Agenda | Feb 09,2019
Ethiopia is importing 20,000tn of cotton, representing close to 40pc of the textile industry's annual demand, after floods damaged plantations in the main growing regional state and caused shortages in supply. Security concerns in two other cotton-growing regional states have contributed to the shortage as well.
The Ethiopian Industrial Inputs Development Enterprise (EiIDE) dispatched invitations last week to a closed bid by a selected supplier list of 12 companies. The bid, with each slot required to supply 2,500tn, is scheduled to open on April 7, 2021.
“The cotton is expected to be received in July," said Solomon Girsha, deputy CEO for the Enterprise's procurement sector.
Ethiopia's textile industry requires an estimated 55,000tn of cotton annually; but only 33,000tn reached factories this year. The supply gap has occurred largely due to cotton plantations in Afar Regional State, which accounts for 80pc of domestic supply, that were damaged by flooding in September 2020. Security issues in Gambella and Benishangul-Gumuz regional states, other lowland regions where cotton grows, played a part in the shortage. The shortfall in pesticides brought on by forex shortages has also exacerbated the situation.
The Ethiopian Textile Industry Development Institute (ETIDI) has also allowed six textile factories and the EiIDE to import cotton. The factories have been given the green light to import an aggregate of 10,000tn, and the other half through the Enterprise. Kanoria Africa Textiles Plc, Adama Spinning, Kombolcha, ALCA, MNS Manufacturing Plc, and Bahir Dar Textile Factory are the recipients of foreign currency allocations for imports.
According to people familiar with the industry, the textile industry has survived the economic impact of the COVID-19 pandemic. According to Bantihun Gessesse, director of communications at the Institute, it is tested by a shortage of cotton.
There are more than 3,000 micro and over 200 medium and large textile industries in Ethiopia. The largest of these is Bahir Dar Textile Factory, which requires more than 30,000tn of cotton a year. The factory used to source cotton from commercial farms in Afar and Benishangul-Gumuz regional states; it now receives supplies from farms in the north and central Gonder area of Amhara Regional State.
Not getting enough from these sources, the factory is operating at half of its capacity, Mengistu Aregaw, CEO of the Factory, told Fortune.
Unable to import since the outbreak of COVID-19 last year, the factory has dropped its production.
"Even though we haven't resorted to laying our employees off and closing the factory, if the situation continues like this, it might come to that," said Mengistu of his fears on the threat of closure.
Another textile factory has temporarily ceased production due to supply constraints and going through difficult times. Adama Spinning Factory, which requires 3,500tn of cotton a year, stopped operating in October 2020 but kept employees on its payroll. Two months later, it started buying up cotton that survived the flooding in Afar.
"If access to foreign currency is not allowed now, we might end up closing the factory again," Yimer Yimam, CEO of Adama Spinning, warned.
Officials at the Ethiopian Industry Inputs Development Enterprise, which is allowed to import 10,000tn of cotton, were keen to complete an international procurement bid issued on March 19, 2021, early.
Nonetheless, only one bidder showed up, although 15 bought the bid document.
Senior staffers at the Enterprise blame a lengthy bid process that lasts two months for bidders' reluctance to participate as international cotton prices fluctuate in the meantime.
Natural and man-made disasters last year only aggravated the shortages in cotton production, which have long been in the making, according to experts studying the textile industry. For a country whre only three percent of its land suitable for growing cotton, supplies that are not increasing in tandem with the expansion of textile industries are most responsible, according to Abera Kechi (PhD), associate professor and scientific director at Bahir Dar University Institute of Textile & Fashion Technology.
The Institute is working on projects to increase the capacity of cotton producers, incentivising commercial farm developers to join the industry as long-term solutions to the supply crunch, Bantihun told Fortune.
PUBLISHED ON [ VOL , NO ]
Agenda | Feb 09,2019
Agenda | Jul 24,2021
Radar | May 07,2022
Fortune News | Dec 28,2019
Radar | Aug 21,2023
Fortune News | May 08,2021
Radar | Dec 29,2018
Fortune News | Sep 04,2021
Agenda | Aug 27,2022
Fortune News | Jan 12,2019
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Dec 2 , 2023
The symphony of traffic noise in Addis Abeba is not just a sign of life, but a siren...
Nov 25 , 2023
Ethiopia's quest to develop a functioning capital market is a demanding yet not unach...
Nov 18 , 2023
Prime Minister Abiy Ahmed (PhD) has made a fervent call for landlocked Ethiopia to ga...
Nov 11 , 2023
In November last year, a ray of hope pierced the gloomy skies of Ethiopia as the Pret...
I have a love-hate relationship with my phone. It is my go to source for information. I enjoy interacting with text messages and browsing t...
Over the weekend, I attended a wedding where my husband was one of the protocols. Despite the typical joy...
Or see contact page