.National Cotton of Nigeria (NACOTAN) Alhaji Ali Isa DanMaraya: President National Cotton of Nigeria Nagwamatse House 3rd Floor, P.O.Box.8129 Kaduna, Nigeria Mobile. 234-8035870278 Email: nacotan@yahoo.com kwajaffahamma@yahoo.com 19.Nigerian Textile Garment & Tailoring Employers Association Mr.J.P.Olarewaju: Director General Email: boseadu63@yahoo.com Rwanda 20.UTEXRWA Sebuhinja Celestin-Spinning Manager c/o Raj Rajendran B.P. 430 Kigali Gisozi Telephone: 250 514176/2500788411182 Mobile: 25008301107/2500788303031 Email.sebuhinjacelestin@yahoo.com Email.accounts@utexrwa.com South Africa 21.Textile Federation Of South Africa (TEXFED) Brian Brink P.O. Box.53 Bruma 2026 South Africa Physical Address 40 Seventh Ave.Edenvale 1610 Tel. 27-11-454-2343 Fax. 27-11-454-2654 Email: texfed@jhbmail.co.za www.texfed.co.za
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Members
22.Cotton South Africa Mr. Hennie Bruwer: CEO P.O. Box.912232 Silverton 0127 Tel.27-12804-1462 Fax.27-12804-8616 Email: enquiries@cottonsa.org.za www.cottonsa.org.za 23.Export Council for the Clothing Industry Mr. Jack Kipling jack@clotrade.co.za www.satiec.co.za 24.Apparel Manufacturers Of South Africa Johann Baard Executive Director Email: johann@capecloyhing.co.za 6th Floor Cape Chamber House 19 Louis Gardner Street Foreshore ,Cape Town,South Africa P.O.Box.204 Cape Town 8000 Tel.27-21-418-191314 Fax.27-21-4254377 Sudan 25.Sudan Cotton Company Ltd-SCCL Dr. Abdin Mohammed Ali: Director General P.O. Box. 1672 Khartoum Physical Address Parlman St,Khartoum Tel. 249-83-771567 Fax. 249-83-770703 Email: sccl@sudanmel.net.sd www.sudan-cotton.com Swaziland 26.Swaziland Cotton Board Mr. Tom Jele P.O. Box.230 Manzini Swaziland Physical Address: Mancishane Street Manzini Tel. 268-5052775 Fax. 268-5052775 Email: cottonboardmz@posixco.sz 27.Swaziland Textile and Apparel Traders Association / Fashion International Swaziland Jay Hall: Chairman PO Box 564, Matsapha M202, Swaziland Tel: 268-2-5184231 Mobile: 268-7-6190323 Fax: 268-2-5187869 Jayhall@gaints.co.sz Tanzania 28.Tanzania Cotton Association(TCA) Dr. Hamisi Kigwangala mskltd@gmail.com www.tancotton.co.tz 29.Tanzania Cotton Board Marco Mtunga P.O. Box.9161 3rd FloorPamba House Dar-es-salaam ,Tanzania Tel. 255-222-122564/255-222-128347
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ACTIF Members Fax. 255-22211-2894 Email.tclb@tancotton.co.tz mtungam@yahoo.com Uganda 30.Uganda Cotton Development Organization(CDO) Ms. Jolly Sabune Physical Address: Cotton House, Plot 15 Clement Hill Road, Kampala, Uganda Tel. 256-41-232968/259538 Fax. 256-41-232975 Email: cdo2africaonline.co.ug www.cdouga.org 31.Uganda Textiles And Garment Manufacturers Association Mr.Yuichi Kashiwada ykashiwada@africaonline.co.ug 32.Uganda Ginners And Cotton Exporters Association Mr.Bruce Robertson: Chairman cginners@yahoo.com Fax. 256-041-4255970 Zambia 33.Zambia Apparel Manufacturers Association Mr.Kam Shah topsmgt@zamtel.zm 34.Cotton Association of Zambia Mr.Joseph Nkole: National Coordinator P.O. Box. 32281 Lusaka Physical Address: Plot No.4297 Buyantanshi Road Zamseed Premises, Industrial Area. Tel. 260-211-241819/241839/846012 Mobile. 269-977-776262/955776262 Email: josephnkole@cotton.org.zm Ms. RosaM.Simuchimba: Office Manager Tel. 260-211-846011 Mobile. 260-955-840599/955840599 Email: rosasimuchimba@yahoo.com 35.Cotton Board of Zambia Mr. Dafulin Kaonga Board Secretary Physical Address: Cropserve Stand Showgrounds Lusaka P.O. Box. 33734 Lusaka Tel. 260-211-846011/260-211846012 Email: dafulink@cottonboardzambia.com Email: info@cottonboardzambia.com Zimbabwe 36.Zimbabwe Textile Manufacturers Association Mr.Tararama Gutu: Chairman Email: tgutu@merlin.co.zw Zimbabwe Textile Manufacturers Association c/o Karina Pvt Ltd 15 Argyle Rd, Avondale Harare Tel. 263-4-706938 or 263-701170/3 Fax. 263-4-335-432 Email.textileinvestmentszim@yahoo.com 37.Zimbabwe Clothing Manufacturing Association Mr. Jeremy Youmans Jeremy@paramount.co.zw 14 Plymouth Rd Southerton Harare Box.610 Tel. +263 4 770 404-8/263 772 231 802 Fax. 263 4 754 376
38.National Cotton Council of Zimbabwe Mr.Godfrey Buka c/o Cotton Ginners Association Physical Addres:s Cooksey House, No.2 Simon Mazorodze Road, Harare, Zimbabwe Tel. 04-263-783461/263-912-243920 263-912-709918, 263-914171088 Email: cga@cga.co.zw Associate Members Kenya 39.Kenya Gatsby Mr Francis Mwilu: Sector Manager PO Box 44817-00100, Nairobi Kenya Tel: 020-2720711 Email: info@kenyagatsby.org 40.Kenya Export Processing Zones Authority: EPZA Dr.Richard Mutule Kilonzo: Chief Executive Physical Address: Athi River Postal Address: P.O.Box.50563-00200 Nairobi. Tel.254-45-6626421-6 Fax.254-45-6626427 Website.www.epzakenya.com Email.info@epzakenya.com India 41.Bajaj Steel Industries Limited Mr.Mahendra Kumar Sharma (President) Imambada Road Nagpur-440018 (M.S.)India Tel: +91-712-2720071-79 or +91-93251-32305 Fax: +91-712-2723068/2728050 Email.bsi@bajajngp.com, mks@bajajngp.com Website.www.bajaj.ngp.com Tanzania 42.Wakefield Inspection Services Moses C.Bujaga: Business Manager P.O.Box.71148 Dar es Salaam Physical Address: Kurasini Bandari Road Plot 6368 Tel: 255222122217/2552221222207, Fax: 255222125346 Website.www.wiscontrol.com Nigeria 43.Bank of Industry-Nigeria Waheed Olagunju P.O.Box.2357 Lagos Tel: 234-8034032123 / 234-2715088 Email.wolagunju@boinigeria.com Mauritius 44.Intertek (Mauritius)Ltd Amrut K.Desai: Regional Director Physical Address: 2nd Flr, Noor Building Royal Rd, Phoenix, Mauritius Tel: 230-6980343/6978251 Email.amrut.desai@intertek.com, Website.www.intertek.com
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
ACTIF Board Members
Sector: Textile | Country: Kenya
Sector: Apparel | Country: Madagascar
Country: Kenya
Jaswinder (Jas) Bedi Chairman
John Hagreaves Director
Barry Fisher Director - Nominated
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Sector: Apparel | Country: Mauritius
Danielle Wong Vice Chair
Sector: Textile | Country: Ethiopia
Fassil Taddesse Treasurer
Sector: Production and Ginning | Country: Uganda
Jolly Sabune Director
Sector: Production and Ginning | Country: Zambia
Joseph Nkole Director
Country: South Africa
Jack R. Kipling Director - Nominated
Country: Kenya
Rajeev Arora Executive Director
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Features
The Cotton Component “All ACP Agricultural Commodities Programme” By Pierre Berthelot, Head, COS-cotton Secretariat and AAACP Coordination Unit Launched in September 2007, the operations of the EU-funded ‘All ACP Agricultural Commodities Programme’ (AAACP) came to an end in December 2011. Out of the total programme budget of 45M euros, a third was to be allocated to the cotton sector, in support of the implementation of the EU-Africa Partnership on Cotton. In actual fact, just over 16M euros and some 40 projects have been approved for the cotton component of the AAACP. The global objective of the AAACP is to contribute to poverty alleviation in ACP countries. In seeking to achieve these results, the AAACP has four main expected results: Firstly, it aims to train stakeholders of ACP countries/regions so that they are able to develop, adapt and implement sustainable sectoral strategies. Secondly, the programme assists in the implementation of priority interventions stemming from such strategies. Thirdly, it seeks to sensitize ACP stakeholders to the use of market-based risk management tools. Finally, the experience, complementarities and synergies of the five Programme implementation agencies (namely, CFC, FAO, ITC, WB & UNCTAD) are harnessed efficiently and to the benefit of the stakeholders. Strategy Development is the first objective the Programme has, with the technical assistance of ITC, covered all the African cotton-growing regions. These regional cotton strategies were formulated using a “value chain”
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approach focussing on the market, and a participatory process which involved major private and public stakeholders in the cotton sector at the regional and national levels. Bamako November 2011, implementation Plans associated with the strategies of UEMOA/WAEMU and ECCAS countries, as well as that of the Eastern and Southern Africa region, spearheaded by COMESA, were
Improving Productivity and Competitiveness. The AAACP has been contributing to improve the productivity and efficiency of the cotton value chains, with FAO testing and disseminating good agricultural practices (GAP) and integrated production and pest management (IPPM) methods in four West African countries: Benin, Burkina Faso, Senegal and Mali. Over 21,000 farmers and 400
presented to donors in attendance. To ensure that strategies which are formulated by stakeholders do not remain dead letters, the AAACP has earmarked funds to contribute to the implementation of some of the priority actions stemming from these strategies. The implementation of the three regional strategies involves a wide range of interventions such as;
extension officers have benefited from training through the farmer field school (FFS) approach, resulting in significant decrease in costs and use of pesticides, and increase in gross margins. It is through co-funding from CFC, and also using GAP/IPPM and FFS, the programme has targeted small-scale cotton producers in
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
The Cotton Component “All ACP Agricultural Commodities Programme” (cont.) Eastern Africa to assist them in increasing the yield and income derived from cotton production. This intervention has been conceived as a pilot project and its results will be analysed for replication in other small-holder cotton communities. In reference to productivity and competitiveness, FAO has under the AAACP assisted 15 cooperatives in Kenya and three producer associations in Zambia (total of 7 000 members) to upgrade their business model. The business model approach helps to understand where value can be added and how costs can be reduced and efficiency improved. FAO has also undertaken a comprehensive review of seed systems for cotton, cassava and crops grown in association for three countries in Southern Africa (Malawi, Mozambique and Zambia). Based on the results of the review, action plans have been developed for interventions to improve seed delivery systems. To enhance Competitiveness through Quality Partner International Organisations have been addressing the issue of the quality of cotton from different angles. Working jointly with CFC, the Programme has been promoting the commercial standardisation of instrument testing of cotton, with the establishment of Regional Technical Centres in Mali and Tanzania. This project, which has received €2.6 million from the EU through the AAACP and €3.9 million in co-funding (CFC and others), will help these cotton-growing regions to improve their testing systems and hence, enhance quality control of cotton lint. Several national labs have benefited from staff training in instrument testing, to bring them in line with international standards, while eight have also received equipment. FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Another component is the support of prevention of seed cotton contamination which has involved the WB, CFC and ITC. Under this five million euros project, some 27,000 producers, 140 extension officers, and 240 transporters were trained by the end of 2011. The World Bank focuses on strengthening institutional arrangements for the different commercial partners, while ITC contributes by linking cotton lint consumers (spinning mills) to “clean” cotton suppliers, a step further the ITC, Programme co-funded a film showing-casing how cotton quality is being ensured in Senegal, a model for others to follow. Building capacity of sector organisations is a major concern of the AAACP. Support has been provided to sector organisations like ACA and APROCA to improve their knowledge of markets, their understanding of buyers’ needs, of the cotton trade and marketing practices, notably through study tours to importing countries paired with training. For instance, the programme has supported ACA through ITC to, elaborate its 2011-16 strategic plans; establish its marketing commission, strengthen its links with members of the English-speaking zone and with ACTIF; and finally, build a new website. In the area of risk management, which is the third thrust of the AAACP, three types of activities have been supported: Risk assessments, to identify, quantify and prioritise major risks faced by the cotton supply chain - for instance for the cotton sector of Mozambique and Burkina Faso; Training of stakeholders, the goal being to help participants better understand and quantify price risk and to provide them with the knowledge and tools they need to better manage the effects of price volatility; The third activity involves transfer of capacity to partners in the
region who will continue the work now that the programme has come to an end. For instance, training courses on price risk management were held for the Eastern Africa region in Kenya, last July 2011, and in Burkina Faso for Western Africa in August 2011. The courses have been developed in a modular format, and adapted to the needs of the target population traders, ginners and producers’ associations. They have now been transferred onto an on-line learning platform which should increase their potential impact. In summary, besides its actual achievements on the ground, the AAACP has also generated a useful pool of knowledge about implementation of cotton-related projects. The lessons learnt from this implementation should prove relevant to other cotton-related support programme, including the new ACP-EU Programme for the African cotton sector, starting in 2012, with a total budget of EUR11M. By aiming at improving the competitiveness, added value and sustainability of the African cotton sector, this new programme supports the consolidation and extension of some of the activities outlined above and implemented under the EU-Africa Partnership on Cotton.
