BY MENGESHA AMARE
If someone is asked about what entails the process of taking raw materials like cotton or wool and spinning it into yarn and ultimately create a fabric, appealing clothing and catchy attire, they can no doubt respond to the question saying a textile and clothing industry.
Yes, all of the processes involved in the converting of the raw material into a finished product, developing, producing, manufacturing, and distributing textiles are included in the industry. In history, the garment industry helps many developing countries start the industrialization process.
Taking this concept into account, Menbere Muleta was invited to say something about apparel or textile and clothing industry as she graduated in Industrial Engineering centering garment and outfit.
She said, “Textile is a supple material that is formed using numerous processes, including knitting, weaving, crocheting or felting. These materials are extensively used to manufacture a wide range of finished goods, such as upholstery, kitchen, transportation, bedding, construction, medical, protective equipment, apparel, handbags, and clothing accessories.”
Noting that industrialization plays a vital role in economic development of a given country, Ethiopian garment industries have created new opportunities for emerging economy to participate in global markets and achieve economies of scale by specializing in specific activities involved in designing, producing and bringing to market complex goods. The textiles and clothing sector has emerged as a robust driver of the trade-led industrialization in emerging and developing economies such as Ethiopia, as to Menbere.
As to her, the textiles and clothing industry is one of the oldest, largest and most global industries in the world. It is the typical ‘starter’ industry for countries engaged in export-orientated industrialization. The industry plays a major role in the development and industrialization process of a given nation and its integration into the world economy, she added.
“Today, most of the traditional methods used for costing advocate the determination of production cost of garments based on actual, standard or budgeted expenditure thereby determining the sale price. However, the sale price is decided by the market and the industry has to take a decision with regard to their production cost in order to obtain sufficient profit margin. The solution for optimum profit margin will be different from case to case.”
In today’s competitive market, quick and correct decision assumes utmost importance in any industry and a garment industry is no exception for this. The market trends are changing very rapidly and the order quantities are becoming smaller and smaller. The garment units of present day will have to be very versatile capable of producing garments of any style and type as per demand of the market if they want to survive.
Some garment units equipped with computerized ultra-modern machineries can produce a high quality of garment in a bulk quantity, but their interest burden will be very high, Menbere said. She said, “As the techno economics of the garment unit mostly depends upon the style of the garment, and mostly as the garment industry is the fast changing industry, there are no specific guidelines about the costing of the garments.”
The textile and clothing industries form a major part of manufacturing production, employment and trade in many developing countries. Several countries offer incentives to attract investment. For textiles and clothing producers these might include zero corporation and income taxes and zero import duties. Investment incentives are often aimed at overcoming other negative investment climate factors.
Hence, Ethiopia has to entertain such a lucrative means to further augment the industry. Countries with adequate public policies and private sectors have used the opportunities provided by temporary trade preferences for the industry to move up the value added chain.
The potential of the textile and clothing to contribute to long run growth and development will therefore depend not just on the attributes of the investor, but also on the quality and effectiveness of government policies and institutions in developing countries like Ethiopia. The garment industry can be made the largest employer in Ethiopia after agriculture as the country could produce various raw materials that could definitely be inputs of the industry, for instance cotton is highly produced though not in a modern way in Ethiopia. It is also the main source of manufacturing employment and exports.
Semere Dagnew is an exporter of myriads of textile produces. He said, “Yes, textiles and clothing industries are important in economic and social terms, in the short-run by providing incomes, jobs, especially for women, and foreign currency receipts in the long run by providing countries the opportunity for sustained economic development with appropriate policies and institutions to enhance the dynamic effects of textiles and clothing.” The industry is very important in terms of trade, GDP and employment and has contributed significantly to development and change. Thus, the potential of the textile and clothing industries to contribute to economic growth is quite great, he said.
As to him, textile and clothing industries are a major contributor to revenue/income, but without appropriate policies and institutions, developing counties often do not have the skills to enter into higher value added activities such as design and marketing. This has to be taken into serious consideration in Ethiopia to help the nation reap it deserves from the industry. Besides, workers need to have trainings and take part in experience sharing forums to further promote the domestic industries in which women can be better offered employment opportunities even in rural localities of the country.
The textiles and clothing industry has been the important export sector and an important contributor to economic growth and employment generation. The strategic investment in the textile and apparel market with effective collaboration between countries for tangible economic benefits needs to be well consolidated, he added.
Since the current market situation in Ethiopia has faced headwinds manifested in key macroeconomic trends such as inflation, soaring energy prices, continued effects of the coronavirus and the prolonged war in Ukraine, possible mechanisms in the country needs to be devised to address the problems.
As to him, cotton has experienced the most volatility; however, prices of feedstock and man-made fibers were not immune to the trend. Ethiopia has an enormous export potential in the textile and garment industry which is growing annually, and the country has 3 million hectares of land suitable for cotton production. Ethiopian companies in the textile and garment sector have exported products to the US and European markets. The government as to him had better diversify exports from agricultural product to strategic sectors like textile and garment manufacturing as the sector itself is a lucrative one.
Ethiopia’s long history in textiles began in 1939 when the first garment factory was established. The growth in the textile industry is directly linked to the government’s move to set up an industrial development strategy and expand industrial parks. This step of the government to prioritize designing incentives and policies to attract investment in view of worldwide competition has played a big role in buttressing economic development.
He said, “Ethiopia, as a country and investors have still faced challenges regarding the sector the country although the country is a recommended market for investment in textiles. For instance, one of the challenges is the efficiency in factories which is slow mainly due to underdeveloped processes and lack of education amongst manpower.”
As to him, another challenge is the cycle time and delivery. Cycle time can extend up to irrelevant days due to the lack of available raw materials. The lack of marketing is also a concern for the textile industry in Ethiopia. Hence, Ethiopian companies need to adopt a more aggressive marketing strategy to eradicate this challenge. He wrapped up his ideas saying the textile industry in Ethiopia has much room for development, and this can be achieved through working together.
The Ethiopian Herald March 10/2023