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The benefits of investing in carbon foot print mitigation’ project. By Danielle Wong, Director Mauritius Export Association (MEXA) Maurice Ile Durable (MID) Sustainable Mauritius was first announced in the budget 2008-2009 as a long term vision aimed at promoting sustainable development. The main thrust of the MID is to make Mauritius a world model of sustainable development. Reducing green house gas emissions and improving energy efficiency has never been higher up the business sector. Rising fuel prices mean that reducing energy use makes economic sense, while increasingly-compelling research about climate change means that sustainable industry makes social and environmental sense, too.
carbon economy. The awards celebrate Greater Mauritius' environmental innovation, economic development and vibrant communities. The Blue Carbon Award was founded on the belief that a strong personal commitment by decision makers in the private sector is crucial to the success of a low carbon economy and therefore deserves a special acknowledgement. Indeed, the Awards celebrate our sustainable successes, disseminate the lessons learned, and ensure that
good ideas can be implemented and reciprocated all over Mauritius. Being Blue carbon awarded will therefore help to put business in-step with future policies that will have a significant impact on both domestic and the wider marketplace. The Blue Carbon Award is the natural extension of the Mauritius Blue Carbon Label recently developed by MEXA in its endeavour to lead a carbon emissions reduction project (CERP), to help its members to understand the carbon footprints of the products, sites and services they use at the same time protecting the environment through a
While in major markets like Europe and the US, retailers are requesting sustainable products and customers are becoming sensitive about environmental sustainability, it is important for Mauritius to be recognized as being a green supplier and exporter. In this context, it was decided to launch a pilot project for industries in the export sector. Seven companies interested to embark on a Carbon Footprint program as part of their marketing and competitiveness strategy responded positively. MEXA (Mauritius Export Association) thus initiated the first ever Blue Carbon Award in 2010, in the aim of recognizing companies who carry out sustainability work and carbon mitigation in business practice in Mauritius. The Blue Carbon Awards are the first-ever awards in the African region to distinguish those who are leading the way to a low 12
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
The benefits of investing in carbon foot print mitigation project. (cont.) sustainable development of manufacturing processes and trade. Indeed, measuring carbon emissions at each and every step of the supply chain leads to valuable savings in terms of energy and costs whilst at the same time contributing to a cleaner, better world. Moreover, the promotion of carbon footprint through a recognized Carbon reduction Label will enhance brand reputation and sales appeal. In this line, MEXA has over the last two years hosted a series of workshops and seminars to guide export companies in their quest of carbon footprint reduction. MEXA held the first edition of the Blue Carbon Award Ceremony on Monday, April 18, 2011 in the presence of The Hon Devanand Virahsawmy, Ministry of Environment and Sustainable Development. Having demonstrated an absolute reduction of their footprint or equivalent to a relative efficiency improvement of more than 40%, the seven participating companies namely Consolidated Dyeing & Fabric Ltd, Ferme Marine de Mahebourg, FM Denim Ltd, RT Knits Ltd, T&T International Ltd, Tamak Textile and Poster Graphics proudly received their blue carbon certification. Four of the programs have been recognized as Blue Carbon Awards winners 2010. Activity Relative Winner: Ferme Marine de Mahebourg, Aquaculture Business Turnover Winner: Poster Graphics, Media, display and signs, Employee Relative Winner: Tamak Textile, T-Shirt printers, FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Absolute Reduction Winner: FM Denim, textile manufacturer The testimonials of the participating companies are quite encouraging and add to our belief that we can contribute to make our country sustainable.
Testimonials of participating companies: Emmanuel Tsang Mang Kin, CEO, Tamak: Like many others amongst us, I was not convinced of the need to participate in such a project at the beginning but I became convinced gradually. Tamak which manufacture the Citadel brand was awarded a Blue Carbon Certification and the Blue Carbon MEXA Award 2010. Such a success would not have been possible without the contribution of all the Tamak team under the leadership of our General Manager Mrs. Yan Hip. I make a point here to applaud Mrs. Yan Hip for her exceptional and continuous efforts. The Blue Carbon Certification is a step in the right direction because when we think about it, we are not only doing this for the benefit of our enterprise but to ensure the future of our children and our grandchildren.
Maxwell Cesar, Maintenance Manager, CDFL: It has been a great experience to participate in the Carbon Footprint Mitigation project. There has been significant work done during the past years to reduce our carbon emissions and cost of energy. This project has enabled us to quantify our emissions and position ourselves in the context of the MID. It is a good tool to identify sources of potential energy savings.
Ian Tin Fook, Director, T&T International Food Ltd: Our planet is drained; our needs in food products are continuously increasing and, our demand for energy has risen exponentially in the last few years. We have observed several climatic changes and natural disasters. The 'Carbon Footprint' concept ensures a sustainable development which takes into account the environmental inheritance which we shall leave to the future generations. Thanks to tools and indicators that enable, for instance, the measurement of polluting waste emission, firms can take concrete actions, with the help of green technologies, to preserve a healthy environment and ensure the durability of natural resources. T&T International Food Ltd is committed to play his part in contributing to MID.
Kendall Tang, Director, RT Knits Ltd:
This CO2 emission measurement and PCF assessment is very important because not only it gives us the possibility to compare our results with previous years but it also helps us to set objectives and implement measures, so as to achieve significant reductions. But at RT Knits we believe that we cannot focus only on carbon reduction, which forms part of the environmental aspect, but we have the vision of sustainable textile production which includes the social and economic aspects of our people and company! Some projects were implemented only for the benefit and comfort of our employees. For instance air coolers were placed so as to allow better working conditions. We would like to point out that garment manufacturing is a dynamic process and the product is becoming more complex, still we have been able to reduce our product carbon footprint.
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Carbon Footprint Chart
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
Towards a climate-smart African cotton value chain. By Godwell Nhamo, Professor and Programme Manager, Exxaro Chair in Business & Climate Change Insititute for Corporate Citizenship, University of South Africa.
There exists a number of risks and opportunities for the African cotton value chain associated with climate change. It is paramount that the twin value chain segments including cotton (growers, ginning and trade) and textiles (yarn, textile, wholesale and final consumer) be acquainted with regards to the regulatory, physical and reputational risks linked to climate change. Knowing the climate associated risks for the cotton value chain means the sector could be more prepared and work towards being climate-smart. This is a language that raises the bar in terms of moving towards emitting less greenhouse gases (GHGs) that cause global warming leading to climate change. The value chain produces GHGs either through direct emissions from the supply chain or through energy demanded in the production, transport and disposal systems. At a global level, leaders have accepted that the challenges associated with human induced GHGs are real and cannot be wished away. To this end, in 1997 a global treaty known as the Kyoto Protocol was put in place. The Kyoto Protocol has provisions that compel 37 rich nations to collectively reduce their GHGs by an average 5.2% between 2008 and 2012 based on 1990 GHG emission levels. This is the reason why world leaders have been battling since the Bali Climate Change Summit in 2007 (COP13) to have a second Kyoto Protocol commitment period in place for 2013. This did not happen until the Durban Climate Change Summit (COP17) that took place in South Africa late 2011. FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Once we start talking of the Kyoto Protocol, the debate for the value chain shifts into the regulatory risk environment, especially at the international level. From Durban, world governments agreed that a 2nd Kyoto Protocol commitment period be put in place from 2013-2015 after which a global treaty including developing countries like the cotton producing African block will be put in place allocating GHG emissions caps by 2020. Since Copenhagen 2009, emerging countries like Brazil, China, India, Mexico and South Africa pledged to reduce their emissions voluntarily. As of January 2012, China and South Africa were deliberating on solid proposal on carbon tax systems. Other countries including Australia and the UK are among front runners in the developed world. Looking into the future, carbon wars are very much in site with possibilities of trade-for-carbon and aid-for-carbon bilateral treaties at arms lengths. This is an element that could harm the value chain. The value chain’s bottom line could be negatively impacted in the future. A study on Australia’s proposed carbon tax by Cotton Australia has great insights. Cotton Australia indicated that a model 400 hectare irrigated cotton farm would incur a total annual cost increase of 0.6%. This translated to $9,243 if the carbon tax was implemented. This was additional to annual costs and resulting in a reduction in farm net income of 2.1%, in the first year under a $23/t of carbon dioxide equivalent of emissions. Under other scenarios, the same model farm cotton businesses could by 2015
experience a total annual cost increase of 1.2%, amounting to $18,003 additional annual costs, and a reduction in farm net income of 3.2%. On-farm additional costs would comprise 60% of the total cost increase. Globally, consumers are increasingly becoming aware of their responsibility to be greener and force the value chain to respond. Given that the global value chain is not dominated by Africa, consumers have the choice to look to other suppliers for low carbon and greener value chains. Among the competitors for Africa in the value chain are Australia, Israel, Syria, Turkey, Spain, Mexico, China, Brazil and the United States. Hence the quicker the movement by the African Cotton Textile Industries Federation (ACTIF) towards a climate-smart value chain, the better. Moving towards a low carbon and greener African cotton value chain will bring opportunities, especially those associated with international trade. This could also enhance understanding during the international climate negotiation session. So, what should the ACTIF value chain do to address the challenges from climate change? The ACTIF must both adapt to and mitigate against climate change. Linked to these twin pillars associated with climate change are cross-cutting aspects including climate financing, negotiation, technology as well as capacity building and awareness raising. The ACTIF should also get involved in these cross-cutting issues.
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Towards a climate-smart African cotton value chain. (cont.)
local/indigenous and scientific knowledge systems, awareness raising and knowledge sharing, as well as market intelligence and in-service training of extension workers. The ACTIF might also decide to collaborate with research institutions and universities in mainstreaming climate change into relevant agricultural curriculum.
Put in simple terms, climate change adaptation addresses how the value chain learns to live with the changing climate – coping strategies. Climate mitigation refers to how the value chain put in place interventions to reduce GHGs. Hence the adaptation agenda means the value chain should be aware of the risks associated with changing rainfall patterns and temperature regimes, episodes of extreme flooding, cold and heat, fire hazards and many
With regard to mitigation, the value chain might consider starting work on drawing up a Cotton Value Chain Carbon Calculator (CVCCC or CV3 if one so wishes). This is not a task unachievable taking note of similar initiatives in the wine and fruit industry both nationally and globally. A CV3 could be done for the ACTIF as a whole with follow-up country specific carbon calculators. This gesture of forward looking will assist
more impacts. Work towards coming up with reliable risk and vulnerability atlases and possibilities of re-thinking agro-ecological zones in Africa could be one excellent long-term project. Other interventions could include Weather Based Index Insurance, cultivar substitutions, improved irrigation systems, migrating to new cotton growing areas, use of ICT (particularly the mobile phone and community radios) in early warning systems, ongoing documentation of micro-climates, harmonisation of 16
in bringing the ACTIF to speed with the demands of a future low carbon and greener global cotton value chain. Once the CV3 is in place, work on the value chain carbon footprint could begin. A carbon footprint refers to a measure of GHG emissions in order to determine how much an organization like and individuals contribute towards climate change. The ACTIF cannot manage what it cannot measure. Hence drawing up a carbon footprint
becomes the entry point in reducing GHG emissions. Knowing the ACTIF carbon footprint and also respective domestic carbon footprints for the sector will assist the associations in pinning down intervention measures. Much of the emissions are associated with energy consumption (especially dirty electricity), transportation and use of fertilizers and herbicides. Interventions in this regard could witness initiatives towards the extensive use of organic fertilizers as in Mali and substitution of fossil based electricity by solar and wind energy, extensive use of bio-fuels as well as greening the value chain logistics and procurement. The Greenhouse Gas Protocol is the commonly adopted protocol for carbon foot printing. In drawing up a carbon footprint, it is necessary that general fundamentals in (carbon) accounting be followed that include transparency, verification, relevance, completeness, consistency and accuracy be adhered to. The ACTIF could also actively and continuously engage with the global climate change negotiation agenda. This will assist in shaping bottom-up new generation climate-smart agricultural policies. The most effective way of doing this is to have effective and informed representation in national climate change negotiation teams. It is at the national level where the domestic climate policy agenda that shapes both the African and global climate agendas is developed. Representation in stronger global business associations such as the World Business Council for Sustainable Development and the global cotton value chains association also help in understanding the trends by ACTIF. A climate-smart African cotton value chain is all we need into the future! FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
CTA conference with a difference: Taking the next leap. By Dr. Isabella Wandaka, Chairperson. Fashion design and marketing Kenyatta University.
The International Cotton, Textiles and Apparel (CTA) conference was held on the 1st to 4th November 2011 at the North Coast Beach Hotel, Mombasa Kenya, inaugurated by Prof. Olive M. Mugenda, Vice Chancellor Kenyatta University. The conference theme was addressing; issues impacting the competitiveness of the cotton, textile and apparel value chain in Eastern Africa: Exploring opportunities for trade, capacity building and investment. Objectives of the conference were; to bring together stakeholders in the CTA sectors from Africa and other continents to share experiences and benchmark Africa’s competitiveness with the rest of the world, assess existing polices related to trade in the CTA sectors and identify gaps that needed to be addressed, assess institutional gaps in skills development and enhancement in sectors in Africa vis-à-vis the international standards. Representation at the conference was from across the entire CTA value chain including cotton farmers associations, ginners, spinners, textile companies, mass production garment manufacturers, fashion designers, Government institutions, FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
international development organizations, scholars, students, national and international subject matter experts. This synergy is instrumental in the development of action oriented policies to mitigate the existing training and education gaps in Africa’s CTA sectors. Enhancing quality of products to promote trade starts with the quality of designs and runs through production processes to packaging and delivery. Key area of achieving quality of products is through education and skills development. During deliberations, it became clear that the present workforce within the CTA value chain lacked the requisite skills and training to perform as per expectations, in areas requiring efficient farm practices, yarn preparation through to manufacture. An example of areas requiring immediate intervention is fashion
design training that has a direct impact in form of improved quality of products for the export market. As well as to manage business’s well to ensure profits earned are not lost through business mismanagement, provide and maintain consistent quality products/ service, network so as to create market linkages, form associations and become members of relevant organizations like ACTIF, for advocacy with different arms of Government in order to address challenges related to infrastructure, finance (high taxation) and creation of an enabling environment for commerce. A major outcome of the conference was the fundamental need for partnerships through collaborations and aggressive research work by the universities and research institutions. The academia will enable the CTA sector to adapt to an increasingly and continuously changing business environment, in both technology and innovation. Also identified was the major role of universities to conduct research and market surveys on sustainability and feasibility of industry initiatives. Through fashion show contests held by universities
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Features
A CTA conference with a difference: Taking the next leap. (cont.) such as a recent biotechnology fashion show contest held at Vera Beauty College (sponsored by the National Council for Science and Technology (NCST) and the International Service for Acquisition of Agri-biotech Applications (ISAAA), universities like Kenyatta, Moi Maseno and Kenya Polytechnic moreover showed how best they can provide the critical links between the academia and the fashion industry. There is a great need for all CTA stakeholders to work in partnership, toward the promotion of training institutions, and support programmes on offer with required infrastructure. If, in the spirit of partnership, CTA industries offer opportunities for hands - on experience to training institutions, and if the industries become more involved in curriculum development (unfortunately, this has not been the case in the past for Kenya), then the training institutions will be empowered to produce large numbers of trainees each year, in line with CTA sector demands. Development of training institutions’ capacity to provide current training programmes is important and achievable through strengthening the existing training centers and programmes to adhere to international best practices. Awareness should also be created within the local CTA value chain of regional training programmes and institutions. This in turn eliminates the current trend of duplicated courses within middle level colleges and universities. Thereafter promotion of regional training programmes to potential international buyers should follow. Improving skills of the workforce needs to be addressed possibly through collaboration with international institutes in identified areas. Building of human resource capacity calls for crucial inputs from the CTA sector at regional level with all stakeholders across the value chain intervening to ensure enhancement of workers skills (which leads to efficiency) is addressed accordingly. At the moment, the current infrastructure 18
provides for very few institutions with limited capacities, and strangely enough, some of these institutions also experience limited enrolments for the training facilities available. In summation of the conference deliberations, it emerged that the East African Community (EAC) region has the potential to compete with the best in the world. A strategic plan for the sector, with specific activities and timelines, was recommended as a must have for the sector to play its role in the realization of Kenya’s vision 2030 development goals. The conference set the right path for revival and revitalization of the CTA sector, not only in Kenya and EAC region, but also to the whole of Africa. Revival allows the sector to benefit tremendously from the increased consumer spending in the EAC region, increase in focus of global investors in cotton growing areas. Growth of CTA sector in the region will be enhanced further through the region’s continued enjoyment of the preferential market access to the USA under the African Growth and Opportunity Act (AGOA) and Europe, under Economic partnership agreements (EPAs). The conference offered a golden opportunity for EAC educational institutions, and related international institutions, to identify areas of collaboration for knowledge sharing, and initiation of exchange programmes for capacity building. It is therefore vital that a
comprehensive review of existing educational and training frame-work be put in place, in order to develop a revival and revamping strategy of the CTA sector. A participant at the conference from the academia, who has been a trainer for decades within the CTA value chain, summed it all as follows: “With what I’ve heard in this conference, I’ll now conclude my guidance and counseling consultancy and resume my career as a trainer within the CTA value chain.” Mr. Migwi, a cotton farmers’ Association representative from Tana River had this to say about the conference: “We farmers have all along thought that we have long been forgotten. For us to come here and share a venue with the kind of delegates we have seen here, and to be given a chance to voice our concerns and be heard not only by the Government, but also by other key stakeholders within the value chain across the globe.”
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
International Cotton, Textile & Apparel Conference for East Africa: Key Outcomes. Harminder Sahni Managing Director, Wazir Advisors.
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
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Features
International Cotton, Textile & Apparel Conference for East Africa– Key Outcomes
Enhancing quality, production and
being conceived. Our role was to
designs to promote trade through
develop the concept paper for
education and skill development and
conference, identification of experts
Building competitiveness and
as speakers and delegates,
branding Africa-Strategic
development of the Conference
interventions & Policy initiatives to
program and finally develop the
create a niche for African CTA value
post-conference action and
chain.
implementation plan. The assignment was indeed a very
The conference was structured to
interesting one where we could
take a practical approach to yield
leverage our experience of CTA
The first International Conference for
solutions to the issues that CTA
sector assignments in different parts
East African cotton, textile and
sector in East Africa is facing today.
of the globe for the successful
apparel (CTA) value chain to develop
There were 4 distinct components
coordination of the event.
competitiveness was organized in
on which the conference was built,
In addition, we got the invaluable
Mombasa, Kenya from 1st to 4th
they were: Presentations by national,
chance to connect with several CTA
November, 2011.
regional and international subject
value chain stakeholders of EAC.
matter experts; Panel discussions
From the understanding developed
The conference was organized by
involving value chain stakeholders;
in the conference about the
Kenyatta University, African Cotton
Technical paper presentations and
challenges in sector along with our
& Textile Industries Federation
Break-out sessions on each of the
expertise, Wazir Advisors finally
(ACTIF) and Kenya Association of
subthemes wherein all of the
presented the recommendations in a
Manufacturers (KAM), whereas my
participants shared their experience
stakeholder consultation meeting at
firm, Wazir Advisors was the
and gave their feedback regarding
Kenyatta University on 17th Feb,
Conference Knowledge Partner. This
issues and their solutions.
2012.
conference was attended by more
Functioning as the Conference
than 150 speakers and delegates
Knowledge Partner, Wazir Advisors
The key outcomes for each of the
from 18 countries across the globe,
was involved in the Conference
themes that were proposed are
representing the entire CTA value
when it was in the initial phase of
briefed in following text.
chain, government institutions, international development bodies and international subject matter experts. The theme of the conference was “Resolving issues impacting the competitiveness of the CTA value chain in Eastern Africa: Addressing opportunities for trade, capacity building and investment” with the 3 sub themes: Developing the Cotton sector in Africa-Enhancing cotton productivity and fiber quality by addressing gaps for good agricultural practices and developing Bt Cotton for enhancing production;
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Theme 1: Building capacity to deliver vocational and management training that meets CTA industry needs African CTA sector has huge potential to grow within the next 10
!
years. One of the major hindrances in realizing the potential is the
2.Development of industry &
3.Collaboration with industrial
manpower challenge. Development
academia interface
institutes
of a strong training and education
Interdependence between industry
For improvement of educational
mechanism is vital to provide skilled
and academia should be intensified
institutes in East Africa, collaboration
and trained personnel for
to establish so as to create a
of East African and International CTA
employment to meet the needs
win-win situation for both.
institutes is recommended for
across the CTA supply chain. For
The idea is to facilitate better
knowledge student exchange
this, the following interventions were
coordination between industry and
programs.
proposed:
institutions where academia gets
This model aims at strengthening the
support from industry and industry
existing institutes, increasing
1.Review of existing
has a say in academic/training
visibility to African institutes in global
educational and training
programs so that they get the right
CTA sector, increasing interest of
education delivery framework and
manpower. This will also increase
students to pursue a career in this
availability of trained manpower as
interest of students to pursue a
sector and availabilty of better
per industry requirements.
career in this sector.
skilled manpower to industry.
framework A comprehensive assessment of current CTA training and education sector need to be carried out which will be benchmarked against the global best practices to understand the gaps in the current system. This would result in prioritizing of activities that are needed to be done for upliftment of institutes, improvement in quality of training &
4.Business incubation center for grooming entrepreneurs Business incubation center would help in grooming the entreprenuers through various business support resources and development of an enterprise. This would foster the community's entrepreneurial climate, accelerate growth of local industry clusters, encourage women or minority entrepreneurship and reduce the
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
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investment for entrepreneurs to test
needs to be devised.
their business ideas.
This will help in improving the availability of right equipment at right
practices, better equipment, etc. 4.Integrated Pest and Irrigation
Theme 2: Developing and
Management
Delivering Regional Good
An integrated pest
Agricultural Practices
and irrigation
One of the key issues that emerged
management scheme
during the discussion was that
infrastructure needs
despite having vast arable land, the
to be developed at a
cotton production in the region has
central body for
remained low because of low farm
testing & data
yield levels.
monitoring.
The quality of fiber had also shown
This would result in
inconsistency and had become a
time to the farmers, resulting in
availability of proper information about
major issue in recent past. Though
improved farm practices and
farm conditions and information flow
steps have been taken by various
introduction of advanced technology.
to farmers regarding irrigation,
bodies which are under different
It will also enhance the farm
application of pesticides, fertilizers,
stages of implementation, but still a
productivity, resulting in better
etc.
lot remains to be done. To improve
earnings for farmers. 5.Support for development of
the situation, it is important to uplift the agricultural practices which
3.Formulation of subsidy and
better seed varieties
could be done through following
credit schemes for cotton
To facilitate the R&D process for
interventions:
cultivation An umbrella scheme for
1.Establishment of support
farmers should be
centers in cotton growing areas
developed to overcome their
A central cotton support institute
liquidity constraints and
and satellite centers in different
ensure investments in
cotton growing areas can be set up
improved technology and
that will work in coordination with
equipments.
different centers to provide the
This would facilitate credit availability
development of better seed varieties,
farmers with support services.
to farmers which will help them in
the existing infrastructure needs to be
This would result in establishment of
buying the necessary equipments
upgraded which can be done either
an infrastructure with a wide reach
required for cultivation. With the
through the funding support from
that can provide support services to
availability of finance, the farmers will
government or partnership with
cotton growers. Also, it will provide
be in a position to adopt better farm
international institutes.
the farmers with improved extension services for improving cultivation. An information dissemination mechanism will provide adequate agricultural information to the farmers. 2.Development of schemes for tools and equipment leasing A model for leasing out the required tools and equipment to farmers 22
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
This would lead to improvement in
Conclusion
existing institutes and processes
The interventions that are proposed will
resulting in better results.
help build conducive business environment where the value chain can
Theme 3: Positioning African
function more efficiently and deliver better
Producers to Capitalize on
results. Though all interventions are
Emerging Niche Markets
important but those which are more
Inadequate focus on value addition,
encompassing in nature and have a far
lack of awareness about niche
reaching impact can be prioritized over
market, insufficient technical and
others, as per the resource availability.
marketing know-how and low level of investment in the sector have led to
After an in-principle approval from the
restrained market growth in the
authorities or support agencies, careful
region. For addressing these
selection of implementing partners for
challenges, following interventions are
each of the interventions needs to be
proposed:
explored so that the implementation is put on fast track, in a focused manner.
1.Establishment of a “Development Center for Niche
It is also worthwhile to mention here that
Markets�
out of some of the proposed interventions,
At present the awareness among
next steps have already started happening
entrepreneurs about niche market
for some of these by the efforts of ACTIF
products is quite low in terms of
and regional institutes. I have no doubts
opportunity and strategy to enter this
about the potential of region in the CTA
category. So there is a need to
sector. However, going by the global
establish a development center for
learning, it is very critical that EAC
niche markets. This would result in
countries start looking inwards and take
increased awareness about niche
remedial steps at the earliest.
market and products among the African entrepreneurs, creation of an institute that can mentor interested entrepreneurs for venturing into niche products and attraction of more investment in the segment. 2.Indigenizing the domestic supply side of CTA value chain In order to tap domestic market opportunities and to niche export markets, it is of utmost importance that the CTA supply side be indigenized. This will lead to increased awareness in the industry about the opportunities available in the domestic market and different ways to tap them, development of a local manufacturing base and development of domestic supply side. FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
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Features
China’s Textile Industry in Africa By Mr. Wang Tiankai, President of China National Textile and Apparel Council (CNTAC) “Go global” is an important development strategy of China’s textile industry. With the deepening of economic globalization, we have found an effective way to open wider to the outside world and actively participate within international marketing. It is through expediting the allocation of transnational resources to optimize the combination of textile capital and superior resource factors in other countries and regions. Africa, with its active economy and growth potential, is attracting profound attention of international organizations and main economies of the world. Given the labor and resource advantages, the region is becoming one of the key destinations for Chinese textile enterprise market expansion. Besides the Chinese government aided textile mills, spinning and clothing factories invested with Chinese textile capital are also increasing in Africa. Mali, Ethiopia, Tanzania, Zambia…have become the important choices for Chinese textile investors. The vast market and affluent resources in Africa make it a land of promise for textile industry. In the past two year, China’s textile and apparel exports to Africa witnessed an annual growth of 25%, indicating Africa’s great market potential. Meanwhile, its high-quality cotton, plenty of labor, land resource and the priority policies and measures taken by African government to
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support textile industry motivates more Chinese enterprises to invest in Africa. The traditional friendly relationship of the two nations provides important political and cultural foundation for Chinese enterprises to go to Africa. With the deepening of China-Africa economic and trade cooperation, China’s textile capital would enter Africa at a faster speed, larger scale and higher level in the future. Currently, value of newly-added fixed-asset investment of China’s textile industry is USD 100 billion. Restructuring of China’s textile industry in the global landscape will bring huge development opportunities to developing countries including Africa. In recent years, Chinese government has always been striving for a better external environment for Chinese enterprise “go global”. Last year, China signed the agreement with four African countries including Benin to strengthen cooperation in cotton production and connection in cotton value chain. China’s textile associations would continue to enhance communication and cooperation with African counterparts, exchange information and conduct business visits to improve understandings and interests of Chinese textile entrepreneurs towards Africa, and further encourage Chinese textile capital to Africa. 2000 years ago, Maritime Silk Road of ancient China reached Africa and paved the way for China-Africa economic and cultural exchanges. Today, the cooperation’s, mutual-benefits and win-win deals embrace within the framework of economic globalization creating more favorable circumstances for the China-Africa Sick Road in New Age. It is my belief that as our communication and understanding goes further Chinese textile enterprises would seek more business opportunities in Africa and facilitate African economic and social development. FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Features
The Role of Bt-Cotton Technology for Kenya’s Cotton Production By Dr. C.N. Waturu, Center Director Kenya Agricultural Research Institute Cotton (Gossypium hirsutum L.), is one of the cash crops grown by small scale farmers and is important in Kenya as a strategic cash crop in low rainfall and most of the semi-arid areas covering about 87% of the landmass and home to about 27% of Kenya’s population. Cotton production trend in Kenya took a down turn since 1985/86 when an all time high of 70,000 bales was produced nationally dropping to an all time low of 20,000 bales by year 2001. A poor agronomic practice which was occasioned by the high cost of inputs and lack of credit to cotton producers was one of the main reasons leading to the collapse of cotton production in the country. At the top of the agronomic practices was pest control where the most damaging and earliest pest at the reproductive phase of cotton is the African bollworm (Helicoverpa
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
armigera Hb.). The African bollworm alone can cause up to 100% yield loss, if un-checked. Cotton is also attacked by other important pests including the cotton stainer (Dysdercus spp.), cotton aphid (Aphis gossypii Glov.) and cotton red spider mite (Tetranychus teralius L.). Use of synthetic pyrethroids targeting the bollworm in cotton, lead to serious explosion of aphid and mite populations. IPM-chemical, cultural, biological and use of resistant cultivars are best for control of cotton pests. Pest control and related activities take up about 32% of production costs. Introduction of transgenic Bt-cotton will indirectly lead to better control of the sucking pests while increasing activity of natural enemies. The transgenic Bt-cotton will lead to reduced spraying with pesticides hence reduced environmental pollution and minimal deleterious effects on non-target organisms and
human beings. It will also decrease the chances of development of resistance and cross resistance to pesticides. The overall effect will therefore be increased net returns on cotton production for the farmers. The transgenic Bt-cotton is a cotton plant genetically engineered to insert cryIAc gene either singly or in combination with cry2Ab2 gene making the plant resistant to damage by the African bollworm. The two genes are from a soil dwelling bacterium known as Bacillus thuringiensis subsp Kurstaki. The protein toxins CryIAc and Cry2Ab2 expressed in the engineered plants are toxic to key lepidopteran pests including the African bollworm, the most important pest of cotton in Kenya. The proteins used for over 30 years in commercial foliar spray formulations of Bt are made much more persistent and effective when genetically engineered into cotton plants. Bollgard I® (BGI) contains cryIAc gene inserted via genetic engineering techniques. Bollgard II® (BGII) containing cryIAc and cry2Ab2 genes was generated through the re-transformation of Bollgard I® by inserting cry2Ab2gene. To achieve the stated objective of introducing transgenic Bt-Cotton to make pest control more efficient, the Kenya Agricultural Research Institute (KARI) through its Institutional Biosafety Committee (IBC) forwarded to the National Biosafety Committee (NBC) an application to introduce Bollgard I® cotton seeds of variety NuCotn 35B containing cryIAc gene in February 2001. The application was approved in February 2003. The seeds were used for screen-house tests to establish the direct or indirect effect of CryIAc protein toxin in the cotton plants on 25
Features
Trichogramma spp., cotton aphid (A. gossypii) and its efficacy on African bollworm (H. armigera). The NBC and the Kenya Standing Committee
the importance of the African bollworm. To achieve this, a taskforce comprising of 12 members representing stakeholders from public and private sector was formed to oversee commercialization of the transgenic Bt-Cotton. The taskforce was to put in place systems that would address issues of input supply, operations, distribution and marketing that would support the delivery pathway of the transgenic Bt-Cotton seed in Kenya. The commercialization process entailed a
3. Establishment of key research areas necessary after confined field trials. 4. Formation of an outreach and stewardship secretariat and consequent identification of outreach and stewardship activities, channels, target stakeholders, priority regions and implementing institutions. 5. Identification of business partners, seed production areas, acquisition / production modalities and acreage for initial planting, drawing up tentative business
on Imports and Exports (KSTCIE) approved importation of more Bt-cotton seeds of transgenic varieties DP404BG and DP448B and isolines DP4049, DP5415 and DP5690 in December 2005. The aim was to establish the efficacy of the CryIAc protein on the lepidopteran insects under field conditions where pest pressures were experienced. The confined field trials were initiated in December 2005 at KARI-Mwea. The application to introduce Bollgard II® cotton containing cry1Ac and cry2Ab2 genes was forwarded in March 2007 and approved in April 2007. The rationale of shifting from Bollgard I® to Bollgard II® was that Bollgard I® was being phased out as the two genes in Bollgard II® offered better control of lepidopteran pests and better management of resistance. Commercialization of the transgenic Bt-cotton became critical because of
three phased plan comprising initiation, strategy and implementation. The taskforce commenced its work in July 2010 by first identifying five focal points of discussion subsequently forming five subcommittees for each focal point. Specific terms of reference and timeframes were drawn for each subcommittee to guide through the deliberations. The subcommittees worked within their mandates reporting back to the taskforce their outputs. The taskforce has realized major achievements including; 1.Establishment of mandatory tests required before clearance for open release and protocol development for the same. 2. Establishment of National Performance Trials for cotton varieties targeted for transformation i.e. 06K485, 06K486 and 06K487 which are ongoing.
models for seed multiplication, processing and distribution. 6. Establishment of demonstration sites for the varieties earmarked for transformation in various parts of the country. 7. Setting up of commercialization and product launch timelines. With the necessary legal framework now in place, commercialization of the transgenic Bt-cotton is envisaged to take place towards end of 2014. With the onset of commercialization cotton production levels in the country will be expected to increase exponentially in the same lines of India and Burkina Faso. This will make Kenyan cotton farmers, spinners, textile manufacturers and the national economy laugh all the way to the bank.
The Role of Bt-Cotton Technology for Kenya’s Cotton Production (cont.)
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Features
Improving Cotton Production Efficiency in Small-Scale Farming Systems in Kenya through Better Vertical Integration of the Supply Chain By Anthony Muriithi. Head of Planning Cotton Development Authority (CODA.) This is a four year pilot project executed by CABI Africa (Project Execution Agency, PEA) with Kenya Agricultural Research Institute (KARI) as the Project Implementing Agency (PIA) while collaborating with CODA. The project is supervised by the International Cotton Advisory Committee (ICAC) with funding coming from the Government of Kenya (GOK) the Common Fund for Commodities (CFC). The project commenced in December 2009 and is due for completion in December 2013.
The development and pre-testing of questionnaire for the first activity (baseline survey) was done and baseline surveys undertaken in Lamu West, Tana Delta, Baringo North, Tharaka South, Kathonzweni and Kitui Central districts from the months of May to July, 2010. Survey data was analysed and a report compiled. This gave a platform for comparing farmers existing agricultural production
from the six districts. Two training for trainers’ workshops on “Cotton Integrated Crop Management (ICM) and Farmer Field School Methodology” were held at East College, Embu from 16th to 26th August, and in Lamu between 15th and 26th November, 2010. Thirty eight facilitators (trainees) mainly from the extension staff of the Ministry of Agriculture (MoA), private sector service providers and from Cotton Development Authority (CODA) participated. Resource persons were sourced from CABI, MoA, CODA and Kenya Agricultural Research Institute (KARI)
Project Aims; Improve During the short rains season of profitability and (Sept/Oct 2010) fifteen farmer competitiveness of small field schools were established in holder cotton production. Tharaka South, Kathonzweni and Improve sustainable Kitui Central Districts. The farmer supply of seed cotton to Participatory Technology ginners. Improve cotton Development (PTD) plots were management practices planted in October 2010. Farmer (ICM), through on farm mobilization and formation of demonstrations and another 15 farmer field school establishing farmer field Participants from Baringo North, Tana Delta and Lamu West attending a ToT groups commenced in December schools workshop on Cotton ICM and FFS methodology at Lake Kenyatta ATC ,Lamu 2010 in Lamu West, Tana Delta, (FFS).Strengthening and and Baringo North districts. The building linkages within second phase of Training of Trainers for the value chain(farmers, input stockists, all the pilot districts was successfully ginners, spinners and transporters) to and post harvest handling practices with conducted in 2011 and formation of ensure access to inputs, technologies the current crop production and more farmer field schools has been and information. protection recommendations and accomplished as a result of this initiative. practices. This information was used in Activities undertaken; An inception indentifying gaps and training needs. Conclusions and Recommendations; stakeholders’ workshop was held and This formed the basis for determining It is apparent the project is catalyzing attended by key stakeholders in the appropriate topics and consequently the improvement in cotton productivity. cotton industry that included the development of Integrated Crop With the farmers’ empowerment through regulator CODA, KARI, CABI Africa, the Management (ICM) Modules and a TOT the FFS groups, farmers have been able Business Initiative for Survival and training curricular for facilitators and to take advantage of economies of scale Eradication of Poverty (BISEP), Bayer, extension providers to facilitate to access information, markets among farmer representatives, (KCGA) Kenya participatory learning in the farmers’ others. The groups formed focal points Cotton Ginners Association, Monsanto, fields. for delivery of input and credit supply HAWESA, Ginneries, weavers, extension and technical support. In addition this services providers, farmer group will pave way for the implementation of co-operatives and other relevant Participants from Baringo North, Tana the proposed cotton pilot schemes government agencies, on 30th March Delta and Lamu West attending a ToT 2010. workshop on Cotton ICM and FFS A technical planning meeting to draw up methodology at Lake Kenyatta ATC an activity schedule for the year was held ,Lamu on 31st March 2010 between The trainers for the various field schools CABI/CODA/extension services were identified by the District Crops stakeholders and KARI. Officers of the Ministry of Agriculture
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Features
Regional clothing Project: ACFRN: A study on, Chinese ascendancy in the global clothing industry, its impact on African countries.
03 Readers comments 16 Status Report on campaign By Professor Dorothy McCormick, third-country fabric provisio Director of the Institute for Development Studies, University of Nairobi 19 Building Synergies to enhan 24 Pictorial Country Profile: The overall objective of the study is to 26 understand the Ethiopian te African Clothing and Footwear Research Network 28 Special Focus: Nigeria ways in which Chinese ascendancy in the global clothing (ACFRN), established in 2001 under the Institute for 47 Global Perspective: industry interacts with African countries’ clothing sector New Tre Development Studies (IDS), University of Nairobi is a Network of clothing and footwear researchers in Africa. From its inception, ACFRN has maintained a two pronged approach in its activities: it is both academic and oriented towards policy and practice. The network has not only aimed to carry out and publish academically sound research studies, but has also involved policy makers and industry players in shaping its activities. ACFRN is governed by a secretariat at IDS, (University of Nairobi) and at the country level, by country coordinators. Current research project In the year 2010, the Institute for Development Studies – University of Nairobi (IDS-UoN), through ACFRN, received a research grant for two consecutive years from International Development Research Centre (IDRC) to undertake the study: Adjusting to Chinese Ascendancy in the Global Clothing Industry - Dimensions, Variations, Sources and Limits of Post-Multi-fiber Agreement (MFA) Stabilization in African Clothing Exports. The study, is a detailed country-level analysis, and is presently being undertaken in seven African countries, namely: Ethiopia, Kenya, Tanzania, Lesotho, Swaziland, Madagascar and Mauritius; and, it is utilizing the services of researchers based in each of the countries under the umbrella of ACFRN. The ACFRN member countries are Kenya, Ethiopia, Tanzania, South Africa, Mauritius and, Madagascar.
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capabilities (industrial specialization, resources, policy, and innovation) and available trade preferences to determine the extent of Post-MFA stabilization. Specifically, the study seeks the following; To explain the nature of Chinese ascendancy in the global clothing industry and analyze the key features, patterns and developments in each study country’s clothing exports to United States of America (USA) and European Union (EU),To analyze the extent to which differences in country exports are explained by the nature of industrial specialization, local resources, industrial policy market destinations and, innovation, to identify in a participatory manner, the sources and limits of post - MFA stabilization in the clothing industry in each study country, To provide and use the evidence gathered to inform policy dialogue on the development of trade and industrialization strategies and in negotiating institutional arrangements such as African Growth and Opportunity Act (AGOA), Economic Partnership Agreements (EPAs), World Trade Organization (WTO) rules and, bilateral agreements with China, To train researchers in the area of clothing and textile research within ACFRN. The study is expected to be finalized in March, 2012. Below are some preliminary findings of this study, affirming the Chinese ascendancy in both the US and EU markets, as can be seen in Figure 1.
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Features
Regional clothing Project: ACFRN: A study on, Chinese ascendancy in the global clothing industry, its impact on African countries (cont.)
Figure 1 This ascendancy is to a large extent as a result of the MFA removal. However, the MFA removal has affected some African countries more severely than others. For example, the impact on Kenya exports is relatively mild compared to impact on Lesotho, Madagascar and Swaziland as can be seen in Figure 2.
Post – MFA exports to US
Figure 2 In addition, these countries have their clothing exports concentrated in a few products (top 5) as illustrated in Figure 3. For example, Kenya and Lesotho have heavy concentration on few products to renewwhich AGOAmakes them vulnerable, but Mauritius and Madagascar on show a little more nce competitiveness diversification. Therefore, these countries need to diversify more extile and as apparel a way sector of warding off competition from China.
ends in the World Textile Market
Figure 3 The secretariat is composed of the International Coordinator (Prof. Dorothy McCormick) and a Project Assistant (Ms Carol Gatimu). In addition, the network has two resource persons namely: Prof. Mike Morris (South Africa) and Dr. Peter Gibbon (Denmark). The following are the ACFRN countries, institutions and researchers:
International coordinator: Prof. Dorothy McCormick •Kenya: Dr. Paul Kamau, Dr. George Michuki, Dr. Daniel Abala, Ms Carol Gatimu, Institute for Development Studies, UoN •Tanzania: Dr. Andrew Mbwambo, Mr. Makuru Ngemba, Business School, Mzumbe University •Ethiopia: Prof. Tegegne Egziabher, Regional and Local Development Studies, Addis Ababa University •Mauritius: Dr. Harshana Kaseeah, Dr. Vinaye Ancharaz, University of Mauritius •Lesotho & Swaziland: Prof. Mike Morris, Mr. Rob Stewart, University of Cape Town •Madagascar: Dr. Arielle N’Diaye, Prof Emilienne Raparson, CERED
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Investing in Sub-Saharan Africa's cotton, textile & apparel sectors. “The time for Africa is now” By ACTIF
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The time for Africa is now. There is an urgent need and tremendous opportunity for investment in sub-Sahara Africa’s (SSA) cotton, textile and apparel sectors. A number of international research organisations and sectors have pointed out the advantages of investing in Africa. Africa today promises the highest return on investment and its GDP is predicted to double in the next 10 years. China for example, has proven to the world the potential of developing a full value chain from fiber to fashion. Despite having a huge population, it is not only able to clothe itself but also the rest of the world. This has resulted in massive job creation, strengthening the overall infrastructure and support institutions, significantly boosted its national income and generated much needed tax revenues to the government. However, costs in China are rising and apparel retailers and brands are looking for alternate sourcing destinations. Many of the leading global apparel buyers are turning their attention to Africa because of the duty free/quotas free privileges the United States offers through the African Growth and Opportunity Act, and the European Union under the Economic Partnership Agreements (EPAs). At the Lusaka AGOA Forum held in June 2011, U.S. Secretary of State, Hillary Clinton, announced that the Obama Administration supported extending AGOA and its duty free privileges well beyond 2015. The Africa Cotton & Textile Industries Federation’s (ACTIF) appeal for extension of the 3rd country fabric provision under AGOA is mainly to sustain the current 300,000 direct jobs and 3,000,000 indirect employments that the industry provides. However, this appeal by ACTIF also reflects the fact that there is not nearly enough fabric produced in SSA to meet the present demand. This also indicates the urgent need and tremendous opportunity for investment in spinning, weaving, dyeing & finishing in SSA. Buyers are willing to pay more for shorter
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
lead times to meet the fashion trends and market demands. This is because speed to market enhances competitiveness and assists in rotating the capital 5 to 6 times instead of 2 to 3 times in a year thus increasing the volume of business without increasing the capital outlay. Building these industries in Africa will dramatically increase Africa’s speed to market and related cost savings. It no longer makes economic sense to send African cotton to China and India to be woven or knitted into fabric, which is then shipped back to Africa to be cut and sewn into garments. The time and cost savings in producing the fabric in Africa are quite considerable. The attention is now turning to Africa. Numerous opportunities for investment exist across the entire value chain of cotton, textile and apparel. In a nutshell: • SSA has great market access opportunities for both regional and international markets: • Duty free access to the regional markets is available through several regional economic trading blocs, including: the Common Markets for East and Southern Africa (COMESA); the East African Community (EAC); Economic Community of West African States (ECOWAS), and the Southern African Development Community (SADC) • Duty free access to the U.S. market is mainly available through AGOA • Duty free access to the EU market is available through the interim Economic Partnership Agreements (EU-EPA) and other bilateral arrangements such as GSP. • SSA is cost competitive and also has natural strategic advantages for proximity to key markets making it a good place to develop business by reducing the gaps in the supply chain, mainly in fabrics, to increase speed to market; • There are investment opportunities in each niche of the cotton growing, textile production and apparel manufacturing sectors: • Cotton - there are opportunities for investors to open-up new cotton production areas; or for investors to partner with local cotton ginners in order to improve production yields and quality • Textiles - there are openings for
investors to get involved in spinning, weaving and knitting. This is in spite of the fact that many SSA states can use 3rd country fabrics to make the garments that they export to the U.S. and the EU • Apparel - there are opportunities to locate apparel manufacturing plants in selected SSA states. • Most governments in SSA are eager for foreign direct investment, particularly in the textile and garment sector to boost employment. Investment friendly policies, regulations and incentives have been established across the region including the set up of special economic zones to take care of the investors needs. The USAID funded Africa Regional Trade Hubs (i.e. The West African Trade Hub; the Southern African Trade Hub; and in East and Central Africa the Compete project) are willing and eager to assist U.S. firms interested in pursuing opportunities in this sector. ACTIF also will be pleased to provide additional information on request. Clearly, when it comes to trade and investment, the ‘time for Africa is now’. For more information, contact below: A.
B.
C.
D.
E.
Rajeev Arora Executive Director African Cotton & Textile Industries Federation (ACTIF) Email: arora.r@actifafrica.com / info@cottonafrica.com www.cottonafrica.com Robert Kirk Director South African Trade Hub Email: Robert.Kirk@aecom.com Finn Holm-Olsen Director East & Central Africa Trade Hub Email: fholm-olsen@competeafrica.org www.competeafrica.org Hanna Amichia Apparel Co-ordinator West Africa Trade Hub Email: hamichia@watradehub.com www.watradehub.com Barry Fisher USAID - COMPETE Email: bfisher@competeafrica.org www.competeafrica.org
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Technology and Innovation: Advancing a Vibrant Textile Industry in Africa By Mr. Bashir Ali Mohammad,Chairman International Textile Manufacturers Federation (ITMF)
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Technology and Innovation: Advancing a Vibrant Textile Industry in Africa
and/or railway network within a
might offer an excellent supply of
country or region, ports for the
raw materials, others benefit from
necessary imports and exports of
regional proximity to export markets,
raw materials, semi-finished goods
from low energy and water costs or
and end-products. Airports are a
from well educated people. In the
necessity to enable local, regional
end it is important that the overall
and international business men to
package must be attractive in terms
visit and establish business
of costs in order to attract
relations. Furthermore and like any
investments.
Important Success Factors for a
industry also the textile and apparel
Nevertheless, if a country or a region
Vibrant Textile Industry
industry need a stable power and
wants to export to international
There are many different factors that
water supply at acceptable costs.
markets like the EU, Japan, Australia
are important for the success of an
There are of course many other
or the US it is important to offer not
industry. Certainly there are some
factors that are relevant for the
only a competitive cost structure but
preconditions that are fundamental
success of an industry like a good
also the product quality that is
for any industry to develop
primary, secondary and university
acceptable in these markets. For
successfully. As for the textile
education system, the availability of
that reason it is important for any
industry one fundamental
raw materials, the size of the
producer of textiles and apparel to
precondition is certainly the
domestic market, the regional
invest in the right technology and
availability of workers and an
proximity of potential export
have skilled operators to run the
attractive labor cost level. The textile
markets, the existence of an industry
machinery at its optimum levels. It
and especially the apparel industry is
cluster or the access to know-how
is very difficult to export to Western
a light-industry that can be shifted
and technology.
markets if the technology of the
relatively easy from one location to
All the above listed factors are to a
machines is outdated in terms of
another. But relative low labor costs
certain degree relevant for any
speed, energy and water savings
are not guaranteeing a booming
country or region to compete on an
and of course in terms of quality.
industry. There are of course many
international level. If labor costs are
Technical institutes provide the
more factors that play a crucial role.
relatively low, labor intensive
industry with the required manpower
The two most important are a
industries like the apparel industry
trained in the latest techniques to
reliable legal framework and an
will have an interest to invest. But
extract the best possible results
acceptable transportation
they will only invest if the legal
from the available technology. There
infrastructure. A reliable legal
framework guarantees security and
is a close relation between
framework is key to attract both
reliability and if the transportation
investments in new machinery and
domestic and international investors.
infrastructure is in place, to move
exports. A look at ITMF’s
Investments will only occur if they
goods to and from the plants. Also
International Textile Machinery
are protected by the law and if
energy must be available and its
Shipments Statistics (ITMSS)
profits are free to leave the country.
costs not prohibitively high if an
provides valuable information where
As far as acceptable transportation
industry is to develop. It is obvious
new investments are taking place.
infrastructure is concerned this
that a country or a region does not
Looking at shipments of
comprises of course a good road
perform well in all categories. Some
short-staples spindles worldwide
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33
were booming between 2000 and
short-staple spindles fluctuated
from heavy investments in new
2010 an enormous surge of
between 30,000 and 150,000
water-jet looms. Like in short-staple
investments could be observed. Up
spindles per year. Shipments of new
spindles Asia was the main investor
to 2002 approximately 4 million new
weaving machines (shuttle-less
in new shuttle-less looms installing
short-staple spindles were shipped
looms) were more or less constant
97% of all new looms. China alone
every year. In the following years this
around the 60,000 units between
absorbed 84% of global shipments
number doubled to approximately 8
2000 and 2007. During the crisis
of shuttle-less looms. The African
million in 2003 and then to 10 million
investments dropped to around
market with traditional high share of
in 2004 and 2005. In 2006 and 2007
40,000 machines in 2008 and 2009.
rapier/projectile looms could not
approximately 12 million spindles
The year 2010 saw a jump of
participate in this boom. Africa’s
were shipped. During the global
shipments of new shuttle-less looms
market share during this period
economic and financial crisis in
to more than 107,000 that resulted
remained at approximately 1%.
These impressive investments in new machines have translated into an enormous export boom of textiles and apparel from many Asian countries but especially from China. In the past ten years especially Egypt was able to translate some of its comparative advantages like low labor costs, raw material supply (cotton), stable and affordable energy and water supply as well as proximity to an important export market (EU) into increasing exports.
2008 and 2009 shipments fell back
Shipped Shuttle-less Looms 2000-2010
to around 8 million spindles only to recover again in 2010 to 12 million. The main recipient of new
120'000
1200
spindles as a region was Asia
100'000
1000
80'000
800
60'000
600
40'000
400
20'000
200
shipped in 2010. As a country China alone absorbed 64% of global shipments. Africa’s share of global investment in short-staple spindles remained unchanged during this period at around 1%. In absolute terms shipments of new
34
Units
receiving 96% of all new spindles
0
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
World
Africa
(left axis) (right axis) Source: ITMF
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This is also reflected in the data of
machines and chemicals that can
to develop a vibrant textile and
ITMF’s shipment statistics where
make a difference in the production
apparel industry. In the past few
Egypt accounts for the vast majority
of textiles. Another important part of
years it could be observed that the
of Africa’s investments in new textile
innovation is of course taking place
textile and apparel industry in Africa
machinery. In 2010 Egypt installed
in the fashion industry. The
is developing an identity. ACTIF was
75’000 new short-staple spindles of
development of new and innovative
and is playing an important role in
an African total of 95’000. In the
designs is a huge opportunity for the
bringing together the various
segment of shuttle less looms Egypt
local and regional textile and apparel
stakeholders of the entire textile
absorbed 136 new machines of an
industry as they have the cultural
value chain together. Creating
African total of 308.
know-how and can benefit from the
awareness for cooperation and
The capability to innovate is also an
proximity to the domestic markets.
conducting joint events as well as
important factor for a vibrant textile
Local designers can develop and
interacting with international
and apparel industry in Africa.
tailor with its local and regional
partners will be crucial to translate
Innovation is a wide concept that
textile and apparel suppliers
potential into investments and jobs
can be applied on all stages in the
products to the many different tastes
along the entire textile value chain in
textile value chain from fiber to retail.
present.
Africa – from fiber to retail.
Next to the development of new
The textile and apparel industry in
types of fibers there are new
Africa certainly has a great potential
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Features
Cotton potential in Africa Dr. Alejandro Plastina Economist, International Cotton Advisory Council (ICAC)
‘If Africa is to double production by 2020, increased investments totaling $500 million need to be made’ Global Trends While population more than doubled from 3 billion people in 1960 to about 7 billion people in 2011, world textile demand of all fibers more than tripled over the same period, from 15 million tons to about 70 million tons. However, the fastest increase in textile consumption occurred during the last decade: about 25 million tons, or a 50% increase. It is expected that the increase in world population and the improvement in the standards of living in many emerging economies will continue to push world textile consumption to new record-high levels. However, not all fibers were equally favored by the increasing textile demand. While cotton accounted for about half of total textile fiber consumption until 1990, the relative decline in polyester prices, along with the multiplication of potential uses for polyester, viscose fibers, nylon and other fibers made the cotton share decline to about one-third of all textile fibers. Most cotton textiles are consumed in developing countries, and most of the increase in end-use cotton consumption over the last decade took place in developing countries. However, this increase was mainly due to increase in population, rather than due to increase in consumption per capita. On the other hand, the increase in end-use cotton consumption in industrialized countries was mainly due to increase in cotton consumption per capita. It is expected that without major efforts to promote cotton consumption at retail levels (especially in developing countries) its market share will continue to decline.
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Despite its declining market share, cotton consumption is expected to continue increasing in the years to come. World cotton production increased from 13.8 million tons in 1980/81 to 24.9 million tons in 2010/11, and is expected to reach 26.8 million tons in the current season, as a reaction to the record prices observed last season. Despite increase in production observed over the last 3 decades, the total area under production always fluctuated around 33 million hectares. Consequently, increase in production was driven by increase in yields. In particular, increase in yields from the 1990s to the 2000s were driven by the adoption of better production practices around the globe, but mainly by the adoption of biotechnology in major producing countries. Average cotton yields in China, India, the United States, Brazil and Australia (major cotton producers and early adopters of biotechnology) increased by 24% between the 1980s and the 1990s, and 36% between the 1990s and the 2000s. Average cotton yields in the rest of the world, increased only by 2% between the 1980s and the 1990s, and 4% between the 1990s and the 2000s. Challenges and Opportunities for Africa: African cotton production declined from a peak of 2 million tons in 2004/05, to just 1 million tons in the last three seasons. African cotton accounted for 7% of world cotton production at its peak, while it only accounts for 5% now. African cotton is perceived to be of higher quality than cotton from many competing origins and to have fewer neps because of hand picking. However, African cotton has a strongly negative perception for contamination and delays in delivery linked to poor roads, railroads and ports. Furthermore, most African cotton is
still hand classed, while competing exporters make full use of high volume instruments (HVI). However, the greatest challenge for African cotton is its declining international competitiveness due to declining yields. Over the last twenty years, the world cotton yield has climbed from 600 kilograms of lint per hectare to 750 kilograms per hectare, while the yield in Africa has declined from about 400 kilograms per hectare to just 315 kilograms per hectare now. The keys to increasing yields are strong regulatory systems to ensure credit recovery and prevent pirate buying, and increased research and extension. At current prices, African cotton production is valued at approximately US$3 billion. As a general guide, $1 in research and extension yields $6 in increased productivity. Thus, if Africa is to double production by 2020, increased investments totaling $500 million need to be made. This is an achievable increase in investment in the cotton sector when spread over a number of years and across several African countries. With world cotton yields rising slowly during the 2010s and competition for land with biofuels limiting cotton area, the ICAC Secretariat expects nominal cotton prices to be higher this decade than was the case in previous decades. According to the expert opinion of Mr. Gerald Estur, Africa has the potential to raise production to 3 million tons by 2020. Thus, there will be opportunities for income growth in the African cotton sector if yields and logistics can be improved. Additionally, Africa could capture more value from the cotton business by developing indigenous merchants providing credit, arranging shipments, and selling to textile mills rather than to competing merchants.
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Regulars
Readers Comments “Congratulations to both Jaswinder and Rajeev on launching the Cotton Africa Magazine, an important part of the developmental objectives we have set for the CTA value chain on behalf of the membership of ACTIF. It is crucial that the momentum be maintained and initiative taken to pursue the commitment for future engagement. It is also important that we focus on mutual gain outcomes in our trade relationships. In this regard, retail practices and the importation of cheap clothing (both new and second hand) need to be addressed in addition to the cotton agricultural issues.” Johann Baard Executive Director Apparel Manufacturers of South Africa (AMSA) Cape Town “I bookmarked the article titled ‘Friends of Africa: Placing Africa on the Map as a Global Sourcing Destination’ on Newsvine. It was an excellent read full of valuable information and I will keep tracking your posts” Ronda Newvine, USA “I really like your writing style, good info on the subject matter exploring business linkages between the African Cotton sector and the Vietnam textile industry. Keep up the excellent work.” Lavonda Klement Online reader I enjoyed the article titled “Causes of cotton prices volatility in 2010/11: The need for better statistics and predictable Government policies”. I found it to contain very valuable information. The web site style is also ideal Nathalia, USA
Calendar of Events Origin Africa Trade Expo 2012 25th – 27th April, 2012, Addis Ababa, Ethiopia www.originafrica.org Complete Cotton: By ICA International Cotton Association 23rd April – 2nd May, 2012, Liverpool, United Kingdom A 10-day training programme that focuses on key areas of the raw cotton trade – from growing cotton to spinning and everything else in between. It provides a unique opportunity to learn about the cotton industry from some of the world’s largest professionals. Contact: info@ica-ltd.org www.ica-ltd.org Cotton International 2012 Global Summit 25th – 27th April, 2012, Landmark Hotel, Bangkok, Thailand A Global Cotton Forum: Turn Market Volatility to Competitive Advantage – Key note speaker President of ITMF Bashir Ali Mohammad American Cotton Shippers Association (ACSA) International Cotton Institute 30th May – 17th July, 2012, University of Memphis, USA The ACSA International Cotton Institute is an 8-week residential programme designed to provide basic education in all aspects of the cotton industry and the international business environment. www.cottonmemphis.edu
ICA Bremen: “Cotton Classing & Testing Training” 3rd – 11th July, 2012, Bremen, Germany The training covers a series of modules delivered by industry experts; from classifying various growths of cotton to practical HVI training on the latest equipment. www.ica-ltd.org Africa Growth & Opportunity ACT - AGOA Conference 2012 U.S.-Sub-Saharan Africa Trade and Economic Cooperation 2012 AGOA Forum, June 18 – June 19, 2012 Washington, DC 71st Plenary Meeting of the ICAC Interlaken, Switzerland from October 8-11, 2012 ICEA: Hong Kong 2012: “Growing Together” 1st - 2nd November, 2012, Hong Kong Convention & Exhibition Centre For delegates to network and do business with a diverse market - one that represents all links in the supply chain. www.ica-hk.org. For registration. ITMF ITMF Annual Conference 4th – 6th November, 2012, Hanoi, Vietnam www.itmf.org
ITMA ASIA + CITME 2012 12th – 16th June, 2012, Shanghai, China Contact: Rochelle Huang foreignaffairs@ctei.gov.c
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
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Pictorial
ACTIF, ETGAMA, and TIDI meeting with stakeholders to promote Origin Africa Trade Expo in Addis Ababa, Ethiopia
ACTIF meeting with Wazir advisors, to promote Origin Africa Expo in Ethiopia 2012.
Meeting with Pearl Academy, Group Director, A.K.G Nair, and Professors to disscuss participation in Origin Africa Trade Expo.
Group Photo of the African Cotton Association (ACA) 10th Annual Congress Victoria Falls Zimbabwe 15th-17th March 2012
ACTIF with Deputy Min. of Industry & Commerce and Min. of Agriculture mechanisation & irrigation development, Zimbabwe, together with chair of A.C.A.
Final report presentation meeting for the International CTA conference held at Kenyatta University, Feb 2012
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FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Pictorial
ACTIF and Wazir meeting with EPZA-Kenya on proposed regional center of excellence, Feb 2012
Some of the participants during the CFC/ICAC/33 Project Final seminar, on the Regional testing facility, held in Arusha January 2012
Signing of MOU between ACTIF, ETGAMA and TIDI. towards holding Origin Africa trade Expo in Addis, Ethiopia, 2012
ACTIF Meeting with Hon. Min. of State for Trade and Industry, Ethiopia, Ato. Haile Taddese, along with USAID-ECAH, and TIDI, on Origin Africa 2012
Opening session of the International CTA conference for East Africa, Mombasa, 2011
A social function during International Cotton Textile & Apparel conference for East Africa, in Mombasa, 2011
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
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Trade Policy
Congress Recesses without Renewing the AGOA Third Country Fabric Provision, as Apparel Imports Continue To Improve By Paul Ryberg Ryberg and Smith, L.L.C. Washington, D.C.
Congress recessed shortly before Christmas 2011 without taking action on renewal of the African Growth and Opportunity Act (AGOA) “third-country fabric” provision, which accounts for 90%+ of apparel imports from Africa under AGOA and which is scheduled to expire September 30, 2012. The Africa Cotton Textile Industries Federation (ACTIF) and other stakeholders have been pressing Congress for the past two years to renew the third-country fabric provision before the end of 2011 because apparel orders are typically placed nine months in advance of the delivery date. Indeed, ACTIF members have advised that U.S. buyers are already beginning to shift orders for delivery after October 1, 2012, away from African producers and to Asian manufacturers out of concern that duty-free status of apparel from Africa may expire next year.
cost-competitive, but if it is allowed to expire, the African apparel sector will be devastated. Ironically, the effort to renew the third-country fabric provision gained new momentum just prior to Congress’ recess for the rest of the year. On December 13, 2011, Senate Finance Committee Chairman Max Baucus (D-MT) introduced the Senate version of the bill to renew the third-country fabric provision and to add South Sudan as a potential AGOA beneficiary. The new Senate bill, S. 2007, is an identical companion to H.R. 2493,
which was introduced in the House several months earlier by Rep. Jim McDermott (D-WA). That same day, House Ways and Means Trade Subcommittee Chairman Kevin Brady (R-TX) confirmed in a speech his support for renewing the third-country fabric provision. On the next day, December 14, 2011, U.S. Trade Representative Ron Kirk unveiled a new U.S. initiative to extend trade benefits to least developed countries (LDCs) in the context of the WTO Doha Round of multilateral trade liberalization negotiations. A key element of the new initiative is renewal of the AGOA third-country fabric provision. Of course, the Obama Administration has been firmly committed to renewing the third-country fabric provision, as was best evidenced by a statement by
The cost of producing apparel in Africa is higher than in the Asian super producers like China, Bangladesh, Vietnam and Cambodia. The AGOA third-country fabric provision makes Africa 40
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Trade Policy
Congress Recesses without Renewing the AGOA Third Country Fabric Provision, as Apparel Imports Continue To Improve (cont.) President Obama that was read to the AGOA Forum in Lusaka, Zambia in June 2011. Secretary of State Clinton and U.S. Trade Representative Kirk, as well as various other senior Administration officials, made similar statements at the AGOA Forum. As the end of the legislative session approached in late December 2011, Congress’ attention was diverted by partisan controversy surrounding measures to extend certain tax cuts and the need to renew the federal budget to avert a government shutdown. Nonetheless, there are reasons for optimism that Congress may act promptly to renew the AGOA third-country fabric provision after it reconvenes in January 2012. For example, during the January 17, 2012 meeting of the U.S.-Mauritius Trade and Investment Framework Agreement (TIFA) Council, Deputy U.S. Trade Representative Demitrius Marantis confirmed that prompt action to renew the AGOA third-country fabric provision remains a high priority for the Obama Administration.
period for which official apparel import statistics are available. During January-October 2011, apparel imports from Africa under AGOA were up 13% over the same period in 2010. This upward trend in U.S. apparel imports from Africa began in 2010 and is the first sign of recovery since the Multi-Fiber Arrangement (MFA) expired in 2005, which led to a major surge in apparel imports from low-cost Asian producers and a corresponding devastating contraction in the African apparel industry.
16%, Malawi up 10%, Mauritius up 19%, and Tanzania up 139%.
Ten of the AGOA visa holders exported significant volumes of apparel to the United States during January-October 2011: Botswana, Ethiopia, Kenya, Lesotho, Madagascar, Malawi, Mauritius, South Africa, Swaziland, and Tanzania. Together, these ten countries accounted for over 99% of total U.S. apparel imports from Africa during January-October 2011. A small and rapidly declining volume of apparel continues to be imported from Madagascar on a duty-paid
The modest recovery in AGOA apparel exports has been driven by various factors, including rising costs of production in China and high cotton prices, which have in turn made the AGOA duty-free preference more attractive to U.S. buyers. The rug would be pulled out from under the recovery, however, if Congress does not act quickly to renew the AGOA third-country fabric provision.
Country
Botswana Ethiopia Kenya Lesotho Madagascar Malawi Mauritius South Africa Swaziland Tanzania Subtotal of As the House of Representatives Countries reconvened on January 17, 2012, 10 Visa Rest of increasing attention was being Africa Total focused on the possibility of moving
renewal of the third-country fabric provision as a free-standing measure by unanimous consent under so-called “suspension of the rules” procedures. This unusual process is being considered out of concern that other potential trade legislation that could serve as a vehicle for the AGOA amendment might not move forward quickly enough. The budding recovery of the African apparel sector continued through October 2011, the most recent FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
The data on apparel imports from Lesotho and South Africa was mixed, being up slightly by one measure and down slightly by the other: down -6.42% and -7.06% by volume, but up 10.18% and 2.91% by value, respectively. Other than Madagascar, Swaziland was the only AGOA country that experienced losses measured by both volume and value.
January-October 2010
January-October 2011
msme
msme
$ million
$ million
% Growth msme
$ million
2.197 2.598 55.870 61.883 15.995 3.389 16.324 0.713 23.789 2.409
$10.138 $5.695 $168.513 $238.834 $50.199 $8.460 $99.743 $5.227 $82.525 $1.344
3.217 4.962 64.612 57.912 9.602 3.735 19.432 0.663 18.079 5.746
$15.131 $8.482 $221.182 $263.153 $32.924 $10.702 $128.746 $5.379 $69.291 $4.189
46.39% 90.96% 15.65% -6.42% -39.97% 10.22% 19.04% -7.06% -24.00% 138.52%
49.25% 48.94% 31.26% 10.18% -34.41% 26.51% 29.08% 2.91% -16.04% 211.59%
185.167
$670.678
187.960
$759.179
1.51%
13.20%
1.069 186.236
$2.530 $673.208
1.659 189.619
$3.416 $762.595
55.19% 1.82%
35.02% 13.28%
basis following the loss of its AGOA eligibility effective January 1, 2010. Apparel imports from the ten visa-holding countries increased by 1.51% during January-October 2011, as measured by volume in square meter equivalents (sme) and by 13.20% by value. Six AGOA countries experienced growth in their apparel exports during January-October 2011: Botswana up 46%, Ethiopia up 91%, Kenya up
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Features
Economic Partnership Agreements A new dawn for Africa’s CTA sector By Ben Nupnau, European Commission.
Most African countries would stand a lot to gain from fuller participation in world trade. Despite of long lasting privileged access to the EU market, their export sectors and economic development have not prospered in line with expectations. Three factors stand out. First, most African countries still export just a few raw materials, such as oil, minerals, coffee or cotton. These commodities and agricultural products are subject to frequent and sometimes severe price fluctuations. Second, the export sector remains isolated from the rest of the economy since hardly any processing takes place and little value is added. Third, the African share of the EU market has consistently fallen. On the other hand, other poor developing countries have increased their sales to the EU, including in the manufacturing sector to the EU over the same period, although they didn't have such generous access to the EU market. Producing for world markets helps local firms to overcome the limited demand on an often small and poor home market. Exporting to world markets allows companies to specialise and to fully concentrate on producing what they are best at. And finally, by trading with other countries, exporters of poor countries learn; they import ideas, know-how and technology which are all necessary to catch up with more developed economies. The EU strategy to promote development of poor countries emphasises their integration into the world trading system as an important cornerstone to achieve sustainable and balanced growth. This is a prerequisite for developing countries to lift people out of poverty, as well as for achieving their human and social development objectives. With the Cotonou Agreement of 2000, African, Caribbean and Pacific countries and the EU decided to establish an ambitious trade and development relationship, the Economic Partnership Agreements (EPAs), which would not be limited to tariffs and trade in goods, but address trade-related rules, services, while strengthening regional integration and creating more efficient regional markets. The EPAs also include a link with development cooperation to strengthen the institutions required for the implementation of EPAs and the productive capacities benefit from them. EPAs are a powerful tool to make trade work for development. They are drivers for change and much needed reform, and are key to ACP economic development. Ultimately, EPAs aim to ensure a stable, predictable and transparent business environment, thereby helping ACP countries attract foreign investments and integrating at regional level as well as with the global economy. They will also improve the access of ACP firms to competitive goods and services, which in turn will increase their own competitiveness. EPAs are specifically designed to address ACP development needs, in terms of degree and pace of market opening, rules, safeguards and the link with capacity-building. This makes EPAs very different from any other trade agreements. EPAs fully respect the rights of ACP governments to regulate their own economies and seek to back up ACP policies protecting the environment or social rights of workers.
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The cotton, textile and clothing sectors are of great importance to many African economies. The EU market for cotton is completely open and cotton from African countries can enter the EU duty and quota free. Under the EPAs, African exporters in the textiles and apparel sectors benefit from preferential access. But preferences are only as valuable as there is capacity to comply with the conditions that are attached to them. Beyond free market access, EPAs come with much relaxed rules of origin, making it easier for African countries to export products with inputs from other countries (third-country inputs), especially in key export sectors – agriculture, fisheries and textiles and clothing. The new rules of origin for textile and apparel only require a single transformation (instead of the two-stage transformation of before) for these goods to be eligible for the preferential access to the EU market. This concretely results in benefits for African producers. Textile producers in Mauritius, for example, now have access to the rich European market with nearly 500 million consumers – with the added benefit of less strict Rules of Origin – under the Eastern and Southern Africa (ESA)-EU interim EPA. EPA Rules of Origin allow cumulation between all EPA regions, a powerful incentive for the main cotton producers in Central and Western Africa to accelerate their negotiations and conclude regional EPAs in due course. The EU is fully aware of the key role played by cotton for the development of countries that are among the poorest in the world, and on its own initiative, committed to a profound reform of its cotton regime. Thus in the multilateral arena of the WTO, the EU has made concrete proposals on the adoption of cotton-specific rules in the past. First, the elimination of the most trade-distorting forms of domestic support; second, the elimination of export support in the cotton sector; and third, full market opening for cotton for the least developed countries. The EU was amongst the first to translate this commitment into solid action and, on its own initiative, committed to a profound reform of its cotton regime. In addition, under the "EU-Africa Partnership on Cotton", launched in 2004, substantial financial assistance was made available. Since 2004, over € 320 million have been allocated to cotton programmes and projects. This partnership especially focuses on cooperation with the cotton producing countries such as Benin, Burkina Faso, Mali and Chad. These figures do not include the Aid for Trade support that indirectly helps the cotton sector, such as general agricultural projects, infrastructure (main roads, bridges), trade facilitation or private sector development. These areas have received increased funding by the EU and its Member States since the adoption of the EU Aid for Trade strategy in 2007. The EU and its Member States are the world's biggest Aid for Trade donor, and have provided € 3.6 billion in Aid for Trade to ACP countries in 2009.
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Country Focus: Nigeria
Nigeria’s Cotton Industry: Efforts to revive a sleeping giant. By Joseph Nyagari, Trade Policy & ICT Manager African Cotton & Textiles Federation ACTIF Nigeria is the most populous country in Africa with an estimated population of 170 million people. Located in the western part of Africa, Nigeria is classified as a mixed economy emerging market, with an abundant supply of natural resources, well-developed financial, legal, communications, transport sectors and stock exchange (the Nigerian Stock Exchange, is the second largest in Africa). Nigeria is the United States' largest trading partner in sub-Saharan Africa and supplies a fifth of its oil (11% of oil imports). Nigeria is also the 12th largest producer of petroleum in the world and the 8th largest exporter, and has the 10th largest proven reserves. According to International Cotton Advisory Committee (ICAC), Cotton as a cash crop is of considerable social and economic importance to Nigeria, dating back to 1903. In the 1960’s and 1970’s it was proud to boast of a thriving cotton industry. Cotton production is mainly in three zones: the Northern zone (60%), Eastern zone (30%), and the Southern zone (10%) respectively. In the 1960’s and 1970’s the textile industry of Nigeria was classed second only to agriculture in economic importance. When more technology driven mills were established mainly through Foreign Direct Investment (FDI), it lead to considerable contribution to the GDP and foreign exchange earnings. The giant cotton industry of Nigeria has since slowly been dilapidated and stripped of its glory from the mid 1980’s to the present years. By 1985, the aggregated employment in the industry declined to 250,000 people from 700,000 between 1960’s-1970’s and deteriorated further to 83,000 in the year 2000. FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation
Similarly, the number of textile factories declined from 185 in 1985 to 25 in 2008 leading to a near extinction of the industry. Following a request by the Federal Ministry of Trade & Investment, the United Nations Industrial Development Organization (UNIDO) submitted a report on the prevailing critical situation of the Nigerian Textile Industry. In its submission UNIDO affirmed the importance of the industry, status of the existing textile mills, constraints of the industry and presented its recommendations on concrete steps to be taken to resuscitate the textile industry both long term and short term solutions. In response, several key institutions including the Bank of Industry (BOI), National Cotton Association of Nigeria (NACTON) and the government of Nigeria are opening their doors to all stakeholders across the cotton value chain, from production to processing and marketing with the sole aim of bolstering the quality and quantity of cotton production in Nigeria. There were several reasons that led to the downfall of the industry, primarily the neglect of the cotton industry over the years with the advent of oil wealth, operational and marketing constraints within the textile industry and inconsistency of Government policies on incentives. On a secondary scale the industry has suffered from an infiltration of smuggled garment and second hand clothing materials, which flooded Nigerian markets. The Industry is also not producing at full capacity because of its protracted problems in the power generating sector, adulteration of seed cotton, low export grant to exporters, in appropriate packaging of seed cotton
with polypropylene bags, high cost of diesel and unstable power supply, low demand for locally processed fabrics and importation of cheap foreign fabrics, high credit default and outstanding balances. Despite the domino’s effect created by the challenges across the Nigerian cotton value chain challenges, there is a ray of hope to revive the textile industry, through program initiatives, policy regulatory and funding proposals, actively embarked on by the Nigerian Government, the National Cotton Association of Nigeria, the Bank of Industry, and other key stakeholders within the textile industry. Bank of Industry (BOI) introduced a “bail out facility” - Cooperative Leading facility (amongst other products and services) made available to all across the cotton value chain by enjoining members into cooperative unions, such as Ginners, textiles and garments so as to be able to partake in the “bail out facility.” Bank of Industry is Nigeria’s largest project and industrial financing institution, reconstructed in 2001 out of Nigerian Industrial Development Bank (NIDB). The Bank’s mission is to “transform Nigeria’s industrial sector and integrate it into the global economy by providing financial and business support and services to existing and new industries to attain modern capabilities to produce goods that are competitive in both domestic and external markets.” The Bank aims at activities such as: stimulation of local entrepreneurship and revamping of indigenous economic activities where comparative advantages can be harnessed and converted to competitive ones, employment generation and wealth creation, encouraging cluster
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Country Focus: Nigeria
formation which would engender enterprise competitiveness and facilitate sharing of common services thus reducing cost of doing business for entrepreneurs’, encouraging symbiotic linkages between large enterprises and SME’s and taking care of specialized entrepreneurs’ especially women and youth.BOI core activities include: Project identification and selection, resource mobilization, financing (long term, short term and equity), industrial policy formulation, business development support and research. Another key player in the revival of the cotton industry in Nigeria, NACOTAN has called on the Federal Government and state government to put in place enabling environmental measures that would fully address the prevailing issues.
a Cotton Development Corporation to help stabilize cotton prices and ensure that the issue of gazette cotton markets are resuscitated, Federal Government’s sponsored Cotton, Textiles, Garment financing packages that are easily accessible, enhancing the relationship between NACOTAN and the Government to ensure the successful implementation of Government transition programme, introduction of grey belts as the only means for packaging seed cotton and lint to reduce cotton contamination which degrades the value of cotton and seed production and availability to maintain varietal purity and high yield. Below, a summary of some key stakeholders in the Nigerian cotton Industry playing a role in the development of the sector:
Mr. Mal. Mahmoud: Profile Company Secretary and Head of Marketing, CAP. In Nigeria and commenced operations in 1903 under the control of British Colonial Government. It was the first Nigerian enterprise to export industrially semi-finished products (lint and seed) to Britain. The Company gradually spread its operations to the northern parts of the country, the centre of almost all the seed cotton production in Nigeria. “With emerging crisis brought about by the prevailing restrictive local market as the nation’s textile mills close shops amidst non export support, Nigerian ginneries are now coming together under the umbrella of Ginners Association of Nigeria”
SANTHOSH NAIR: Profile Branch Controller,OLAM. Mr. Nair is responsible for handling the upcountry procurement and operations for cotton business at Olam Nigeria Ltd. Who are OLAM? Olam Nigeria Ltd was established in the year 1989 and since has demonstrated its ability to grow organically by exploiting adjacent opportunities. It is currently the largest non-oil exporter operating in Nigeria
Mr. Hamma Ali Kwajaffa, the Chairman of National Cotton Association of Nigeria (NACOTAN)
This has yielded some fruit giving rise to the “cotton transformation programme” which is geared to make cotton production self sufficient within the next four years. To deal with the challenge of poor quality cotton seed, NACOTAN in partnership with Nigeria National Seed Council (NASC) will put in place measures to ensure quality control of cotton seeds, reaching the famers. NACOTAN has been called about to take up the vacuum created with the exit of Nigerian Cotton Board. Despite the bleak nature of the textile industry, there is hope of waking up the sleeping giant and reinstate the industry to its former glory and beyond. By proactively implanting proposed solutions such as establishing
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“At Olam we feel that Nigeria’s cotton industry requires a lot of balanced policy stimulus and timely interventions by the government. The Trade and Investment Ministry has also shown occasionally promising communications in terms of retaining/increasing the Export Expansion Grant to keep the Nigerian cotton competitive in the global trade landscape.”
OLAMS NEED BASED INTERVENTION PHILOSOPHY IN COTTON Tie Up with IAR for providing hybrid cotton varieties to farmers at most affordable cost
FARMING SUPPORT DEMAND GENERATION FOUR NIGERIAN COTTON
Seeds
Exploring partnering possibility with government for import of Hybrid seed from other countries for distribution
Fertilizers and Chemicals
Credit based input supply based on field officers recommendations
Marketing
Investment on generating brand value for Nigerian Cotton as value for money cotton in the low value segment
Moving Upstream
Undertake large scale own demonstration farms for Cotton, partnering with Government
LONG TERM COTTON CROP Transfer of SUSTAINABILITY technology
Use these demo farms as a model to teach the local community on ideal farming practices in Cotton
FIBRE TO FASHION JAN - MAR 2012 African Cotton & Textile Industries Federation